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| Whether Australia is able to achieve net zero by 2050 will depend on our political choices and the decisions of Australian governments in the next few years. Illustration: 360info |
Ross Garnaut AC Ross Garnaut is an economist whose career has been built around the analysis of and practice of policy connected to development, economic policy and international relations in Australia, Asia and the Pacific. He has held senior roles in universities, business, government and other Australian and international institutions.Ross Garnaut is:
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The start of a second Trump US presidency has led many to question the future outlook for energy in Australia and around the world, and what impact the new US administration will have on the move towards net zero.
Economist Ross Garnau, professor emeritus at both the Australian National University and the University of Melbourne, spoke to Info 360 about where things stand.
Q: Last November, you seemed to think there were real prospects for renewables in the world and the move towards net zero. You thought that the political and international settings for the environment were favourable. What’s your feeling today?
A: I certainly thought there were prospects of moving forward. A number of aspects of the international settings were favourable.
China is not only the world’s main producer of capital goods for the new economy, but also by far the world’s biggest user of renewables.
Last year China produced more renewable energy than the rest of the world combined. Europe and other economies of North-East Asia are also making good progress.
And that creates a huge opportunity for Australia to use some of our renewable energy resources to support new industries exporting goods, especially to Europe and North-East Asia — countries that can’t generate the renewable energy to do it themselves.
The election of Trump doesn’t change the physics [of climate change] one bit. Atmospheric physics doesn’t care who wins American elections or what commentators are saying on Fox News.
Climate change is getting more severe and that will require a response, even though that may be an ignorant response. If it turns out to be an ignorant response, that would undermine our social and political order.
But it may also engender a positive response. I certainly think [Trump’s election] will have a negative effect on the US’s interaction with the international community. It may not have such a big negative effect in the United States, because Trump may not find it easy to repeal all the Biden measures.
Q: One of the first executive orders Trump signed was to withdraw from the Paris Agreement again. How do you see the impact of that decision on the rest of the world?
A: That’s up to the rest of the world. It will be influential. But, the rest of the world can choose to resist that influence.
If the rest of the world bows to the influence, that could seriously affect commitments towards net zero in major economies generating a large amount of greenhouse gases, such as China, Japan, Korea, the European countries, and India. That would certainly have a big negative effect on international development towards net zero.
But it’s not certain that will be the case. China sees a geopolitical opportunity in America’s withdrawal from Paris. It’s already actively promoting its own decarbonisation. China is a huge ship to turn around, but it’s turning around. And it has momentum now in moving its industries towards a zero-carbon economy.
It will use its industrial strength to enhance cooperation with other countries wanting to move to net zero. And the speed of that move depends on their domestic politics and whether governments of the centre right or centre left, remain in power in the big European countries, such as Germany, France, and the UK. If they do, there is every prospect of the Paris commitments surviving, despite the change in US.
But if the US developments become instrumental in changing political direction in the rest of the world, then that will have a big negative effect on the world’s action on climate change.
Q: For big carbon-emitting businesses will that mean they can do whatever they want in terms of gas and oil exploration in the US? Do you expect that to follow in the rest of the world as well?
A: We still have a lot of business commitments to taking action on climate [change]. But for some businesses those commitments are only skin deep, dollar deep, and we’ve already seen some reversals in the rest of the world.
Macquarie Bank, for example, headquartered in Australia has retreated on Paris commitments. Many companies around the world will use the US changes to pull back on those commitments.
We can’t rely on voluntary action by business to deliver good outcomes. You need policy and incentives because most businesses will only do what is profitable. Nevertheless, there are opportunities for businesses that are prepared to stay the course on climate commitments and they will be in a strong position when America comes back to the Paris agreements, as it may.
Q: What about business decisions in Australia, particularly for gas and oil exploration?
A: The mood has certainly moved. The barriers to Australia increasing its emissions and not meeting emissions targets has been weakened. However, both the government and opposition remain committed to net zero.
If we in Australia allow too much gas development, it will become impossible for us to achieve net zero by 2050. The outcome depends on our own political choices and the decisions that Australian governments make over the next few years, at a time that Trump is signalling that he has little to no interest in renewables.
Q: How do you see the opportunities for renewable development in Australia? I’m thinking particularly of opportunities for rural Australia.
A: Renewable energy is the cheapest form of energy. There’s lots of smokescreens around that but serious people in business know that you wouldn’t invest now in a coal-based power station because it would not be as cheap as investing in the best renewables backed by storage.
Links
- Renewable Energy Jobs: Future Growth in Australia (pdf)
- Battery Storage: Australia’s current climate
- China built out record amount of wind and solar power in 2024
- WMO confirms 2024 as warmest year on record at about 1.55°C above pre-industrial level
- Putting America First in International Environmental Agreements
- Why Trump 2.0 can’t be ignored on climate
- Turning point: China permitted no new coal-based steel projects in H1 2024 as policies drive decarbonisation
- Australia's Macquarie joins major banks in exiting global climate coalition
- About Net Zero Australia
- Renewables Competitiveness Accelerates, Despite Cost Inflation
- Australia in the Global Response to Climate Change Summary (pdf)
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