Withdrawing from Paris agreement hurts the US more than anyone Opinion article

Jun 01, 2017 - 6:30pm

This article was published in the Sydney Morning Herald on Thursday 1 June 2017.

The world will be closely watching the White House Rose Garden on Friday morning, when President Trump delivers the finale to the most suspenseful story arc in his term so far: a decision on US participation in the Paris agreement.

So far, the signs are pointing to some kind of withdrawal.

When Trump was elected in November, a good part of the early reaction focused on how his promise to quit the Paris agreement might hinder global efforts to limit dangerous climate change. It quickly became clear, however, those fears were missing the main point.

It's not the Paris agreement that we should be worried about, so much as the US itself.

With its contribution to global trade and security already in doubt, the country's power and influence on the international stage will be further diminished by eschewing the agreement. For US citizens, its ability to benefit from the blisteringly fast growth of clean technology will be hampered.

Other countries are keen to take up the slack – in particular, China and the EU. Both have restated their commitment to the climate pact numerous times in recent months and are reportedly planning to issue a strongly worded joint statement this week.

"From a foreign policy perspective, it's a colossal mistake – an abdication of American leadership," R. Nicholas Burns, undersecretary of state under George W. Bush, told The New York Times. "I can't think of anything more destructive to our credibility than this."

Burns was so emphatic because the Paris deal was more than just a commitment on climate change: it was an unprecedented triumph of international diplomacy. After years of negotiation in the lead-up, the accord was adopted in November 2015 by 195 countries, and 147 have since formally ratified it.

Australia was one of those – in fact, just a couple of days after Trump was elected, our Prime Minister, Foreign Minister, and environment and energy minister fronted the media to announce the ratification. "It's clear the agreement was a watershed, a turning point; it has galvanised the global community and spurred on global action," Malcolm Turnbull said at the time.

He was far from alone: in the days after the US election, China, Japan, the EU and even petro-state Saudi Arabia said they would continue to support the commitment. "[This] process is resilient enough to move forward" without the US, a Saudi negotiator told the Financial Times.

That level of commitment can't be undone by one head of state – even if that state is the world's most powerful.

Even more certain than geopolitical risks are the financial ones: big businesses and investors of all types are utterly resolute on the need to support the commitment to limit warming to well below 2 degrees, if not to the much safer level of 1.5 degrees.

Hundreds of companies signed a statement calling for the US to remain in the agreement.

It is not just the clean-tech companies and innovators who are getting on board. Oil companies Chevron, Shell, BP and even Exxon have stated their support for the Paris Agreement, and Exxon's former chief executive Rex Tillerson, who is now Secretary of State, is well known to be in favour of remaining.

Exxon has little choice; on Wednesday its investors defied the board by adopting a shareholder resolution for comprehensive disclosure of climate-related risks to its business.

Among the supporters for the resolution were the world's biggest investment managers: BlackRock, Fidelity, and, reportedly, Vanguard. Traditionally, these investment giants are reluctant to exercise their power to vote against board recommendations, but just in the past few months all three have begun to use their heft to get companies to respond to climate risks.

It's not out of the goodness of their hearts. Investors are forward looking by nature and most of the world's listed thermal coal miners are in bankruptcy protection, after failing to anticipate that air pollution, climate change and technology would have demand for their products slump.

And those coal mining jobs that Trump claims to be able to rescue or create by abandoning Paris? Any energy analyst can tell you they won't come back. The US energy system has undergone a revolution due to several unstoppable developments: abundant production of natural gas, ever-cheaper renewables and, most recently, unexpected advances in electricity storage. Trump can indeed unravel existing and planned clean energy legislation, and that could mean it will not meet its emissions reductions commitments; but the rest of the world will look beyond this to the next presidency.

Kate Mackenzie

Kate is Investment & Governance Manager at The Climate Institute. Prior to joining the Institute in 2014, she worked primarily as a financial journalist, winning awards for her work at the Financial Times and the Australian. Earlier, she was a technology and business reporter for the Australian, and online editor of Australian IT. Kate is a veteran of new media, and was one of the first online journalists to be hired by the ABC in the late 1990s.

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