The US will consider re-entering the Agreement after “negotiating a new deal” which is more “fair” to the US. It is unclear what is “unfair” about the Paris Agreement, as the Agreement itself does not set any specific goals for the US or any other country. Click below the fold for more details of the Agreement and analysis of this decision.
Details of the Agreement
The Paris Climate Agreement was reached at the 21st annual “Conference of Parties,” the United Nations Climate Change Conference held in Paris in 2015. It was hailed as a big success because it was the first time all major polluters had agreed on a single goal – to limit global warming to “well below 2ºC.”
Under the Paris Agreement, all 197 signatory countries can, and 147 have, set their own “Nationally Determined Contributions” to reach the goal of “well below 2ºC.” You can read the United States’ here.
The Agreement did attract criticism. Some thought it too weak – while the goal is strong, there are no specific mechanisms which all countries agreed to in order to reach that goal, and no enforcement mechanisms for countries which do not pull their weight. But supporters of the agreement consider this one of its strengths.
Previous agreements offered more of a one-size-fits-all strategy, and as a result, advanced economies and developing countries had a difficult time both considering these agreements fair. The main sticking point is that developed countries always felt they were being unfairly punished for having large economies already, and developing countries felt they were having their growth hampered by not being able to pollute without consequence like advanced economies had already done on their path towards development.
This is why the Paris Agreement was ratified by so many countries, including, importantly, the three largest countries and three largest polluters on Earth – the US, China and India. Because, unlike previous agreements, it specifically does not require different goals of different countries.
As a result, the Agreement has been signed by every country in the world except for Nicaragua and Syria. Nicaragua stated that their reasoning is because the Agreement is not strong enough, and Syria did not join because they are currently in the middle of a civil war which has drawn much international criticism to their leader, Bashar al-Assad.
The United States now joins those two countries in removing itself from the Agreement. The US’ reasoning, though, is unique: it seems that the leadership of the US would rather bow to industry pressure, misunderstand the agreement (or at least claim to), and work to harm and isolate the US economy than remain engaged with the international community.
Oil Industry Influence on the decision
Some state that the Agreement is not fair to the US, requiring more of the US than of other countries, as industry-spokesman-oops-I-meant-EPA-head-who-can-tell-anymore? Scott Pruitt recently claimed. This sentiment was echoed in today’s announcement. But these talking points are stale and inaccurate, based on previous agreements which did have different requirements for each country, and not on the actual terms of the Paris Agreement.
It’s clear that oil money had an influence on this decision. One influence came in the form of a letter by 22 Republican senators, who have received a combined $10 million from oil companies, urging the US to pull out of the Agreement. Also, in today’s announcement, Mr. Trump cited one study for various forecasts of the costs of keeping US carbon emissions low. The source of the study was NERA Economic Consulting and it was sponsored by the American Council for Capital Formation and the Institute from 21st Century Energy, both of which are industry groups focused on oil production.
Many other studies which are not sponsored by polluters show otherwise, such as this International Monetary Fund working paper which claims that merely pricing carbon properly would lead to a 3.5% increase in global GDP, or this report from the International Renewable Energy Agency which claims that world economies will benefit to the tune of $19 trillion from the implementation of the Paris Agreement.
Mr. Trump cited several ways that he considers the Agreement to be “unfair” to the US. One specific complaint brought up in today’s announcement was that “India will be allowed to double their coal usage by 2020.” But in reading through India’s “Nationally Determined Contribution” to the Paris Agreement, no such criteria exists. In fact, it states that India recently quadrupled their tax on coal in order to fund clean energy projects.
Another complaint cited is that “China and India can do anything they want for 13 years.” This is not true, as the Nationally Determined Contributions for those countries show goals as early as 2018 for India and 2020 for China, just 1 and 3 years away respectively. Both also outline current measures the countries are already taking to meet the Agreement.
Of particular interest to Mr. Trump’s fairness complaints was the existence of the UN’s “Green Climate Fund” to help developing countries meet climate goals without hampering their developing economies, and perhaps to also produce returns on those investments for investors in developed countries. This fund was founded in 2010, five years before the Paris Agreement. The US has so far voluntarily disbursed $1 billion to the fund – which amounts to approximately three dollars per American. This $1 billion was not a requirement of the Paris Agreement.
So it is apparent that the leadership of the US does not understand the agreement that they just pulled out of, nor do they understand the public’s support for it. The reasoning for this announcement was to “put America first” and to respond to the apparent desire of the American people to pull out of the Agreement. But as stated above, Americans support the Agreement by a huge margin, with majority support in every state and 5:1 support nationwide.
Harming the US Economy
The fallout from drawing out of this agreement will likely be bad the US economy long-term. By withdrawing from an agreement that the entire world has agreed on, the US will alienate itself from the global economy, in which it is the world’s second-largest exporter with yearly exports worth $1.38 trillion. If the US refuses to play by the same fair rules as everyone else, it’s likely that other countries will add import tariffs to US goods, as France has recently considered. And given that the future is coming and the world will transition to sustainable energy regardless, this announcement will harm the US’ ability to lead the world into that future. Which is what led one of the people leading the US into that future, Elon Musk, to announce yesterday that he will stop advising Mr. Trump if he pulls the US out of the Agreement. (*Update below)
The Path Forward
Happily, several entities within the US have announced that they will continue their work to protect the environment and improve the US economy regardless of the federal government’s decision today. New York mayor Bill de Blasio pledged that his city will continue to lead efforts to reduce emissions, and California, the 6th largest economy in the world, has repeatedly shown that they are willing to do the same. Many other local governments worldwide and within the US have pledged the same. Even ExxonMobil’s shareholders voted yesterday to force the company to fully account for the impact climate change will have on their business.
Today’s announcement did include one shred of hope for the future of the US economy. Mr. Trump, in typical fashion, claimed that he will “renegotiate” the Agreement, “to get a better deal” for America. It is unclear what exactly he would plan to renegotiate, considering the agreement, as mentioned above, merely states that all countries will do their best to keep the world “well below 2ºC.” Perhaps this means that he will revise the Nationally Determined Contribution of the US which he can do unilaterally, or that he will modify the United States’ contribution to the UN Green Climate Fund.
If this is what it takes for him to remain in the Agreement as the people of the US desire, to continue to work to meet the 2ºC goal of the Agreement, and to claim victory in his negotiations despite only minor changes to things that he could already change anyway, then I suppose we can all just roll our eyes at the reality show theater of today’s announcement and hope that we can continue to move the country forward despite these theatrics.
*Update: The response has been swift and negative from the political and business communities. Elon Musk has confirmed that he is leaving Mr. Trump’s councils:
Disney CEO Robert Iger has also announced his resignation from the council:
And Apple CEO Tim Cook sent a letter to employees stating Apple’s opposition to the move and commitment to the environment.
California Governor Jerry Brown, and Lieutenant Governor Gavin Newsom each released statements supporting the Agreement and pledging California’s cooperation with the international community in implementing it; and the governors of California, New York and Washington have formed the “United States Climate Alliance” and have invited other states to join in upholding the Paris Agreement. 68 “Climate Mayors” have joined a similar pact. New York Governor Cuomo issued an Executive Order directing all departments within his state to submit plans to reduce their carbon emissions significantly. The governors of Massachusetts, Oregon, Colorado, Hawaii, Connecticut, Virginia, Ohio and Rhode Island have all proclaimed continued support for the Agreement. French President Emmanuel Macron has invited American engineers to come to France to work on renewable energy technologies, with the goal of “making the planet great again.” President Obama has also released a statement condemning Mr. Trump’s announcement today.