The bigger question is how much influence Trump has outside the US. This is up to us. There is a world where Trump’s actions mean the global race to decarbonise loses momentum.

Economics describes “the free rider problem”,where some people have an unfair advantage because they are not paying a fair share (or paying nothing at all) for a shared resource. If the world’s largest economy is free riding by not cutting emissions,the other Paris signatories may be less inclined to do their part as well.

Australia is a small contributor to global emissions – if you don’t count our fossil fuel exports – but we can’t afford to get left behind.

Pessimism about our collective ability to effectively tackle climate change can also mean people – voters,business leaders and politicians – succumb to despair. This can lead to a nihilistic impulse – the attitude that “the world is burning,so I may as well look after No.1”.

Finally,politicians who seek to emulate Trump and exploit mistrust of renewables may gain the ascendancy. There are certainly signs this could happen in Australia. Yet,there is also a world where other countries go hell for leather in cutting emissions while waiting for the US to return to the fold.

Don’t forget,we have been here before. Trump also withdrew the US from global climate treaties the first time he was president. The rest of the world got on with the job,then Joe Biden came to office and rejoined the pact.

There is a pipeline of potential investment in renewables projects including large offshore developments in the US. Global investors will be looking to redirect that money,andAustralia has a chance to capitalise on this situation,or it will cede ground to other countries.

As one example,the Danish owner of Star of the South in Gippsland is looking at possible new sites for offshore wind projects including in Australia and New Zealand.

Many large countries and groupings have finally hit their stride with decarbonisation and this won’t be abandoned just because of Trump.

In the European Union,Carbon Briefreports thatcoal power use has fallen by almost two-thirds in the past decade,while solar power output has tripled. Last year,it overtook coal generation for the first time;and wind power has doubled.

And what about the world’s largest emitter of carbon dioxide?China installed a massive 301 gigawatts of renewable capacity including solar,wind and hydro in 2023 alone,more than the total renewable generating capacity installed in most countries over all time. As of May 2024,“clean energy” generated a record high 44 per cent of China’s electricity.

Observers believeemissions in China may have peaked,as this masthead reported last year.

Will Europe and China simply let the US be a free rider? They have plenty of ways to fight back.

Europe is phasing in a Carbon Border Adjustment Mechanism,a fee or tariff levied on imported goods based on the greenhouse gases emitted during their production. It is due to be fully operational by 2026.

China,while critical of the European levy as protectionism in a green guise,is no stranger to a surgically targeted tariff. What the superpower does in response to Trump walking back climate policies remains to be seen.

Australia has also been investigating the feasibility of applying its own Carbon Border Adjustment Mechanism.

Australian export businesses need to be ready for this new development. Zachary Zeus,head of start-up Pyx Global,says that under a Carbon Border Adjustment Mechanism,individual businesses may be able to avoid tariffs by sharing verifiable information through the UN’s transparency protocol.

Australia has endured a destructive political battle over climate action for at least two decades,and it will feature againin the federal election this year.

The government has a policy to dramatically expand renewables,while the Coalition wants to extend the life of coal-fired power stations for another decade or two while building nuclear power plants instead.

Echoing Trump’s opposition to offshore wind,Opposition Leader Peter Dutton has vowed to scrap three of the Albanese government’s six offshore wind zones;two in NSW and one in Western Australia.

Most energy experts say Dutton’s nuclear policy is fantasy because of political opposition and the time it would take to build. Even renownednuclear advocate and investor Bill Gates toldThe Australian Financial Reviewin 2023 that nuclear for Australia was “not worth touching” and the nation should focus on its advantages with renewables.

Former Coalition MP Christopher Pyne also acknowledged nuclear was not going to happen in Australia in a recent opinion column,though he couched it as praise for Dutton’s political strategy.

Australia is a small contributor to global emissions – if you don’t count our fossil fuel exports – but we can’t afford to get left behind as the world responds to Trump 2.0. Being swayed to emulate his energy policies would be a mistake.

Ross Gittins is on leave.

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