ALP’s workaround to cope with a new US political climate

The Albanese government has raised the prospect of working more closely with Democrat-controlled states in the US on climate change initiatives.

Anthony Albanese in Sydney on Tuesday. Picture: NewsWire/ Gaye Gerard

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The Albanese government has raised the prospect of working directly with Democrat-controlled states in the US on climate change initiatives, after Donald Trump signed an executive order to pull out of the Paris agreement while vowing to unwind support for low-carbon industries.

The Prime Minister and Foreign Minister Penny Wong refused to comment on elements of the Trump agenda that are widely divergent from Labor’s, with the government desperate to avoid tariff threats that would damage its re-election chances.

After being sworn in as the 47th president of the US, Mr Trump on Tuesday made moves to pull out of Paris, end subsidies for electric vehicles, expand the fossil fuel sector, ban transgender people from serving in the military, end inclusivity programs, further wind back free trade, exit the World Health Organisation and pardon January 6 rioters.

He also reiterated his intention to end the war in Ukraine and acquire Greenland and the Panama Canal, while referring to outgoing Canadian Prime Minister Justin Trudeau as a “governor”.

Mr Albanese said he would not offer a “running commentary” on Mr Trump’s domestic agenda, while Senator Wong said she would keep her focus on the aspects of US foreign policy related to the Indo-Pacific region.

Senator Wong is meeting with new Secretary of State Marco Rubio in Washington on Wednesday (AEDT), as part of a Quad meeting of foreign ministers, but signalled the Labor government would not adopt a more hawkish position on China in line with that of the Trump administration.

With the government’s Future Made in Australia agenda being aimed at exporting low-emission products, Industry Minister Ed Husic said there were a “number of different US states benefiting” from former president Joe Biden’s decarbonisation policies.

“So I’d wait and see before we sort of make a broader assessment,” Mr Husic told ABC radio.

The Albanese government in 2023 signed a memorandum of understanding with California, led by Democrat Governor Gavin Newsom, to co-operate on the “clean energy transition”.

After Labor this week unveiled $2bn in tax breaks to help the aluminium sector decarbonise, Mr Husic said there would be other countries to export low-emission products to if the US downgrades its climate ambitions.

“If one country decides they’re not necessarily going to place as great an emphasis on this process, there will be other countries that still do, either in our regional neighbourhood or in parts of the world like the EU,” Mr Husic said.

“And so we’ve got a great chance for us to be able to work with those countries and, as a result, strengthen our own economy and commercial opportunities.”

As Mr Trump reiterated his plans to expand fossil fuel development in the US, Beach Energy CEO Brett Woods said Australia should follow the President’s lead especially as the country’s east coast faces a looming gas shortfall.

“Today we woke to news of Donald Trump using his inauguration speech to outline how his administration will tackle inflation and support manufacturing by increasing oil and gas exploration and production. Australia has a similar opportunity – particularly in regard to our undeveloped natural gas potential,” Mr Woods told The Australian.

Mr Woods said the ASX-listed oil and gas producer was seeking approval to drill offshore in Victoria, which – if successful and developed – could unlock much-needed gas into the east coast market.

But he said there was uncertainty over whether the project would receive the necessary environmental approvals.

“Our abundant natural gas reserves can support the role of renewable energy, while mitigating cost-of-living pressures on all Australians,” he said.

“And with the Moomba Carbon Capture and Storage project online, we are showing that emissions from our gas production can be safely abated.”

As he urges Australians to vote for change as at the upcoming federal election, Peter Dutton – who is facing calls from Coalition MPs to pull out of Paris – said Mr Trump would deliver significant changes in the US.

“I think Australians can see that we live in an uncertain world and they want somebody with strength and character,” the Opposition Leader told 2SM radio.

“I think the American people have demonstrated that … they wanted a change of direction for their country and they’re certainly going to get it under Donald Trump.”

Mr Albanese said Mr Trump’s policies would “of course impact the globe” but Australia would not be making major policy changes, including on climate change.

“We are a sovereign nation and we’ll continue to take action on climate change, not just because we have an interest in meeting the challenge, we know that Australia’s particularly been adversely ­affected by extreme weather events,” Mr Albanese said.

“We know that we’re particularly vulnerable, but also because even if you didn’t accept the science of climate change, the economic opportunity that is there is enormous for us, not just to reduce emissions, but to grow our economy and grow jobs.”

Mr Albanese said it was in the interests of “both nations” for the trading relationship to continue without any further imposts.

“The United States has a trade surplus with Australia. It has had one since the Truman presidency. So it’s in the interests of the United States that this economic relationship and partnership continues,” the Prime Minister said.

“The United States is a major investor here in Australia, and we have significant relationships in economic terms, in defence and national security terms.”

Business Council of Australia chief executive Bran Black urged the Albanese government to adapt to the Trump administration’s deregulation agenda.

“That means we must, as a matter of urgency, drive a new pro-business agenda in Australia, including by slashing red tape and regulation, addressing our globally uncompetitive tax settings and restoring a sense of balance to our workplace laws,” Mr Black said.

“The last Trump administration heralded an outflow of capital from Australia to the US. If we don’t act now to get more competitive, we may well lose out again.”

Australian Industry Group chief executive Innes Willox said the policies of the US presidential administration “shape much of our economy and outlook”.

“We cannot ignore these changes but have to quickly position ourselves to deal with them,” Mr Willox said.

“Our objective must be to have a strong industrial base, a diversified economy, more productive jobs, and to ensure that Australia is an attractive investment destination.”