Keeping The Climate Agenda On Track In A Trumpian World – OpEd

The election of Donald Trump in November 2024 has seen the United States, in rapid succession, exit the Paris Agreement on climate change and move to impose punishing tariffs on imports from countries around the world. This is a mighty double hit on the world’s ambitions to deal with the existential problem of climate change.

As one of the world’s two biggest carbon emitters, the United States’ desertion of the Paris Agreement directly jeopardises reining back emissions and keeping global climate targets on track. Even more dangerous, Trump’s assault on global trade threatens to undermine the transformation of the global energy system through the trade, technology transfer and investment essential to cutting the growth of greenhouse gases.

The United States’ walking away from the Paris Agreement and setting out to trash the global economic order creates a whole new level of uncertainty about the future of the international cooperation that is needed if we are to deal with the climate problem.

One thing, however, is certain: the United States will not be a constructive national player on climate change for some time to come. And the United States is no longer a responsible custodian of, or even participant in, the rules based international trade order and will not be for an equally long time. 

Trust of the kind that the United States has enjoyed at the centre of the global economic and political order takes years to build. It has been destroyed in less than 100 days of Trump’s administration.

In the face of the US geopolitical maelstrom, can the rest of the world keep the climate agenda on course? What initiatives might help to achieve this?

There are people in every country who would deny or wish away the impact of man-made climate change. The United States, at least for the moment, is exceptional in having a national government that is almost totally dominated by such people — though Australia too once had such a government. Most governments, however, still have strong popular mandates for achieving their declared zero carbon goals. Communities around the world are confronted with intensifying natural disasters and their increasing severity and frequency that are its consequence. These events provide the foundation of support for the global climate agenda, minus national leadership in the United States.

The global constituency for addressing climate change still provides incentive to businesses and farmers around the world to invest in a zero-carbon future and the innovation that is needed to make it happen. Elon Musk, and other US entrepreneurs, will hopefully continue to capitalise on the opportunities of a green economy future despite the unfavourable national policy environment they face under the Trump administration.

In China and Europe where the policy environment has been conducive to building a renewable energy future, new industries and technologies have dramatically lowered the costs of energy transition and begun to claw back on carbon emissions. China and Europe have spawned comparative advantages in decarbonisation in production and consumption. The cost of solar power has fallen by 85 per cent and the cost of wind energy halved in a decade or so and Chinese capacity is rapidly lowering the cost of electric vehicles.

Through open trade, technology embedded in green goods and transferred through investment, these centres of industrial innovation and energy transition are the agents of decarbonisation across the world. As the response to climate change reshapes and alters the global economy and supply chains, it opens opportunities for ambitious, strategic corporate and government players. These players will be able to accelerate the uptake of new technologies and practices that reduce emissions, create jobs and underpin economic growth across a wider range of countries and economies.

The scale of resources needed to invest in climate change is daunting. The International Energy Agency estimates that, by the early 2030s, the world will need to invest US$4.5 trillion annually to remain on track for a net zero transition by 2050. Mobilising international public funding will now be harder and new sources of public funding will have to be mobilised. China is well placed to step into the breach. Policy frameworks and settings, and their extension through cooperation across national and regional borders, are essential to encourage private funding of sustainable investments, and now more importantly than ever. 

The problem is that US withdrawal from international climate cooperation and its frontal attack on the global trade regime could both become contagious.

The immediate effect of Trump-induced global economic uncertainty is to undermine investor confidence not only in North America but around the world. Elevated international uncertainty is bad for business. It could be fatal for international climate change and trade cooperation unless the rest of the world doubles down on the multilateral, rules-based trade order and keeps the global climate change agenda on track.

Like-minded countries will have to step up in an unprecedented way to leverage existing frameworks that create and keep open the markets for low carbon, sustainable goods and services.

In this week’s lead essay, Ma Jun suggests that East Asian partners in the Regional Comprehensive Economic Partnership (RCEP) arrangement have incentives to establish a beachhead of international cooperation on climate change and against protectionism through a regional green trade initiative. An RCEP green trade bloc would help to unlock a sustainable transition and enhance economic growth across a large part of the global economy. An open East Asian green trade arrangement, Ma argues, would ‘reduce the costs of green goods and services in most countries, boost green industries and enable faster and wider adoption of low-carbon practices and technologies’.

Cementing and deepening cooperation between Europe, China and East Asia on the development of common financial frameworks (through the Multi-Jurisdiction Common Ground Taxonomy) for green investment is an important complement to working together on keeping trade and investment open. 

East Asia has the platform in place and the leverage to make a difference to global outcomes if it moves swiftly on both fronts.

• Source: This article was published by East Asia Forum. The EAF Editorial Board is located in the Crawford School of Public Policy, College of Law, Policy and Governance, The Australian National University.