During the initial days of the World Economic Forum in Davos, political figures, civil society representatives, and business leaders were anxiously awaiting President Donald Trump’s speech at the event, particularly for any indication he might fulfill his pledge to annex Greenland.
While President Trump’s address occurred, it wasn’t the most impactful event of the week-long gathering. Instead, the most notable development might have originated the previous day from Canada, the U.S.’s northern ally, now seen as a rival. In a speech poised to be historically significant, Canadian Prime Minister Mark Carney articulated a “rupture” in global governance, urging middle powers such as Canada to confront aggressive actors. He spoke of new “coalitions of the willing” forming to tackle issues based on shared interests and values, diverging from the past where all nations typically followed cues from the U.S. Carney stated, “We’re pursuing variable geometry, in other words,” meaning “different coalitions for different issues based on common values and interests.”
This transformation is expected to influence all facets of the economy, with significant implications for both energy and climate.
The clearest consequence is the differing strategies concerning energy technologies. At Davos, Trump Administration representatives promoted fossil fuels while criticizing renewables. Energy Secretary Chris Wright remarked during a fireside chat that global investment in renewable energy “Economically, it’s been a failure.” This position was unsurprising to anyone familiar with Trump’s energy policies, yet the stark contrast with global perspectives at Davos was notable.
Ursula Von Der Leyen, President of the European Commission, declared that the European Union intends to intensify its focus on nuclear and renewable energy sources to liberate the bloc from “manipulation” by other nations—a category that could now plausibly encompass the U.S. She stated in a plenary session, “Homegrown, reliable, resilient, and cheaper energy will drive our economic growth and secure our independence.”
French President Emmanuel Macron indicated his openness to increased Chinese investment in crucial industries, likely including renewable energy, where China holds a significant role. The week prior to Davos, Carney visited China and consented to virtually remove Canada’s substantial tariffs on Chinese electric vehicles, thereby allowing China’s affordable and popular automobiles into Canada, to the disadvantage of U.S. car manufacturers.
Nevertheless, the U.S. finds support in its efforts to solidify the role of fossil fuels. The CEO of Saudi Aramco, Saudi Arabia’s national oil company, projected ongoing demand for oil while advocating to Davos leaders for the enduring future of his nation’s primary export. (It should be noted that Saudi Aramco is also allocating resources to renewable energy.)
While climate change wasn’t the primary focus for senior government officials this week, as urgent geopolitical matters dominated discussions, it’s clear how Carney’s “coalition of the willing” strategy could be applied to reducing global emissions once leaders depart Davos and eventually address the issue. Notably, prior to his premiership, Carney advocated for “carbon clubs,” where nations would collaborate on emissions reductions, imposing trade sanctions on non-participating countries. This year, the EU’s border carbon adjustment mechanism, which levies taxes on emissions from certain imported goods, became active. Other nations, such as Brazil, are exploring comparable measures.
The reaction among executives at Davos to Trump’s energy position was varied. Privately, many asserted their commitment to sustainability efforts would persist irrespective of the Trump Administration, even while refraining from public discussion. They contend that the long-term trend remains evident. However, it is undeniable that this emerging global shift at minimum complicates the management of energy and climate initiatives.
Once this period of turbulent and swift transformation concludes, the global climate framework is expected to appear significantly altered, characterized by new alliances and international ties. The U.S. might not be entirely isolated, but it could discover that maintaining a distinct position incurs consequences.
To get this story in your inbox, subscribe to the TIME CO2 Leadership Report newsletter .
This story is supported by a partnership with and Journalism Funding Partners. TIME is solely responsible for the content.
