“We believe the pre-end period will be filled with unprecedented opportunities for profit.” — New Yorker cartoon

When we published “Not Built for This: The Argument for Infrastructure Investing in an Unstable Climate” in January 2025, our thesis was straightforward: climate destabilization would drive urgent, massive infrastructure spending as aging systems fail under environmental pressures they were never designed to withstand. Just two months later, this argument has been dramatically reinforced—not despite, but because of aggressive federal climate policy rollbacks.  The New York Times offered this assessment on March 2:

In a few short weeks, President Trump has severely damaged the government’s ability to fight climate change, upending American environmental policy with moves that could have lasting implications for the country, and the planet… He is abandoning efforts to reduce global warming, even as the world has reached record levels of heat that scientists say is driven largely by the burning of fossil fuels. Every corner of the world is now experiencing the effects of these rising temperatures in the form of deadlier hurricanes, floods, wildfires and droughts, as well as species extinction. (David Gelles, Lisa Friedman and Brad Plumer, ‘‘Full on Fight Club’: How Trump Is Crushing U.S. Climate Policy,” NYT.com, 3/2/25)

The paradox is stark: as the new administration dismantles climate mitigation frameworks at unprecedented speed, it simultaneously accelerates the timeline for critical adaptive infrastructure investments. This retreat from prevention doesn’t eliminate the problem; it merely shifts financial responsibility while compressing the timeline for unavoidable infrastructure spending.

The Systematic Dismantling of Climate Policy

Since January 20, 2025, we’ve witnessed a calculated, comprehensive rollback of climate policies that extends far beyond typical administrative transitions. These actions don’t merely adjust priorities—they represent a fundamental rejection of climate science and preparation:

1. Withdrawal from International Frameworks

• Formal exit from the Paris Climate Accord, eliminating pressure to align infrastructure projects with global emissions targets
• Withdrawal from key global climate assessment initiatives, removing the U.S. from international collaborative planning

2. Rescinding Financial Commitments

• “Pausing” disbursement of approximately $294 billion in unallocated Infrastructure Investment and Jobs Act (IIJA) funds
• Freezing distribution of Inflation Reduction Act (IRA) funds earmarked for grid modernization and clean energy
• Signaling intent to eliminate electric vehicle subsidies and incentives

3. Dismantling Environmental Protections

• Initiating a review of the EPA’s authority to regulate greenhouse gases under the Clean Air Act
• Revoking requirements for federal contractors to disclose emissions, weakening corporate accountability
• Rolling back vehicle emissions standards implemented by the previous administration

4. Accelerating Fossil Fuel Expansion

• Declaring a “national energy emergency” to fast-track oil, gas, and coal production on federal lands
• Creating a “National Energy Dominance Council” to expedite fossil fuel infrastructure development. (Really? This so sounds like the invention of a roomful of junior high boys.)
• Encouraging energy exploration in previously restricted areas, including the Outer Continental Shelf

5. Erasing Climate Information Infrastructure

• Removing climate data from federal websites, including EPA’s climate section and the Climate and Economic Justice Screening Tool
• Dismissing approximately 800 employees from the National Oceanic and Atmospheric Administration (NOAA)
• Targeting probationary workers at the National Weather Service, potentially impacting up to 375 employees
• Instructing agencies like the National Disaster Preparedness Training Center to remove or revise references to “climate change” in course materials
• Canceling interconnection innovation webinars on grid efficiency crucial for decarbonization

This systematic erasure of climate science from government operations creates a dangerous knowledge gap precisely when more accurate information is needed for planning resilient infrastructure.

These are not the actions of men confident of their place in history. These are not the actions of men who believe the evidence is on their side. These are the actions of people who suspect that their time is short, their cause hollow and their hold weak.

“If the law is against you, talk about the evidence,” said a battered barrister “If the evidence is against you, talk about the law, and, since you ask me, if the law and the evidence are both against you, then pound on the table and yell like hell.” Carl Sandburg, “The People, Yes,” (1936)

And so, they pound the table and yell like hell. The question for people-as-investors is how best to respond, which is rather different from how people-as-citizens-of-the-planet might choose to respond.

The Infrastructure Investment Paradox

These policy shifts don’t negate the structural need for climate-resilient infrastructure—they amplify it. By abandoning mitigation efforts, the physical impacts of climate change (floods, heatwaves, storms) will accelerate, reinforcing the investment case for adaptive infrastructure while shifting financial responsibility to states, municipalities, and private investors.

Stuff that you might need to think about.

