Trump Climate Move Undermines US Industry, Exporters, Leadership - Global Trade Magazine
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  June 2nd, 2017 | Written by

Trump Climate Move Undermines US Industry, Exporters, Leadership

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  • Entrpreneur Elon Musk withdrew from president’s business advisory council after Trump withdrew from Paris agreement.
  • WSJ: Withdrawing is in America’s economic interest and won’t matter much to the climate.
  • The Paris agreement represents a mechanism to encourage and coordinate action to address global climate change.
  • US leadership in world may be the biggest casualty of Trump's decision to withdraw from Paris agreement.

President Donald Trump took the United States out of the Paris climate accord yesterday, to nearly unanimous condemnation from the US business community, policy experts, and academics. Executives from energy and industrial companies like Exxon Mobil, ConocoPhillips, and Dow Chemical and high-tech companies like Google, Facebook, Microsoft, Intel, and Apple all blasted the move. Tesla CEO Elon Musk, who also backs SpaceX and Hyperloop, withdrew from the president’s business advisory council after hearing the news.

To be fair, opposition to the move was not universal. The Wall Street Journal editorial page wrote, “The reality is that withdrawing is in America’s economic interest and won’t matter much to the climate.” And the conservative Heritage Foundation backed Trump’s move, with energy and environment expert Nick Loris saying, “Paris was the open door for egregious regulation, cronyism, and government spending that would have been as disastrous for the American economy as it is proving to be for those in Europe.”

In his remarks announcing the withdrawal, the president cited a much-debunked study from National Economic Research Associates that the Paris agreement could cost the US 2.7 million jobs by 2025.

Most experts disagree with these assessments, saying that Trump has jeopardized the development of a potentially lucrative green economy, in which US innovators and manufacturers could have exported billions in solar, wind, and other renewable technologies to overseas markets, and created millions of jobs.

It’s difficult to say what the future holds for the climate goals set forth in the Paris agreement. The European Union and China have vowed to press on. Even in the United States, greenhouse has emissions could be reduced thanks to the efforts of state and local governments, as well as private concerns. What is missing most from that optimistic scenario is US credibility and leadership in the world.

Negotiations on the Paris Agreement were concluded at the 21st Conference of Parties of the UN Framework Convention on Climate Change in December 2015, and entered into force in October 2016. The agreement brought together nearly all the nations on the planet: it has been signed by 195 parties and ratified by 144.

Former President Barrack Obama was one of the leaders in the effort to reach the agreement, which included non-binding goals that each country was to develop for itself to reduce greenhouse gas emissions. The US, under Obama, set a goal of reducing emissions by 26 percent to 28 below 2005 levels by 2025.

The Paris agreement represents a mechanism to encourage and coordinate action to address global climate change. There are no penalties for failing to meet a nationally determined pledges but did include a system of consultation to help countries find strategies to improve their performance. More than that, by including almost the entire planet in the framework, it created a global market for green energy products, services, and solutions.

Trump campaigned on pulling out of Paris because, he said, the agreement was a bad deal for the US and that the requirement to reduce US emissions was not in US economic interests. Since taking office, Trump has argued the deal is unfair because other large polluters, such as China and India, do not have to do as much as the US and that the the Obama administration’s targets would burden US industry and harm competitiveness.

Bob Keefe, executive director of E2 (Environmental Entrepreneurs), a group of business owners and investors, adamantly disagrees. “Pulling out of the Paris agreement is bad for business, plain and simple,” he said.

According to Keefe, Trump’s withdrawal will transfer clean energy opportunities to China and Germany, hurting US companies and the three million Americans who work in green energy sectors; exclude US companies from $19 trillion in global clean energy opportunities; and result in possible carbon tariffs on US goods.

“President Trump is ceding American leadership and sending a message to clean energy investors to look elsewhere for opportunities,” Keefe added. “It will inflict real financial pain on millions of American workers who earn their paychecks every day in the clean energy and clean transportation sectors. Going back on America’s promises to the world isn’t how you make America first.”

“Withdrawing the United States from the Paris agreement is an abdication of this country’s responsibility to fight the climate crisis and to capitalize on the significant job-creating opportunities in a clean economy,” said Kim Glas, executive director of the BlueGreen Alliance, a coalition of environmental groups and labor unions. “The United States should lead the world in driving the significant economic growth and job creation that comes from designing, manufacturing, and installing the clean energy technologies and infrastructure required to reduce the pollution that is driving climate change.”

The US private sector and state and local governments, could continue the inexorable shift to renewable energy, but not with the same effect as it would be with support at the national level. “The decision to withdraw from the Paris accords cedes to other nations the full opportunities that the green economy offers,” said David Lodge, director of the Atkinson Center for a Sustainable Future at Cornell University.

State and local governments, from California to New York City to Pittsburgh, have all already announced they will abide by the Paris agreement. California, the sixth-largest economy in the world, tightened its emissions standards for vehicles after Trump moved to loosen national emissions standards for cars and trucks, and twelve other states following suit. California has established cap-and-trade programs to limit carbon emissions and is working with China to implement the same policy. California has also signed climate accords with Canada and Mexico.

But states and localities will likely be less effective in implementing Paris’ policies, according to Roger-Mark De Souza, an environmental expert at the Wilson Center. “Many of the stipulations in the agreement further US strategic interests and cities and states will be hard pressed to fully carry out the diplomatic dimensions that the agreement brings with it,” he noted. “Many US states and cities are centers of innovation, resilience, and prosperity. Those goals will continue as they work to meet the goals, aspiration and logical objectives under the Paris agreement, but it will be harder for them to do so without overall US government support.”

At the national level, many contend that the president’s decision to withdraw from Paris will make it more difficult for the US to work with its friends and allies on many foreign policy and national security issues. “This decision will make it more difficult for our companies to work in many countries,” said Richard Morningstar, chairman of the Atlantic Council’s Global Energy Center.

The EU and China are pressing on, with leaders meeting today in Brussels, and vowing to fully implement the Paris accord. The US relationship with Europe may be another casualty of Trump’s decision to withdraw from Paris, as is US leadership in world globally.

“A lack of US government support for the Paris climate agreement will mean that the United States will further isolate itself from international collaboration and cooperation on multiple fronts,” said De Souza. “It will affect US security, the provision of jobs, US business operations, and US diplomatic efforts. The agreement, because it has a broad basis of support, will continue with or without the United States.”


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