By Mike Gerbis – CEO of The Delphi Group and Jessica Butts – Director, Policy Services at The Delphi Group
On June 1st, President Trump confirmed that he would withdraw the U.S. from the Paris Agreement. The agreement is the international climate accord signed by every country in the world, with the exception of Nicaragua (who didn’t sign on because they thought it should be more ambitious) and that beacon of virtue, Syria. The UN meeting where it was agreed to in December 2015 marked the largest ever meeting of world leaders. Kind of a big deal.
Trump made leaving the Paris Agreement a campaign promise. He appointed a climate change denier, Scott Pruitt, to head up the U.S. Environmental Protection Agency (EPA), which is tasked with administering policies relating to air, water and climate change. So his announcement last week wasn’t exactly out of the blue. But that didn’t make it any less disappointing.
What has been extremely heartening is the response. Condemnation was swift, both from other international leaders and many of Trump’s own constituents.
We have seen a redoubling of leadership from countless politicians, businesses and civil society actors in the days since the announcement. The only players to vocally back Trump’s decision have been a handful of US coal companies, far-right Republican lawmakers and lobby groups.
Many national leaders have been quick to reaffirm their commitment to the Paris Agreement and ‘troll’ Trump in their own ways – including France’s Macron, Germany’s Merkel and China’s Xi Jinping. Prime Minister Trudeau also threw his own shade, tweeting his disappointment that the U.S federal government has decided to withdraw from the Paris Agreement. Trudeau and Japan’s Shinzo Abe agreed to continue to push the U.S. on climate under the G7. Canada takes over the G7 Chair later this year.
Canada’s Foreign Affairs Minister Chrystia Freeland also made a speech this week rejecting Trump’s nationalist policies and breaking traditional U.S.-Canada relations. She confirmed the government’s intent to step up on the world stage on a host of issues, including climate change.
All of this ultimately serves to strengthen diplomatic ties amongst other international allies (both new and old) and, ironically, further entrenches America’s growing irrelevance on the international stage. As other major powers continue to shape the rules of the game under Paris, U.S. negotiators will no longer be at the table to protect their own interests.
Economically, nearly every other world leader recognizes the opportunities that have been left on the table if the U.S. is no longer a frontrunner in the race to clean energy. Many countries (not least of which China) now see an opportunity to “win” and stretch their competitive advantage over the giant innovator who’s taken a stumble.
Cases in point: Germany is already well ahead of the curve on wind power and will continue to innovate and drive new products. China’s lead on solar manufacturing will significantly ramp up. Canada is poised to invest in a broad-ranging clean technology agenda and is moving full steam ahead on a national carbon price. Innovation, investment and talent will shift from the U.S. to other competitive hotbeds around the world.
Other Levels of Government are Already Leading
In the words of Arnold Schwarzenegger (an architect of California’s progressive climate policies), 70% of emissions are controlled at state and local levels. Sub-national governments – including states, provinces and cities – are poised to carry the mantle of climate action forward with more tenacity and urgency than ever before. California, New York, Washington, British Columbia, Ontario, Quebec and others are excellent standard bearers.
We will continue to see ‘coalitions of the willing,’ like the newly formed U.S. Western Climate Initiative (WCI), Pacific Coast Collaborative, and Regional Greenhouse Gas Initiative (RGGI), evolve at the regional level regardless of what is (or isn’t) happening nationally.
Cities and local governments continue to work through initiatives like C40 and the Global Covenant of Mayors. Ironically, in defending his decision Trump said “I was elected to represent the citizens of Pittsburgh, not Paris”. Yet the Mayor of Pittsburgh is one of a myriad of subnational leaders who has vocally opposed the move.
There’s talk that sub-nationals are investigating whether they can take the U.S.’s spot at the international negotiating table. If the states that have recommitted themselves to Paris were to form their own country, it would be the world’s 5th largest economy and 12th largest population base.
By and Large, Business “Gets It”
Over 1,000 governors, mayors, businesses, investors and academic institutions have formed the U.S Climate Alliance to uphold the tenets of the Paris Agreement. Other public-private sector groups are coming together to fill the leadership vacuum, such as a diverse partnership headed up by Michael Bloomberg. Corporate powerhouses Elon Musk of Tesla and Bob Iger of Disney quit Trump’s economic advisory committee over the Paris decision.
The evolution of the financial community’s views on climate risk and investment opportunity has been both rapid and positive since the Paris Agreement was signed. Engagement has been further bolstered by the Financial Stability Board’s Task Force on Climate-Related Financial Disclosure, amongst other drivers. These trends are unlikely to be reversed, particularly as the impacts of climate change become harder to ignore.
Despite the strong climate change-denial rhetoric that at times dominates the U.S. discourse, several polls have found the majority of Americans support(ed) staying in the Paris Agreement. The data below from Yale’s Program on Climate Communication is particularly instructive in this respect.
However, when taken with all the other important issues of the day, climate change rarely cracks the top of voters’ lists. In a recent Gallup survey, only two percent of Americans listed the environment or pollution as the most important issue facing the country. Twenty-one percent cited economic issues as the most important – possibly, and erroneously, seen as separate and distinct from environment and climate issues.
The polarization and cognitive dissonance that persists is by no means new to the climate debate. But politicians and voters alike putting their heads in the sand and ignoring both the risks and opportunities we face also won’t solve any problems. It will only serve to make the economic and physical impacts worse.
In the U.S., coal is a dying breed because of the economics of natural gas and renewables, not climate policy. Manufacturing is rapidly evolving to adapt new technologies and automation, which of course has many clean technology tie-ins. At a personal level, we in the climate space need to be empathetic to what drives the average American to support regressive decisions like pulling out of Paris. But the onus is also squarely on us to do a better job of connecting dots and “selling” the benefits of climate action.
Perhaps the optimistic (and cynical) view is that all the backlash Trump is facing will cause him to reconsider his decision. It certainly wouldn’t be the first time. Even if the withdrawal moves ahead, legally it will take him three years – plus an additional year from the time the Agreement took force – to take effect. In another irony, that date would be November 4, 2020 – just one day after the 2020 Presidential election.
Despite the heartening reactions to Trump’s decision, we also can’t paint the future entirely with rose-coloured glasses. A significant ambition gap persists amongst global carbon emission reduction pledges – much more policy and investment is needed to drive action. And even if we decarbonized tomorrow, physical impacts would likely continue to increase in frequency and severity for decades to come.
It is impossible to see the future – every decision brings risks and trade-offs. But with the Paris Agreement, the international community unequivocally came down on the side of a low-carbon transition. While the U.S. federal government may no longer be at the table, there is more than ample leadership from other levels of government, business and international partners to keep up progress and momentum.
Mike Gerbis is the CEO and Jessica Butts is the Director – Policy Services at The Delphi Group. To find out more about Delphi’s understanding of policy analysis and regulatory developments, please contact Jessica at email@example.com.
We hope to see you at GLOBE Forum (March 14-16, 2018) in Vancouver, where leaders from around the world will discuss how we can accelerate action on climate change and grow the economic benefits associated with the low-carbon transformation.