COP30 and the Geopolitical Risks and Opportunities in Green Energy Transition

The 30th Conference of the Parties (COP30), set to convene in Belém, Brazil, in November 2025, will serve as a critical juncture for global climate action. As nations grapple with the dual challenges of energy transition and geopolitical realignment, two key players—the United States and Brazil—offer contrasting narratives of risk and opportunity. The U.S. under President Donald Trump has introduced sweeping policy reversals that threaten to destabilize clean energy investments, while Brazil, despite domestic contradictions, is leveraging its COP30 presidency to position itself as a leader in climate diplomacy. Investors must navigate these divergent trajectories to assess the resilience of green energy markets.

U.S. Policy Uncertainty: A Double-Edged Sword

The Trump administration’s executive orders and the “One Big Beautiful Bill” (OBBB) have created a volatile environment for U.S. clean energy investments. By pausing disbursements under the Inflation Reduction Act (IRA) and accelerating the phaseout of tax credits for wind and solar projects, the administration has introduced regulatory and financial risks for developers. The OBBB’s requirement that solar and wind projects be operational by 2027 or face losing incentives could reduce new clean power capacity by 53-59% between 2025 and 2035, jeopardizing over half a trillion dollars in investments [1]. Additionally, the bill’s expanded “foreign entity of concern” (FEOC) rules, which restrict tax credits for projects tied to Chinese firms, signal a shift toward protectionism that could disrupt global supply chains [2].

While the IRA’s tax credits for carbon capture and hydrogen remain intact, the broader policy uncertainty—coupled with the administration’s directive to review and potentially rescind climate-related regulations—has created a “regulatory fog” for investors [3]. Legal challenges and potential congressional action via the Congressional Review Act further complicate the landscape, leaving developers to hedge against abrupt policy shifts [4].

Brazil’s Strategic Climate Push: Ambition Amid Contradictions

Brazil’s COP30 agenda, centered on a “Global Action Agenda” to accelerate the Paris Agreement’s implementation, highlights its ambition to lead the energy transition. The country added 21 GW of renewable capacity in 2024 alone, supported by $37 billion in clean energy investment and creating 340,000 jobs [5]. However, Brazil’s domestic policies are at odds with its international commitments. A recently passed environmental licensing bill has weakened oversight for mining and infrastructure projects, drawing criticism for enabling deforestation and fossil fuel expansion [6]. President Lula da Silva’s veto of some provisions has not fully quelled concerns, as the law still streamlines approvals for “strategic” projects, often at the expense of Indigenous consultation [7].

Despite these contradictions, Brazil is advancing a climate and health action plan to be presented at COP30, emphasizing health systems’ resilience to climate impacts [8]. The country also advocates for a “Global Climate Resilience package,” including mechanisms like the Tropical Forest Forever Facility, to finance tropical forest conservation [9]. These efforts, however, face skepticism given the lack of progress in Bonn climate talks and Brazil’s reliance on fossil fuels [10].

Geopolitical Implications and Investor Strategies

The U.S. and Brazil exemplify the geopolitical tensions shaping the green energy transition. In the U.S., policy reversals risk fragmenting the clean energy market, forcing developers to prioritize short-term project timelines and domestic sourcing to qualify for tax credits [1]. Investors must also weigh the likelihood of legal challenges to the OBBB and potential congressional overrides.

For Brazil, the COP30 summit offers an opportunity to reconcile its domestic contradictions with its global climate leadership aspirations. Success will depend on its ability to demonstrate tangible progress in curbing deforestation, strengthening environmental governance, and aligning its energy policies with the Global Stocktake’s goals [2]. Investors in Brazil’s renewables sector may benefit from the country’s ambitious renewable targets but must remain cautious of regulatory rollbacks and social unrest tied to environmental degradation [6].

Conclusion

COP30 will test the resilience of global climate commitments in an era of geopolitical fragmentation. While the U.S. retreats into policy uncertainty, Brazil’s strategic push—despite domestic challenges—highlights the potential for multilateral cooperation. Investors must adopt a dual strategy: hedging against U.S. regulatory volatility while capitalizing on Brazil’s renewable momentum, all while demanding transparency and accountability from both governments. The green energy transition, after all, is not just a technological shift but a geopolitical recalibration.

Source:
[1] Rhodium Group, Latham & Watkins analysis on OBBB impacts [https://rhg.com/research/assessing-the-impacts-of-the-final-one-big-beautiful-bill/; https://www.lw.com/en/insights/one-big-beautiful-bill-new-law-disrupts-clean-energy-investment]
[2] Brazil’s COP30 presidency and climate agenda [https://cop30.br/en/brazilian-presidency/letters-from-the-presidency/fourth-letter-from-the-presidency; https://www.iigcc.org/insights/cop30-in-bel%C3%A9m-a-simple-guide-to-most-used-un-climate-terms]
[3] Sidley Austin on U.S. clean energy policy shifts [https://www.sidley.com/en/insights/newsupdates/2025/07/the-one-big-beautiful-bill-act-navigating-the-new-energy-landscape]
[4] Congressional Review Act and legal risks [https://www.wsgr.com/en/insights/president-donald-j-trumps-executive-orders-and-actions-regarding-clean-energy-and-climate-technologies-january-2025.html]
[5] Brazil’s renewable energy growth in 2024 [https://globalrenewablesalliance.org/news/private-sector-backs-cop30-action-agenda-with-energy-implementation-plan/]
[6] Environmental licensing bill in Brazil [https://www.climatechangenews.com/2025/07/23/brazil-under-fire-for-weakening-environmental-rules-ahead-of-cop30-climate-summit/]
[7] Lula’s veto and environmental reforms [https://www.climatechangenews.com/2025/08/11/brazil-cop30-environmental-regulations-devastation-lula-veto/]
[8] Climate and health action plan [https://heathealth.info/news/brazil-is-crafting-an-action-plan-on-climate-and-health-ahead-of-cop30/]
[9] Global Climate Resilience package [https://nature4climate.org/liliam-chagas-cop-30-vision/]
[10] Bonn climate talks and Brazil’s credibility [https://www.iddri.org/en/publications-and-events/blog-post/bonn-2025-climate-talks-brazils-first-diplomatic-test-ahead-cop30]