Pulling out of the global climate pact was among the first orders of business for returning United States president Donald Trump on day one back in office.
While questions hang over the legality of some of the executive orders the Republican signed on his first day, his early actions have set the tone for the demotion of renewables and climate action under his government.
The world’s second-largest emitter quitting the global Paris agreement is expected to make the task of curbing temperature rise even more difficult, though Australian proponents of climate action and the energy transition are mindful it has happened before.
Smart Energy Council chief executive officer John Grimes said he was attending an International Energy Agency meeting back when Trump pulled out of the Paris accord during his first term.
“I saw something really extraordinary happen,” he told AAP.
“All those countries who had been complacent, who had allowed America to take the lead … suddenly had to take responsibility, and actually had to start to really dig in.”
Yet Mr Grimes was realistic about US policy shifts under new leadership.
As well as pulling out of Paris, the 47th president has vowed to halt new offshore wind farm approvals and declared an “energy emergency” in a bid to drive up oil and gas production.
Mr Grimes was concerned there would be less momentum behind what had become a competitive global race for prominence in clean manufacturing – responsible for rapid innovation and dragging down prices for batteries and other technologies integral to the transition.
While China has long dominated the space, the Biden Administration entered the fray with the Inflation Reduction Act that included incentives for low carbon industries.
Christian Downie, Associate Professor at Australian National University’s School of Regulation and Global Governance, said Trump’s swift attack on the IRA was concerning given hopes the legislation had the backing of several Republicans.
Yet the US moving away from clean manufacturing poses opportunities for other nations, Assoc Prof Downie said, with China poised to cement its early-mover position.
Australia could also benefit, with the expert encouraged by the federal government’s revived pursuit of its Future Made in Australia agenda, including tax incentives for clean aluminium.
Climate Change and Energy Minister Chris Bowen said investing in Australia’s “renewable energy future” was in the country’s best interests, regardless of US actions.
“If a country decides they want less renewable energy investment that opens up other opportunities for Australia,” the minister told reporters on Thursday.
Australia could further benefit from President Trump vying to reverse the Biden Administration’s efforts to put more electric cars on American roads.
Electric Vehicle Council head of policy, legal and advocacy Aman Gaur said Australia could end up with cheaper electric cars if fewer vehicles were destined for the US market.
Mr Gaur said some of the vehicles manufacturers had earmarked for the US would end up in Australia, noting adjustments from left-hand drive to right-hand drive was already possible and becoming easier.
Manufacturers would then compete hard for market share, further weighing on prices already falling as more models become available and Australia’s vehicle efficiency standards kick in.
“If we have cheaper electric cars, more, say, middle Australia will be into them, which means that they will save a few thousand dollars a year but it also means we can hit those climate reduction targets as quick as possible,” he told AAP.
Overall, Assoc Prof Downie said Australia’s capacity to reduce its own emissions should be more or less the same under the US policy shifts flagged so far.
For him, the biggest implications for Australia stemmed from its pitch to host the COP31 climate talks in 2026, with a rival bid from Turkey still in the mix.
“Australia’s task in building momentum around those negotiations is going to be more difficult when one of our traditionally closest allies is moving in the opposite direction.”
Assoc Prof Downie said Australia should be establishing and reinforcing alliances in Asia and Europe as a priority.
“Should Australia also walk away from action on climate change, that’d be a big mistake,” he added.
Mr Grimes foresaw a similar dismantling of Australia’s renewables ecosystem were the federal opposition to return to power.
“Nuclear energy is a foil for actually locking in, rebuilding and reinvesting in the fossil fuel infrastructure that underpins our energy system, that rolls back the (clean energy) transition as far as possible,” he said.
The Peter Dutton-led coalition has embraced nuclear energy as the best way to achieve net zero and says Labor’s “renewables-only” plan is leading to higher energy prices.