1. Accelerated Timeline for Adaptive Infrastructure

As federal climate guardrails disappear, physical impacts will intensify more rapidly, creating urgent demand for:

• Grid Resilience: Power systems require immediate hardening against extreme weather. With federal programs paused, private utilities face mounting pressure to fund upgrades independently. Heat-resistant transformers, underground lines, and micro-grid technologies will see surging demand.
• Water Systems: Coastal states now face the full financial burden of funding seawalls, stormwater systems, and water treatment facilities as federal resources evaporate. Municipal bonds for water infrastructure are already seeing increased issuance.
• Disaster Response Infrastructure: Demand for wildfire-resistant materials, flood barriers, and emergency response systems is growing exponentially as federal climate-resilience programs diminish.

2. Energy Sector: Conflicting Investment Signals

The energy infrastructure landscape has bifurcated dramatically:

• Fossil Fuel Infrastructure: Midstream energy transport, refineries, and storage projects benefit from regulatory rollbacks and the “national energy emergency” declaration. (A bunch of MLP funds, such as Alerian Energy Infrastructure ETF, likewise.)
• State-Led Clean Energy: Despite federal headwinds, states with renewable portfolio standards continue advancing clean energy projects, creating investment opportunities in jurisdictions with clear climate commitments. Texas, being Texas, is committing itself to nuclear power despite the mismatch between immediate needs and the 10-20 year lead time on new nuclear. But it’s Manly Energy.
• Corporate-Driven Renewables: Major corporations with net-zero pledges are increasing private renewable procurement, driving demand for transmission infrastructure independent of federal support.

3. Public-Private Partnerships (P3): The New Financial Reality

With federal funding uncertain and climate impacts intensifying, P3s have evolved from preference to necessity:

• State governments are increasingly turning to private capital for essential infrastructure that can no longer wait for federal funding
• Toll roads, water systems, airports, and smart-city technologies represent growing P3 opportunities
• Private investors face both higher potential returns and greater demands for speed as climate-driven infrastructure failures accelerate

4. The Climate Data Vacuum: A Private Sector Opportunity

The removal of federal climate data resources has created an immediate market for private climate analytics:

• Insurance companies, utilities, and municipalities now lack critical federal climate projection tools.
• Private climate risk assessment firms have seen valuation increases of 30-40% since January.
• Infrastructure investors increasingly require specialized climate risk analysis previously provided by federal agencies.

While not relevant to regular investors, the option of exploring investments in private climate risk firms might be promising for advisors and more sophisticated professionals.

Investment options

Three broad categories of options are available.

• Infrastructure funds and ETFs. In January we highlighted a half dozen funds that invest broadly across infrastructure classes, including Centre Global Infrastructure Fund (DHIVX) and Global X U.S. Infrastructure Development ETF (PAVE). In February, after reader requests, we added a spotlight on promising water infrastructure options, including Invesco Water Resources ETF (PHO) and Fidelity Sustainable Water (FLOWX).  We’ll only add here that in the three turbulent months since the election, just two infrastructure funds have posted positive returns: BNY Mellow Global Infrastructure Income ETF (BKGI) and Lazard Global Listed Infrastructure (GLFOX).
• Municipal Bonds: Coastal states are accelerating the issuance of resilience bonds, with New Jersey and Florida leading in new climate-adaptive municipal debt.
• Private Equity: Climate-resilient real assets—data centers, logistics hubs, and renewable power—are attracting premium valuations, with several major PE firms launching dedicated climate-resilience infrastructure funds.

The Investment Imperative: Profit from Prevention’s Failure

The climate pendulum has swung dramatically from mitigation to adaptation, creating a compelling investment case. The current administration’s policies, while undermining climate stabilization efforts, inadvertently strengthen the most profitable segment of climate infrastructure investing: emergency adaptation.

Infrastructure investors now face a stark reality: government retreat from climate science doesn’t make climate change disappear—it merely privatizes the response. As sea levels rise, storms intensify, and temperatures climb, the infrastructure built for yesterday’s climate will fail at accelerating rates. The companies and investors positioned to rebuild these systems for tomorrow’s hostile climate stand to capture unprecedented value.

The darkly comic New Yorker cartoon that opened our January report has proved prescient more quickly than expected. While the current trajectory may indeed lead to “end-of-the-world scenarios rife with unimaginable horrors” with a third of the US nearly uninhabitable,  the intervening period of infrastructure adaptation has already begun to generate some social and financial good.

This article updates “Not Built for This: The Argument for Infrastructure Investing in an Unstable Climate” (January 2025) with policy developments through March 2025.