A Brave New World – but will Australian Business Meet the New US Climate Change Policy Mandates?
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US President-elect, Joe Biden is putting climate change back on the global agenda. He plans to lead the US out of economic misery via a renewable energy-led recovery and assume the mantle of global watchdog for countries who don’t live up to their commitments under the Paris Agreement.
Linking climate change to the economy
He says, ‘there is no greater challenge facing the world’ and he wants to spearhead the global response to the climate emergency, recognising the connection between a healthy environment and a thriving economy. The Biden administration’s response to climate change would see the United States re-enter the Paris Agreement and lead a major diplomatic push for countries to increase their climate action targets.
In his Clean Energy & Environmental Justice plan, Biden has directly linked favourable trading partnerships with the US, to environmental performance. The question is, does Australia have the capacity to adapt at speed, to meet the standards set by the new US administration, when we are a fossil fuel country?
Biden means business when it comes to climate action and trade
Biden says climate change will be integrated into foreign policy, national security and trade. It follows that he intends to pressure world leaders to be more ‘ambitious’ in their efforts to address climate change. The US will encourage every major country to increase their domestic climate targets and those who do not live up to their transparent commitments, will be subject to America’s economic leverage, that is; tough trade conditions.
Bad performers to be named and shamed
For those countries who don’t perform, Biden will introduce a new Global Climate Change Report to hold countries accountable for meeting or failing to meet their commitments under the Paris Agreement, and for other steps that contribute positively or undermine global climate solutions. This report will effectively name and shame poor performers.
Under the plan, Biden believes that a renewable energy-led economic recovery is good for jobs and the future of the planet. He wants the US to position as the global, renewable energy superpower and deems a clean energy future, an ‘opportunity’. Why can’t Australia, on a nation-wide scale, do the same?
Public companies will be placed under the TCFD blowtorch and required to disclose climate risks and greenhouse gas emissions in their operations and supply chains. Currently in Australia, it is not mandatory for companies to report on their emissions.
Biden wants the US to achieve a 100% clean energy economy and reach net-zero emissions by 2050. Of course, these ambitions take money and under the Biden stewardship, the US will make a historic investment of US$1.7trillion+ over ten years.
In stark contrast, Australia is not on track to achieve net-zero emissions by 2050. In fact, we are not even on track to meet our 26-28% reductions target by 2030, as we currently sit at approximately 528 Mt CO2-e, emissions – a mere 15% below our 2005 target.
No matter what side of politics your allegiance lies, the new US administration under Biden is putting climate change fairly and squarely on the global agenda alongside his plan for a clean energy revolution.
One solution at a time
For Australia, this means significant impacts on our trade, international standing and our ability to adapt and prosper under the weight of climate change impacts. It’s never been more important for companies to monitor, track, analyse and display their CO2 emissions, mitigate the risk of climate change impacts and transparently display their ESG position, including supply chain. Biden’s new direction on climate and renewables, might just be what Australia needs to lead our nation to a more resilient and prosperous future.