For decades, the global economy prospered through open markets, interconnected supply chains, and liberalised trade. And yet, geopolitical tensions are pushing governments to build sustainable economies that are self-sufficient and resilient instead. Once motivated predominantly by environmental protection, the "green transition" towards carbon-neutrality increasingly prioritises economic security. Climate policy now manifests as strategic supply chain management and industrial policy to develop critical domestic green industries. With such efforts coming at the expense of the interconnected trade order, Australia is uniquely exposed as a nation whose prosperity depends on exporting carbon-intensive natural resources. At the same time, as a resource and energy powerhouse, Australia is uniquely positioned to become a foundational pillar of this new global economic order.
Seeking Security in Instability
From the 1970s,  has been characterised by economic and trade liberalisation, reducing tariffs and integrating global value chains. Spurred on by multilateral institutions and geopolitical developments such as the fall of the Iron Curtain, surging international trade promoted countries’ industrial specialisation, efficiency, and . However, the Global Financial Crisis  economic activity and openness into the 2010s, before the COVID-19 crisis  the vulnerabilities of interconnected supply chains.
Concerns have only been validated by continued geopolitical instability, including  in Ukraine and the Middle East, and economic coercion through  from the United States (US) and rare earths  from China. Despite the theoretical economic benefits of liberalised global trade,  are increasingly driving countries to retreat from the open economy of the 1990s, and pursue economic security through industrial policy and strategic supply chains.
Self-Sufficient Economies
Climate policy is a clear illustration of this. As the world , the rationale for a green transition has shifted from purely environmental to geoeconomic strategy. For example, the European Union's (EU)  targets EU net-zero technology manufacturing through expedited approvals and subsidies, while the  (CBAM) imposes tariffs on imported carbon-intensive goods. While these measures pursue ambitious environmental objectives, the focus is on  in strategic industries,  of local producers that adhere to stricter regulations, and .
It also highlights the desire for  in particular, especially in the wake of the EU’s dependence on Russian fuel amid the invasion of Ukraine. As the Iran conflict stymies fossil fuel supply through the Strait of Hormuz, it is the countries with domestic renewables capacity, such as Ìý´Ç°ù , that are the best insulated, while those dependent on  are exposed to energy insecurity and rising prices.
In addition, climate policy also increasingly involves strengthening partnerships and "", such as  secure and sustainable supply chains for strategically important goods with its political allies in the G7. Even the US–whose political agenda –is engaging with  such as Australia on critical minerals, in addition to substantial domestic  into green technology. Self-sufficient green economies are no longer simply a moral imperative, but a  amid increasing geopolitical risk.
Future Made in Australia
The alignment of environmental targets with geoeconomic security is a win for sustainability. However, as geopolitical tensions appear set to increase, there will likely be continued efforts globally to protect domestic industries and tighten value chains. As a nation dependent on international trade of carbon-intensive exports, Australia is uniquely exposed to "". And yet, we are also uniquely positioned to benefit.
 in renewable energy generation technology will allow Australia to leverage its natural wind and solar  into low-cost energy to achieve , and then  at a comparative advantage. Similarly, as the "" cascades the EU's climate standards , domestic green industries will ensure Australian exports not only , but capture value beyond the current "dig-and-ship" model. For example, while Australia largely exports iron ore as a raw commodity, processing domestically would allow for the  instead–a much higher value industrial material.
The situation regarding critical minerals is similar: Australia is a  of raw critical minerals, with developed  mining and export capabilities. However,  in downstream processing and manufacturing would place more of the value chain within Australia's domestic economy, and strengthen economic security by diversifying processing capability away from China, where it is . Downstream capabilities would facilitate Australia becoming further embedded within supply chains with allies, including , the , and most recently with . It also allows for exploring opportunities for regional , given the region's existing downstream capability and demand. Viewed from this lens, Australia's green transition presents an opportunity to bolster domestic self-sufficiency while integrating into new international supply chains as a partner of choice.
Ultimately, as geopolitical rivalry intensifies and the green transition accelerates, governments are increasingly prioritising economic security and sustainability over the principles of liberalised trade. Climate policy centres on building domestic capability and supply chain security to develop resilient economies in a decarbonised world. The result is not the end of liberal trade, but certainly a strategic shift. For trade-dependent economies like Australia, the challenge is finding our place, and Australia’s natural gifts present a unique opportunity to become a resource and green energy superpower.
was originally produced as part of the Fellowship Program. YAIA is Australia’s leading youth-led organisation providing opportunities for young people to engage in international affairs.Â
Mikey Glover is the 2026 Climate and Environment Fellow for Young Australians in International Affairs (YAIA). The 2026 Climate and Environment Fellow is sponsored by the Sydney Environment Institute.
Disclaimer:Â The views and opinions expressed in this article are those of the author and do not necessarily reflect those of Young Australians in International Affairs or the Sydney Environment Institute. All content is original, and no plagiarism has been used in the preparation of this article.
Header image: Benoît Deschasaux via Unsplash.