Trump Dumps Paris Climate Accord with a Toll on Diplomacy and the Economy

To convince skeptics that climate change is real one option is to turn to global insurance companies reporting on the actual and projected costs of man-made climate change. The other, even before looking at scientific data, is to see how some islands in the Pacific or cities like Jakarta make plans as they begin to sink into the ocean, how severe floods are now in South America, how much ice already melted away from the world’s supplies of fresh water — like Greenland, how costly are now tornados in Europe and droughts in California — not to speak of the dramatic droughts across Africa, which already displaced millions of people.

U.S. President Donald Trump refers to amounts of temperature change as he announces his decision that the United States will withdraw from the landmark Paris Climate Agreement. REUTERS/Kevin Lamarque
U.S. President Donald Trump refers to amounts of temperature change as he announces his decision that the United States will withdraw from the landmark Paris Climate Agreement. REUTERS/Kevin Lamarque

The Paris 2015 Cop21 accord, ratified by 195 countries, was intended to help stop or at least mitigate all this by slowing the rise of the average temperature before it passes a threshold considered by scientists an irreversible point with a likely permanent and profound impact on human life. That can happen by limiting the increase of global average temperature to below 2°C/35.6F above pre-industrial levels, pursuing efforts to limit it to 1.5°C/34.7F.

Rather than imposing caps on greenhouse gases emissions, the Paris accord established a framework under which each participant determined its own emissions targets and planned how to reach them. What will count over time is therefore the level of ambition of each country. To be sure, the ambition level of all national contributions is not yet sufficient to achieve the goal of limiting the increase of global temperature to 2°C.

After decades of discussions, the importance of the accord lies with countries recognizing that climate change is real and massive threat that requires the whole world to act, and the more so those countries that most contributed historically to the current levels of carbon in the atmosphere. These are the US with almost 30% and the EU 28 bloc with over 17%. The main contributors to emissions are now China-30%, US-15%, EU-9% and India-7%.

Taking into account that emissions reductions are not binding, and that by clauses in the agreement it will take the US 3 years to pull out — unless it pulled out from the UN Framework Convention treaty, which negotiated the Paris Agreement — what are the likely effects of Mr. Trump’s decision?

“The current global reductions are not enough [to meet the 2°C/35.6F target]," said professor Niklas Höhne of the NewClimate Institute, who helped draft the UN IPCC reports since 1995, speaking to the press on the sidelines of a UN climate meeting in Bonn. "We are now at around 2.8°, which is far from 1.5. There is a bright side, however. One factor is the much faster pace [of innovation] in renewable energies." The other is that climate policies in India and China are on a faster track than anticipated, and this could more than outweigh slower emissions reductions in the US (together the three countries make up almost half of the world's emissions).

 China is not anymore a laggard in the past in dealing with climate change, after it has been struggling for years now with polluted air and water. Pursuing low-carbon growth, the government has been pouring resources and plans to spend over $361 billion by 2020 in renewables — that is 1/10 of the US total annual federal and state expenditures.

 “It’s not what China needs to do, or is pushed to do: quite the contrary, it’s what China wants to do: protect its economy, be competitive in the future,” said Christiana Figueres, a top former UN climate official in a press conference.

China’s coal consumption declined in the last three running years as it canceled plans to build fossil-based power plants and decommissioned existing coal power plants, something believed impossible just a few years ago. Among the reasons: the price of energy from renewable sources dropped drastically.

More often than not, said Mr. Höhne, "building wind parks and solar plants costs less than coal plants, so they get two outs with one pitch." According to Climate Analytics data, green energy plants are being built at a much faster rate than coal-fired plants. China recently flipped the switch on of the world’s biggest floating solar farm, and earlier this year, that of the world’s biggest solar farm.

Quickly developing India produces about 4.5% of the world's emissions, but is considering plans to stop building new coal-fired power plants after 2022, according to an Allianz report.

If India fully implemented the recently-announced policies, its carbon emissions over the next decade would slow their increase significantly bringing India closer to its Paris goal of producing 40% of electricity with non-fossil fuel sources by 2030.

China and India are set to overachieve their Paris Agreement pledges. This added to fact the market was already orienting the US toward lower emissions, and state laws could replace federal regulations as they were repealed, could outweigh the potentially negative effects from the Trump Administration’s rollbacks in the USA by 2030, according to Mr. Höhne,

Mr. Trump's decision was based on “factually incorrect” data  also as climate change finance is concerned. True, many developing poor countries committed to a low-carbon development with the understanding that they would be helped financially. However the $100 billion pledged to developing countries are funds to be "mobilized" by public money by leveraging much larger pools of private sector investments. In 2016, the combined flows from all developed countries added to already $66.8 billion.

No wonder China, which "will do what fit its interests and capability,” as Jia Qingguo, a foreign relations expert from Peking University, put it, recognized that the transition to clean energy is the biggest market opportunity in this century, and is aiming at the benefits of being a world leader in tackling climate change.

 Mr. Trump withdrawal from the accord could be detrimental if massive support to the coal, oil and automobile industries would halt clean energy innovation. In the oil industry this could happen if an oil glut pressured farther the price of oil making extraordinary R&D investments less likely.

 “America, wake up. You aren’t going to get gas guzzlers no matter what Donald Trump says,” said California governor Jerry Brown. “You aren’t going to get coal to increase, no matter what Donald Trump says in West Virginia. We have to get with the program. And the program is renewable energy, decarbonizing, and research and development in a way that makes America more sustainable, not less.”

As to the car industry, the reactions of a good part of the corporate executives community lead to believe that they will do all they can to continue researching and using the clean energy technologies that will allow them to compete with European and Asian car makers.

 The one area where the impact of dumping the Paris deal is already being felt is international relations and consequently trade. After frustrating conversations with Mr. Trump in May, China and the EU are now the de facto the leaders on global climate policy. Their diplomacies, along with the Indian and the Canadian ones are moving frantically.

“The EU could replace the USA and take the economic chances,” reads a study by German insurer Allianz. “And Germany holds also the current G20 presidency.”

Mr. Macron spoke with Chinese president  Xi Jinping earlier in May about their countries “protecting the achievements of global governance, including the Paris agreement.” Reuters reported last Friday on a joint declaration on climate and energy policy and the Paris agreement being prepared by China and EU officials.

Indian president Narendra Modi just spoke in Paris of the climate deal as a shared legacy of the world after announcing in Germany a new cooperation between the two countries on climate change.

Chancellor Angela Merkel also met on Wednesday with Chinese Prime Minister Li Keqiang in Berlin, while German Foreign Minister Sigmar Gabriel traveled to Beijing to sign a joint commitment for free trade.

Mr. Trump pulling out of the Climate deal sparked a renewed urgency to tackle climate change and related innovation and trade among world leaders but also in the US. Gov. Brown, for example, is visiting China in the next few weeks.

All of this and a poll showing that 69% of US citizens supported the Paris agreement is very far, alas, from guaranteeing a future turning point to climate change, but it shows nonetheless the saving planet Earth is not anymore the slogan of a minority. Whereas a minority, on the other hand, could be considered the group Mr. Trump's US just joined: the countries that did not sign the Paris deal. Syria, because it is at war, Nicaragua, because it is on track to soon generate 80% of its energy from renewables.


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