President-elect Donald Trump made no secret during his campaign that he didn’t consider the US should take an aggressive stance on climate change. From leading chants of “drill, baby, drill” to regularly criticizing all the pieces from wind turbines to electric vehicles, he seems able to solid a shadow over the climate tech sector for the subsequent 4 years.

Or will he do it?

As with a lot of Trump’s positions, it’s difficult to find out his exact position on climate change and the technologies that mitigate or adapt to it. Moreover, a number of the policies he proposes could have broad advantages for climate technology, even in the event that they support oil and gas.

“If you deregulate and drill, baby, drill, you can get more natural gas and oil. You can also get heat such as geothermal energy. Geological hydrogen can potentially be obtained,” Leonardo Banchik, chief investment officer at Voyager Ventures, told TechCrunch.

Banchik and other climate tech investors are cautiously optimistic that policy changes being considered by the second Trump administration won’t be broadly harmful to climate tech.

“Much of the climate technology wave started during the Trump administration,” Banchik said. “Regardless of which administration is in power, these technologies will continue to fall down the cost curve.”

Sophie Bakalar, partner at Collab Fund, agreed and added that she would not be surprised if this second Trump administration also inspired more entrepreneurs to start out businesses on this sector. “The climate does not operate on a four-year cycle, these are very long-term trends and problems,” she added.

Much of investor optimism stems from lessons learned from the cleantech cycle that collapsed greater than a decade ago. Many firms then expanded too quickly, constructing huge factories and provide chains before demand fully materialized. They have also change into overly depending on government subsidies, whether in the shape of grants, loan guarantees, or otherwise.

“We don’t spend money on firms that depend on federal grants or really daring corporate ESG mandates. We only spend money on firms that provide their customers with tangible value, whatever the climate,” Bakalar said.

Joshua Posamentier, managing partner at Congruent Ventures, agrees. “We’re not investing in anything that we think will require subsidies forever to get any unit economics.”

Clear skies not all over the place

Still, some businesses will struggle. Several investors told TechCrunch that anything that relies on tax breaks for consumers might be vulnerable. Some expect wind energy and related industries to feel the impact, given Trump’s aversion to renewable energy sources. One investor predicted that the Environmental Protection Agency could also expect budget cuts.

The lack of federal support could push some firms that were near the brink over the sting. “It will be a distillation, a thinning of the herd,” Posamentier said. “I think they were probably close to death.”

Startups that survive can profit from transparency with potential customers, said Shaun Abrahamson, managing partner at Third Sphere. “Really the hardest thing, at least over the last four years, has been the disconnect between what (companies) say publicly or what they feel they need to say and what happens when you ultimately meet the CFO. You will get a cleaner signal.”

A less climate-friendly administration could also hurt climate VCs themselves. Bakalar said that while we’ll likely see climate startups change their messaging and branding to avoid being related to the sector if it falls out of favor, enterprise firms cannot really do this, and climate-focused VCs may even see less interest in LPs over the course of next years next 4 years.

Silver linings

However, there are many sectors that may profit. Anything related to drilling, as Banchik mentioned earlier, including geothermal and geological hydrogen, will likely run counter to policies favoring oil and gas extraction. Both Posamentier and Banchik said energy grid startups will likely profit from the proposed permitting changes.

Power generation firms could also profit. Growing investments in artificial intelligence have forced firms to quickly expand their infrastructure. The breakneck pace of labor has strained utilities and independent power producers to the purpose that by 2027, almost half of all recent AI data centers may lack sufficient capability.

Banchik said beneficiaries are prone to include nuclear startups constructing small modular reactors (SMRs) and geothermal energy firms. SMR startups Kairos and X-Energy are already riding the AI ​​wave, having signed deals with Google and Amazon, respectively. Geothermal startups are also in the sport, with Fervo Energy partnering with Google and Sage Geosystems partnering with Meta to power its data centers.

Both technologies have a potential ally in Chris Wright, whom Trump selected as his energy secretary. Wright sits on the board of Oklo, an SMR startup, and his company Liberty Energy has invested in Fervo.

“He deals with oil and gas all day long, but he’s a smart guy,” said Posamentier, who frolicked with Wright in the sphere. There, Wright explained to Posamentier that he was electrifying his company’s fracking equipment since it was a higher technology. “He’s a guy who gets pilloried for being anticlimactic. It is neither anti- nor pro-climate. And he said, “Take care of economics.”

Investors and their portfolio firms may have to attend and see which predictions actually come true under the brand new administration and which of them don’t.

“The only constant is change and instability over the next four years,” Posamentier said.