Changes in US Environmental Policy Under the Trump Administration: An Economic Perspective¹

Since President Donald Trump took office for a second time in January 2025, his administration has initiated a flurry of actions to fundamentally alter environmental policy in the US. These actions include, among other things, climate change policy, renewable and fossil-fuel energy production, public land management, water and air pollution policy, and methods that must be used by federal agencies when performing economic analyses of environmental regulations.The Trump administration has promoted these changes by saying that they will improve the economy and increase government efficiency.In contrast to this rhetoric, these changes are likely to reduce rather than increase economic efficiency, as well as increase costs and reduce welfare for American citizens and people around the world. In this paper, we document and discuss the multiple ways in which the Trump administration’s recent and proposed changes related to the environment violate foundational principles of environmental economics in ways that will likely lead to lower overall social welfare.