[NGW Magazine] Editorial: Washington cedes climate leadership
This article is featured in NGW Magazine Volume 2, Issue 11
The US president, Donald Trump, fulfilled a campaign promise against the advice of some of his family and key advisers and announced June 1 that the US would withdraw from the Paris Climate Agreement. He opposed its $100bn/yr Green Climate Fund and the different rules that it imposed on different countries and called it a bad deal for Americans.
US withdrawal from what, under Barack Obama, was a position of US strength, could have dramatic effects on the patterns of global trade and existing alliances. The lure of the political capital that could be derived from delivering the ambitious deal could be strong enough to unite other blocs. The European Union for example might otherwise have taken its cue from Washington but now will have to rethink its strategy, no doubt in partnership with other blocs.
Because without Washington to provide the solidarity that such an aspirational and expensive goal requires to keep everyone moving in the same direction, the immediate future of the agreement itself is less certain. After all, it has taken some 25 years to get where it is today.
Some politicians and observers doubt if the looser alliance of US states and industries, that has been suggested as the natural way ahead, could substitute for a committed government in Washington, if only because of the vast amounts of money that will be needed. The deal therefore might not survive.
The deal relies on national promises to reform that are not legally enforceable but with US government backing it would have been an important step towards a cooler planet that could gather momentum. Now, some European Union (EU) politicians say, it is just a shell, with nobody now in the driving-seat.
As emotions cool, the EU’s categorical rejection of Trump’s offer to renegotiate a ‘fairer’ deal might be tempered over the coming years as they find they need US government money – although that will have strings attached. China, too, will prove to be a tough negotiator.
But for now the EU is uncompromising on further talks. The US decision represents a rejection of shared values in favour of its own interests, encapsulated by the ‘America first’ slogan – which, along with Trump’s comments in late May on the member countries’ unequal division of Nato funding, has made it harder for either side to contemplate working together for shared goals.
That approach has put the EU in the unusual position of having to welcome the opportunities for co-operation presented by China, whose own style of government – opaque, no supporter of the rule of law and a major headache for European heavy industry, such as steel manufacturers – is very different from the EU’s. There has been much suspicion of Chinese ownership of EU infrastructure, such as energy grids, too.
Optimists however believe that it is now the destiny of the EU and others to fulfil the leadership role in the climate change fight, moving the centre of economic gravity decisively eastwards. Seizing the initiative, China’s premier, Li Keqiang, visiting Brussels to promote the major Chinese trade initiative, Belt and Road, told reporters that China supports international rules.
“There have been changes in the international situation and there have been rising uncertainties and destabilizing factors and in such circumstances it is important for China-EU relations to become more stable,” he said, within hours of Trump’s announcement.
And Wood Mackenzie sees Trump’s decision as triggering a major shift in one area of global business: “The US withdrawal of the Paris accord will offer an unprecedented opportunity for China, the biggest carbon emitter and the biggest renewable energy supplier, to ascend in leading global climate affairs,” it said.
From this perspective, Trump has precipitated not only close co-operation between China and the EU; but also the flight of US companies eastwards as they relocate their renewable technology research and development centres to Asia, to the detriment of the US treasury. “By leveraging the strong manufacturing value chain in China and other Asian countries, the cost of renewables could fall even faster and penetrate more rapidly to displace dirty, fossil fuel such as coal in key Asian markets,” it said.
The US agreed to reduce its emissions by 26-28% below 2005 levels by 2025, China only committed to peaking its carbon dioxide emissions by 2030 and to use “best efforts” to meet this goal earlier. Trump pointed out that China “will be able to increase emissions for 13 more years.” And India conditioned its participation on foreign aid.
According to a study by NERA Economic Consulting, the total potential emissions reductions from existing policies together with planned policies announced by the Obama Administration are insufficient to achieve the US’s INDC pledge. While the projected size of the INDC emissions “gap” varies somewhat among various analyses, the study concluded that such a gap cannot be filled without contributions from the industrial sector, such as iron, steel, coal and natural gas.