Will Trump’s move to leave the Paris Accord impact the WA Economy?
Consultant, Molly Cooke
On June 2, the 45th President of the United States, Donald Trump, made the historic decision to withdraw his country from the Paris climate change agreement.
Signed in 2016, this accord was the world’s first comprehensive climate agreement and signatories promised to make a collective effort to mitigate global warming. By withdrawing from its commitment, the USA joins Syria and Nicaragua as the only countries to refuse to adhere to this global pact. America is also the second largest emitter of greenhouse gases globally.
Trump justified this retraction as an attempt to protect American jobs. “‘I was elected to represent citizens of Pittsburgh, not Paris,” he said.
Seemingly not everyone in Pittsburgh is behind Trump’s decision. Pittsburgh Major, Bill Peduto, used Twitter to assure constituents that Pittsburgh would follow the guidelines of the Paris accord “for our people, our economy and future”.
In making this decision, President Trump has not just drawn the ire of Americans. A range of international governments expressed regret at Trumps decision.
The newly elected President of France, Emmanuel Macron, went so far as to address his nation in a rare speech in English. He urged French allies to speed up efforts to combat climate change, and appropriated Trump’s “Make America Great Again” campaign slogan. ““We all share the same responsibility to make our planet great again,” Macron said.
But beyond this international posturing, what impact will Trump’s decision have on Australia and WA?
Politically, Australia has not been swayed by Trump’s announcement and is still committed to meeting its Paris targets. Federal Minister for the Environment and Energy, Josh Frydenberg, told the ABC
a 26% to 28% reduction in emissions by 2030 is still reasonable and achievable.
This sees Australia’s interests deviate even further from one of its historic allies. Australia’s economy now more closely aligns with neighbours like China, another signatory to the Paris agreement and proponent of renewable energy sources. China is now the world’s largest supplier of solar PV panels and is gearing up to enter the emerging field of large scale batteries.
In Australia and across the globe, renewable energy sources are now cheaper than fossil fuel power generation. This finding, supported by the World Economic Forum
, has seen government and industry look for ways to replace coal and diesel fired generation with wind, solar, biomass and wave alternatives.
Based on this, Trump’s insistence in propping up America’s steel and coal industries will make the country’s exports increasingly more expensive in global terms. America’s exit from the Paris accord also leaves other countries free to impose a carbon tax on American imports, something that the European Union and China have already threatened to do.
These financial penalties could see American high tech companies and renewable technology suppliers begin to look to countries like Australia for opportunities and potential business relocation. WA will benefit from its abundant resources such as lithium and heavy rare earths which are used in renewable energy and storage.
If we weren’t so worried about the planet, we’d be celebrating the future profits.