President Trump’s insistence on withdrawing the USA from the Paris Accord on Climate Change on the grounds that it put the country’s manufacturers at a disadvantage on the international stage has received wide-scale condemnation – both internationally and domestically. But does it really matter?
The withdrawal of the world’s second largest producer of CO2 emissions from an agreement that seeks to mitigate the global effects of those emissions might seem to be the beginning of the end.
However, were it all to end tomorrow, if the Paris Accord only accomplished one thing, it marked global acceptance of the science of man-made climate change. And while climate change sceptics remain vocal, the unanimity of Paris ensures that their voices are muted.
Trump’s contention that the requirements of the agreement would put US industry at a comparative disadvantage is not dissimilar to sentiments currently being raised in the Australian market, where the necessary end-of-life closures of coal-fired power plant without suitable replacement capacity being prepared are leading to increasing energy costs for both domestic and industrial users.
However, while the Australian energy fiasco has everything to do with a lack of succession planning, the situation in the USA is starkly different. Thanks to careful planning and enlightened regulation, the country’s gas supplies are booming. And US business has been at the forefront of renewable energy development.
Indeed, the US Department of Energy reckons that renewable energy generation employs around 880,000 Americans, and a further 2.2 million are employed in its design, installation and manufacture.
Despite Trump’s contention that it is the Paris Accord that is putting the US coal industry into terminal decline, it is purely a case of economics.
Before the Obama administration, coal-fired plants provided more than 50% of the USA’s electricity. Now, following the replacement of around 400 coal-fired power stations with cheaper gas-fired plants, that figure is closer to 30%.
Despite its size, the USA is but one from a list of 195 signatories to the Paris Accord. However, the issue at the heart of Trump’s dilemma is perhaps not so much to do with the USA reducing its own emissions, it is the duty of care that the agreement puts on developed nations to assist those less developed in reducing their emissions.
The Paris Accord accepts that developed countries, ie those that have been polluting for longer, should “take the lead” by taking on absolute emissions cuts.
In contrast, it allows developing nations to continue to burn coal and oil to power their growing populations, while they are encouraged to enhance their efforts and “move over time” to cuts.
Crucially, the heart of the accord is the consensus that rich countries should provide financial support for the developing nations' emissions cuts.
With its burgeoning renewable energy industry, the USA is well placed to benefit economically from the global switch to low- and zero-emissions generation. And while the Paris Accord is all about saving the planet, it clearly offers opportunities for profit that US industry is keen to exploit.
So is it really such a bad deal for the USA, Mr Trump?