SYDNEY (BLOOMBERG) - As the leader of one of the few developed nations yet to commit to net-zero emissions, Australian Prime Minister Scott Morrison has just became even more isolated.
Mr Joe Biden's victory in the presidential election means the US will join a growing list of nations making the pledge, including some of Australia's biggest customers of fossil-fuel exports such as Japan, China and South Korea.
Mr Morrison, who once brandished a lump of coal in Parliament in support of the fuel, is also increasingly exposed at home as corporate capital piles into renewables and many Australians demand greater action to tackle climate change after a summer of deadly wildfires.
But emboldened by a come-from-behind election victory in 2019 that was helped by his support for mining jobs, and with his conservative government buoyed in opinion polls by his handling of the pandemic, Mr Morrison is showing no signs of turning - even as Australia remains one of the world's biggest per-capita carbon polluters.
"Australia will always set its policies based on Australia's interests," Mr Morrison told reporters on Monday (Nov 9) when asked whether President-elect Biden's commitment to steer the US toward zero emissions by 2050 would influence his energy policies.
Coal and gas exports together reap a quarter of Australia's export income, totalling about A$120 billion (S$118 billion) a year.
According to a University of New South Wales report published in July, that revenue comes at a high price - Australia is now the world's largest exporter of coal and gas, making it one of the biggest contributors to climate change through exported emissions.
"Biden's win means Australia is even more isolated on the world stage," said Ms Emma Herd, chief executive of the Investor Group on Climate Change, which represents investors with total funds under management of over A$2 trillion.
With a Biden White House, about 70 per cent of Australia's two-way trade will be with countries that have made net-zero commitments, she said.
According to the group, Australia risks missing out on at least A$43 billion in investment in renewables over the next five years if it fails to make the commitment.
Australia is seeking to prioritise what it calls low-emission technologies, including hydrogen, to reduce greenhouse gas pollution. Mired in the nation's first recession in almost 30 years, Mr Morrison has also proposed a "gas-led" economic recovery and is promoting cheap and reliable electricity generated from the fossil fuel as a means to boost manufacturing.
That hasn't won broad approval from business and environmental groups, which favour investment in renewables such as wind and solar and a market-based mechanism to charge big emitters for their carbon pollution.
Mr Biden is pledging to sign executive orders "on day one" to "ensure the US achieves a 100 per cent clean energy economy and reaches net-zero emissions no later than 2050".
That makes Australia even more of an "outlier" among rich, developed economies and Mr Morrison risks "backing the wrong technology" through his continued support of fossil fuels, said Mr Adair Turner, co-chair of London-based Energy Transitions Commission, which is promoting net-zero emissions by mid-century.
"Australia has been seen as disappointingly unambitious," he said.
Mr Morrison's support for the fuel may ultimately hurt him electorally, with surveys showing a majority of Australians believe global warming is a serious problem that governments need to address. The main opposition Labour party is committed to the net-zero target, and leader Anthony Albanese on Monday stressed Mr Biden's victory left Australia "isolated among our major trading partners when it comes to these issues."
But even if he wanted to, shifting his Liberal-National coalition's stance on emissions would be fraught with risk for Mr Morrison. His predecessor, Mr Malcolm Turnbull, was ousted by his own party colleagues in August 2018 and replaced by Mr Morrison after proposing stronger action to reduce greenhouse-gas emissions.
"We've got the same sort of right-wing populist politics as the US where issues of global warming and climate change, instead of being a matter of physics, have become values or identity issues," Mr Turnbull said in an interview.
Australia's position will become increasingly untenable, he said, because "all of our major trading partners are moving away from" fossil fuels and they realise "the world can't keep burning coal".