By Ahmad Ibrahim

Few would dispute that the USA remains the leading economy of the world. We saw how US decision on interest rate was closely watched. Changes in the Federal Reserve decision influence global business directions. In fact the impact on world currencies has been inevitable. The decline in Ringgit value in recent months was mainly attributed to the US interest rate movements. The economists know this. But as usual, politicians would distort the reasoning and blame the administration for political mileage. The man on the street, especially those with a poor understanding of the true dynamics of global finance, and there are many, gets unnecessarily stirred up Cases of such low economic literacy influencing elections have been common throughout the world. We saw how the GE15 was won by spreading the untruths about GST.

As the leading world power, the US influence is not just limited to the global economy. The world fight against climate change is also pivotal on the decisions by the US. Some attribute the slow progress of decisions made at COP meetings to the lack of US support. This became clear at COP 28 in Dubai when the move by climate activists to include the narrative to phase out fossil fuels was opposed. Friends of Sustainable Malaysia is hosting a conversation on 20th September to deliberate on the upcoming issues at COP 29 in Azerbaijan. Ms Meena Raman of the Third World Network will share her take on the expectations of civil society groups at COP 29.

Many must still remember the decision by the US to pull out of the Paris Agreement during the Trump presidency. That was also when funding of the US Environmental Protection Agency, EPA, was drastically cut. Less money was also available for climate research. Even the failure to make good the promised funding for climate actions can be traced back to the US. That is why the US Presidential election in November matters for the world. It can significant influence the global fight against climate change. The U.S. is one of the world’s largest economies and greenhouse gas emitters, so its policies on energy, the environment, and climate change have widespread implications. Different administration approach the climate policy differently. The Obama administration supported the Paris Agreement. In contrast, the Trump administration withdrew the U.S. from the Paris Agreement. The Biden administration rejoined the Paris Agreement and has prioritized climate action, aiming for net-zero emissions by 2050.

U.S. leadership or lack thereof on climate issues can sway international efforts. When the U.S. commits to ambitious climate goals, it often encourages other countries to do the same. Conversely, if the U.S. pulls back, it can undermine global climate initiatives. Congressional elections also play a role. A Congress with a majority that supports climate action is more likely to pass laws that fund renewable energy, regulate emissions, and support green technologies. Conversely, a Congress resistant to these efforts can stall progress. U.S. elections influence economic policies that affect climate change. Policies that promote renewable energy, electric vehicles, and energy efficiency can drive innovation and reduce emissions. On the other hand, policies that support fossil fuels or deregulate industries can increase carbon emissions.

The fight against climate change is heavily influenced by the U.S. political landscape, making elections crucial for determining the direction of climate policy both domestically and internationally. It is true what they say that when China sneezes the world catches cold. But when the US coughs, global temperature rise will surpass the 1.5 degrees C target agreed at the Paris Agreement. And the nearer the world moves towards a climate crisis. Malaysia, as a small economy by world standard, contributes only about 0.6% to global emission. But a world climate crisis will bring untold economic repercussions to our economy.

This is the reason why civil society groups are calling for more adaptation efforts by the country. This includes research to produce more climate resilient agriculture, design of more disaster proof housing, and technologies to reduce water and air pollution. The outcome at COP 29 is not expected to be different from Dubai. The US decision is crucial.

_{The author is a Professor and Associate Fellow, Ungku Aziz Centre for Development Studies, Universiti Malaya.}