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Trump's Paris climate withdrawal changes everything - and nothing

Adam Morton

We live in times of extraordinary and abrupt change, not just in the climate.

On January 17, US President Barack Obama gave $500 million to the UN's Green Climate Fund, part of the architecture of the Paris accord designed to help the poorest and hardest hit areas. Three days later he was replaced by Donald Trump, who had declared in a stunt tweet that global warming was a Chinese hoax. There was, and remains, no evidence Trump had spent even five minutes considering the science he rejected.

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Trump announces withdrawal from climate deal

President Trump has announced that the US will withdraw from the Paris Agreement.

Trump's confirmation that he will act on his pledge to pull the US out of the global climate deal – a pledge that, like most people, he almost certainly never believed he would have the chance to act on – is likely to have unpredictable consequences. But there will be a couple of obvious upshots.

There will be calls from hard-right politicians and media cheerleaders to follow his retreat, either through complete withdrawal or a weakened response. They may have some success, here and there.

Secondly, as the US is responsible for nearly a fifth of global carbon dioxide emissions, Trump's reversal of Obama's clean energy plan will have a real-world impact that increases warming, and changes the planet in ways that affect lives and challenge species' ability to survive. Part of it will be offset by what's happening at state level - California, bigger than most countries, is cutting emissions by 40 per cent by 2030 - but it will do damage.

This was happening even if he stayed in the accord. To some extent, the Paris deal was a global show of good faith. There is nothing in it forcing countries to meet their (to date, mostly inadequate) targets.

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But here's the other side of the coin. Action is happening, direct or not, and regardless of Trump. Three-quarters of the 195 governments that signed the Paris accord moved quickly to explain it to their citizens and formally ratified it.

Talk to business leaders and you will hear that Paris has changed things - not through centrally imposed targets, but through sentiment. The accord was never going to be a solution on its own. For starters, its numbers don't add up to solving the problem. But investors recognised it put the world on an inevitable path to cutting emissions.

There are near endless examples of this in practice. Last month, as the federal Coalition and Queensland Labor governments squabbled over who was more willing to subsidise Indian company Adani to dig a giant export coal mine in the Australian outback, the subcontinent set a record price for large-scale solar power that was 20 per cent cheaper than the going rate for coal, and 40 per cent cheaper than the best price for solar just a year earlier. India will continue to use plenty of coal, but it's arguably not the ideal trajectory under which to open up a huge new supply of the stuff.

This week, with Trump's announcement pending, the US coal industry – alone among businesses in its outspoken support for withdrawal from Paris - suffered a 3 per cent fall in price after details of the decision leaked. In part, this was because commodities were down generally. But analysts also pointed to the continuing growth in cheaper gas-fired power plants and clean energy, and to investors being disinclined to build coal plants with decades-long lifespans. They didn't believe Trump's decision will stick.

Meanwhile, China and the European Union – the world's first and third biggest emitters, if the EU is counted as a block – pointedly reaffirmed their commitment to meet their Paris targets and drive clean energy growth, describing the deal as "more important than ever".

Other countries, including Australia, have been similarly strong in their response. Malcolm Turnbull and Environment Minister Josh Frydenberg brought forward the announcement that they had ratified the Paris accord to send a clear signal on the day after Trump's election. Senior ministers were forceful in their support for it this week.

But there is a battle ahead both in and outside the Coalition, a point that Frydenberg acknowledged in a speech on Wednesday. The ideological arrogance of backbenchers such as Craig Kelly, who recommended his Facebook supporters put "champagne on ice" as the Trump announcement neared, isn't easily swayed by evidence.

Politics alone suggests the government will hold its line on the accord. Poll after poll has found a majority of Australians want action on climate change. After abolishing a functioning carbon price, the Coalition has spent years trying to rebuff the idea it isn't serious about the problem, including designing a $2.5 billion direct action policy to appear to be doing something. It's unlikely to suddenly tell the electorate it doesn't care by just walking away.

The pressing question is whether the Coalition can do anything to put it on track to meet its Paris target (a 26-28 per cent emissions cut below 2005 levels by 2030). That path will start to become clearer next week, when chief scientist Alan Finkel publishes his recommendations on energy security and climate policy.

Reflecting the need to both give unflinching advice and present a political solution, it is understood he will raise the new option of a 2030 low emissions target – one of the few answers to cutting emissions in the electricity sector that the government hasn't rejected. It would effectively mean extending the 2020 renewable energy target, but opening it up to lower emissions technologies such as gas. The level of support paid would be weighted by emissions intensity, with clean fuels getting more.

There is some support for this approach in Coalition heartland, notably among columnists at The Australian. It is not the cheapest way ahead – that remains the rejected emissions intensity scheme - but together with a policy that forced coal plants they reached a certain age, possibly 50 years, it could give energy businesses the signal they need to invest. It would be a start, again.

Of course, whether even that get through the Coalition after Trump call is anyone's guess. If a decade of observing climate politics teaches you anything, it is to take nothing for granted.

Adam Morton is on Facebook and Twitter