Q. In an era of tariffs, can sustainability be sustained?
A. There is great uncertainty as of now on the tariffs the United States plans to impose. No one knows their full nature, how others will respond or how long this situation will persist. Yet, despite all that, there are strong pro-environment trends worldwide — these will continue, particularly in the energy sector which will keep moving towards renewables. That change is not driven by geopolitics or ideology but technology and economics. In the last few years, the world has witnessed a clean energy revolution.
Thiswill only grow, given the economics particularly of solar and wind power and battery storage technologies. Their falling price trends have been very dramatic over the last 15 years. The only impediment was storage — this is being solved rapidly now, partly through the shift towards electric vehicles (EVs), China’s success here pushing other auto-making countries to the EV fold. There will soon be a second-hand market for batteries which could also be used in households, small industrial units, etc. Other interesting trends include AI which is a very energy-hungry industry. Many big players in this sector — who also have their own net zero targets — are looking to clean energy, including nuclear power.
Typically, nuclear energy is a long-term commitment, it’s expensive and carries certain risks but there is considerable progress in small modular reactors now. Importantly, in the US as well, even in red states where Republicans prevail and Donald Trump’s ‘Drill, baby, drill’ message resonates, there has been a massive transition to renewables — consider Texas, where Elon Musk’s Megapack battery factories are located. In the UK, over 50% of national energy needs last year were supplied by solar and wind power. Germany has made faster progress to-wards its net zero goals than the country itself imagined — this has come largely from solar and wind. China and India are also making massive strides in this area.
Q. There is concern about energy security though, which began well before Donald Trump with the Ukraine crisis — can renewables address that?
A. This is in fact another driver pushing countries towards renewables. China is moving to renewables to shore up its energy security, meet its enormous power needs cleanly and not depend on foreign sources which can be cut off amidst geopolitical tensions. This was also Joe Biden’s approach with the Inflation Reduction Act (IRA) which was meant to support and subsidise clean energy in the US and bring eventual independence from fossil fuels.Q. Is it fair to see the Trump bloc on one side — and most other countries aligning environmental concerns with economic and energy needs now?
A. The Trump regime and its rhetoric seem completely out of sync with the rest of the world. Europe remains very committed to its Paris Agreement targets — we see the same vis-a-vis the other G7 countries, with the exception of the US. Developing economies are also moving to clean energy, both for security as well as environmental reasons, including efforts to reduce pollution and lower the dam-aging consequences fossil fuels pose to social well-being. Most countries are very rational about the need to transition their pace will depend now on technological progress, affordability and issues of climate justice. Our view of sustainability can get distorted because the Trump effect is so loud — but the facts show a continuing global trend towards the energy transition, purely because of the economics involved. It is so much more affordable to derive energy from solar and wind today — if nuclear enters the framework, that adds another key dimension.
Also consider the role of AI here — given the intense competition in this space, with every country of consequence developing its own program, we are moving closer to the emergence of artificial general intelligence (AGI). This will be a gamechanger with systems improving exponentially — this technology can then be turned towards climate issues, energy change, etc. Thus, there are emergent technological breakthroughs which are not specifically about energy but which will be used to improve these systems. Interestingly, the American space is also subject to change. Some environmen-tal commitments in corporate America are being lowered now due to the Trump effect — but that’s a very American phenomenon. Even there, while many companies may be talking less about sustainability, that doesn’t mean they are doing less about it. Strategically, it is in their interest to move towards this as it makes economic sense. Now, with Trump’s tariffs causing turmoil, there is growing criticism from Wall Street — tariffs will negatively impact US commercial operations, supply chains and consumers. There will be a limit to how much American firms will bear. We could see the sustainability of Trump’s tariff regime ending up under question.
Views expressed are personal