Former prime minister Malcolm Turnbull is hopeful the US Inflation Reduction Act will be able to weather a second Trump administration given the powerful momentum now behind the clean energy transition.
But he has warned that Mr Trump’s track record means there is every possibility that the billionaire and former US president will do even more of “what he says on the campaign trail” in government.
The billionaire and former US president is reportedly considering a radical overhaul of US climate and energy policy that is expected to include a significant curtailing of the IRA to maximise fossil fuel production.
Mr Trump, who has previously described the IRA as the “biggest tax hike in history”, in December said he would cancel “all climate reparation payments… immediately” and “claw back” any payments made by the Biden administration.
Speaking at the Clean Energy Summit in Sydney, Mr Turnbull said that Washington remains confident that the US$369 billion (A$560 billion) in tax breaks and subsidies for clean energy will survive, at least in part, despite Mr Trump’s opposition.
“People in Washington are, I think, remarkably optimistic about how much of the IRA will survive. But [the] experience of Trump is what he says on the campaign trail, he does even more of when he’s in government,” he said on Thursday.
“A lot of people in 2016, when he was elected the first time, said, ‘oh, well, all that crazy stuff he said on the hustings, he’ll be very conventional when he gets into the White House’. Not so. So, we shouldn’t kid ourselves this time if he does get back.
“This is a guy who one of his slogans is ‘drill baby drill’… so, I think it will be a real battle and a real setback.
“But I hope, and this is what a lot of people in America feel or believe, that there is enough momentum in the shift to clean energy to ensure that it can weather a Trump presidency.”
“But… America will cease being an advocate for clean energy, just like we had during his first presidency, so it will be up to other countries to take up that leadership.”
In Australia, Treasury has spent most of the last year preparing a plan to make the Albanese government’s green energy superpower ambition a reality, and is understood to be considering a response to the IRA.
Last month, Prime Minister Anthony Albanese gave the strongest signal yet that Australia’s response to the IRA could arrive in the upcoming Budget. It has been positioned as a multi-billion-dollar package of subsidies and co-investment for renewables.
“We don’t have to go dollar-for-dollar in our spending. But we can go toe-to-toe on the quality and impact of our policies,” Mr Albanese said.
