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Monday, June 5, 2017

Policy Snapshot: Understanding the Withdrawal from the Paris Climate Agreement

Paris Agreement

The Eiffel Tower is illuminated in green to celebrate the Paris Agreement on November 4, 2016.

Written by Gavin Dillingham,Program Director, Clean Energy Policy

On Thursday, June 1st, President Trump and his Administration withdrew the United States from the Paris Climate Agreement. The Agreement was signed December 2015 by 195 countries during COP 21 in Paris (the 21st meeting of the Conference of the Parties). The Agreement went into effect October 2016 with the ratification by the European Union. Currently, 147 countries have ratified the agreement.

The Trump Administration’s justification for the withdrawal was based on the argument that the Intended Nationally Determined Contributions (INDCs), i.e. carbon reduction goals, placed the United States at an economic disadvantage on the global stage. According to the Administration, the INDCs would require the federal government to adopt carbon-reducing policies and regulations that would limit economic growth. Further, the Administration argued that economic rivals, including China and India, would have an advantage over the United States because their specific pledges were significantly less onerous.

The Administration’s justification to leave the Paris Climate Agreement to prevent economic harm is largely unfounded. It is true, the Agreement is an international treaty under the Vienna Convention. However, the INDC's are not legally binding; there are no penalties for non-compliance, nor are there sanctions if a country is unable to meet its goals. The only legally-binding mandates include national reporting requirements. Reporting requirements allow for all countries to see how others are progressing and provide a mechanism for adjusting climate reduction activities.

Ultimately, the Paris Agreement is simply an accord between countries to work toward the common goal of carbon reduction. The Agreement allows for a high level of transparency to track progress and facilitates information sharing among participating countries. It also provides an opportunity to share technology, resources and information regarding the achievement of goals. No prescriptive path is mandated, nor are specific carbon reduction actions required. Rather, the Agreement aggregates goals established by individual countries. Cooperating nations work together to reduce carbon emissions to prevent global temperature from rising above a 2 degree Celsius threshold.

What's next for the Paris Agreement? With the Trump Administration’s formal announcement, the clock has started ticking. The time frame to withdraw from the Agreement is four years and the final decision will not be made until after the 2020 election. That means there is still the possibility for the United States to stay in the Accord. However, even if the United States does not ultimately withdraw in 2021, its reputation and standing as a leader in addressing climate change is weakened. Although there is some concern that the withdrawal of the United States will leave a leadership vacuum and reduce the resolve of other countries, it appears so far that this will not be the case.

Two primary countries of concern for the Trump Administration were India and China. The Administration felt that these two countries would continue to increase their emissions while the United States would be negatively constrained. However, this does not appear to be the case. India has already stopped the development of 13.7 gigawatts of coal-fired power plants as of May 2017, and suggests that 8.6 gigawatts of recently built coal-fired plants will be not able to compete with renewable resources. According to Climate Tracker, China’s current policies are likely to over-achieve their INDC's. Further, they are shuttering their old-coal fired power plants and new plants must meet very stringent efficiency standards that far out-perform plants in the United States. The Chinese are also looking to add 13 million new renewable energy jobs by 2020 and expect to shed about 1.3 million coal related jobs.

In the United States, where 70% of the population supports the Paris Agreement, it is left to state and local governments and the private sector to keep the country on track to reduce carbon emissions. Many of these entities have pledged to move forward with their own carbon reduction efforts. The Administration’s decision generates uncertainty, both domestically and globally. However, due to economically competitive renewable energy and battery storage technology, the momentum in the direction of continuing carbon reductions will continue, just without the leadership of the United States federal government.