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United States

Pulling out of Paris is an empty gesture

UNITED STATES: Following Donald Trump's announcement that he was taking America out of the Paris climate agreement, US states, cities and companies have lined up to pledge their continued support for it, while analysts disagree on what the country's exit actually means.

Firm grip… Trump was piqued by losing  handshake showdown with new French president Emmanuel Macron in the week before he pulled the US out of Paris deal (pic:Mandel Ngan/AFP/Getty Images)
Firm grip… Trump was piqued by losing handshake showdown with new French president Emmanuel Macron in the week before he pulled the US out of Paris deal (pic:Mandel Ngan/AFP/Getty Images)

Since Donald Trump announced last month that he would withdraw the US from the landmark Paris climate agreement, there has been much hand-wringing.

But in reality, as analyst Kevin Book of Clearview Energy Partners in Washington notes: "What you have is a president making a non-binding withdrawal from a non-binding agreement."

The US exiting the accord "will not make one iota of difference" to US wind power, adds Amy Grace, head of North American research at Bloomberg New Energy Finance (BNEF).

What matters is legislation and regulations put in place within the US, she insists.

But Chuck McConnell, executive director of Texas-based Rice University's Energy and Environment Initiative and a former assistant secretary at the US Department of Energy under Barack Obama, disagrees that Trump's announcement was just symbolic or window-dressing.

Trump likes to negotiate from positions of extreme, he says. "And he's a son of a gun to negotiate with."

Trump also announced that the US will try and re-enter the Paris Agreement on more favourable terms, an idea that was soon dashed by leading signatories to the agreement, including France, Germany and Italy.

Trump's move was no surprise. He had repeatedly promised his campaign supporters that he would take the US out of the accord because, he claimed, it was hurting US jobs and the economy.

The property billionaire turned president sees withdrawing from the accord as a triumph of American populism over globalism, which he believes does not prioritise the US enough.

"His action on the Clean Power Plan (CPP) was a foreshadowing moment of this decision," says Luke Lewandowski, a research manager at Make Consulting.

In late March, Trump — flanked by coal miners — had ordered a review of the CPP. The plan, on hold in the court system, is being challenged by conservative states. Trump views the CPP as leading to regulations that he sees as hampering business; and he favours fossil fuel over clean energy.

Trade war unlikely

Some have predicted trade wars or carbon tariffs as a result of the US exiting the agreement. Clearview's Book says: "The conclusion of Paris disagreement and a world of differential carbon pricing regimes is likely to be a trade war."

However, this seems unlikely. Trade disputes usually arise, tit-for-tat, from trade-related policy changes, points out Stephen Munro, a policy analyst at BNEF.

"The Paris Accord isn't a trade deal, and US withdrawal from it isn't a trade-policy action. I don't know of any historical example of a non-trade action sparking a major trade fracas," he says.

Munro dismisses the concern that Europe will impose carbon pricing on US imports because of Trump's action.

"I'm not aware of any European interest groups that are calling for carbon tariffs on US goods now that weren't calling for carbon tariffs on imports before Trump pulled out. In other words, it looks like the same interests (the Greens and their coalition partners) yelling louder, not a larger group coalescing around the issue."

Defiant backing for Paris deal

Trump is facing a rapidly-growing number of US states, municipalities and even major corporations that are aligning themselves with the Paris Agreement, in direct contradiction with the White House (see map).

Within days of Trump's announcement, US states equivalent to the world's third largest economy, as well as cities and Fortune 500 companies, had publicly backed Paris.

US states and cities supporting Paris Agreement (as of 13 June for states; 6 June for cities)

Jerry Brown, governor of California, the US's most populous state, quickly travelled to China and inked a non-binding deal to cooperate on lowering greenhouse-gas emissions by expanding cooperation on renewable energy, zero-emission vehicles and low-carbon urban development.

Michael Bloomberg, former mayor of New York, pledged $15 million from his foundation to "support the operations" of the United Nation's Framework Convention on Climate Change, which coordinates the Paris Accord.

Such statements may be political hot air, but they could also represent a redoubling of effort.

"It's the silver lining. It's really encouraging, and it may be that, ironically, the decision to vacate Paris energises the pro-climate movement," Brian Schatz, Hawaii's Democratic senator, told a Washington DC political newspaper.

"I don't think it's a substitute for international policy," Schatz said. "But to get more renewable energy online is mostly a local decision. It's made by public utility commissions, it's made by governors and mayors and utility companies, and so, the fight goes local."

Hawaii has passed a law to align itself with Paris, following Trump's announcement, and had already committed in 2015 to sourcing 100% of electricity from renewable sources by 2045.

The 195 signatories of the voluntary 2015 Paris Agreement agreed to collaborate to reduce greenhouse-gas emissions, keeping the world's temperature to just 1.5C above pre-industrial levels. To meet the challenge, Trump's predecessor, Barack Obama, pledged to reduce US emissions by 26% to 28% below 2005 levels by 2025.

The US power sector is on track to meet its share of the accord anyway, although the country's transport sector may not.

Trump exiting the accord does not change the power-sector fundamentals, say analysts. Wind and solar are getting cheaper, and usage of natural gas is increasing.

Under the accord, developed nations also agreed to provide $100 billion a year by 2020 for the Green Climate Fund to help developing countries move away from fossil fuels and use more renewable energy.

The US pledged $3 billion, and has so far contributed US$1 billion. The US's remaining US$2 billion pledge is now unlikely to be paid during Trump's presidential term.

Timing is crucial

Many have noted the obvious, regarding the timing of a US exit. The US - or any other signatory of the Paris Accord — according to the agreement cannot formally seek withdrawal until 4 November 2019.

If any country does so, it could not then actually withdraw for another year, on 4 November 2020.

Trump may choose to seek for a second presidential term, and if so would seek to win the presidential vote on 3 November, 2020, one day before the US's exit could become final. Trump, as of mid-June, had record low approval ratings.

On 12 June, his rating was 36%, according to the Gallup daily tracking poll. At the same point in his term, Obama's approval rating was 61%, according to the same poll.

Neither BNEF nor Make are adjusting their forecasts for US wind build because of the planned Paris withdrawal.

Make, for example, had already taken 10GW of wind build in America out of its forecast for 2021-2026. That was shortly after Trump was elected, in November 2016, an anticipation of the end of the CPP, notes Lewandowski.

Trump decided to pull out of the agreement to make good on a campaign promise. BNEF's Grace speculates it may also have been motivated by the fear that the Paris Accord leaves the US vulnerable to court challenges that would make dismantling the CPP difficult.

She points to a letter sent by 22 Republican senators to Trump on 25 May warning of this likelihood.

In the letter, the senators warn of moves by "leading environmental attorneys" to use the Paris Accord and the EPA's so-called endangerment finding - which provided the legal foundation for the Obama administration's climate-change policies — to force the EPA to regulate greenhouse gases.

"A key risk to fulfilling this objective (of unwinding the CPP) is remaining in the Paris Agreement," they write.

"Because of existing provisions within the Clean Air Act and others embedded in the Paris Agreement, remaining in it would subject the United States to significant litigation risk that could upend your administration's ability to fulfil its goal of rescinding the Clean Power Plan. Accordingly, we strongly encourage you to make a clean break from the Paris Agreement."

The senators, almost a quarter of the 100-seat Senate, received more than $10 million from oil, gas and coal companies in the past three election cycles, according to a survey by the UK-based Guardian of Federal Elections Commission data prepared by the Centre for Responsive Politics.

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