President Trump has announced his intention to pull out of the Paris Climate Agreement. He had already issued an Executive Order for the Environmental Protection Agency to review climate and related regulations, including former President Obama’s Clean Power Plan, with respect to their effect on jobs and energy independence. The Obama-era initiative was an important step in the U.S. commitment to climate change.
Trump’s actions will further upend the ability of the United States to negotiate other agreements, including trade agreements, by cementing a global suspicion that the United States is no longer a trusted partner. His decision violates his own negotiating principles by working to reverse long-established progress in increasing carbon efficiency and stabilizing CO2 emissions.
Climate concerns are not new. They dovetail with efforts in many emerging markets to move away from coal to cleaner fossil fuels and renewables to improve their environments. Global progress on the climate front is remarkable and predates the Paris Agreement.
Trump’s book, The Art of the Deal, lays out an 11-step formula for business success, including: think big, protect the downside, maximize your options, know your market, and use your leverage. By rejecting the Paris Agreement without a vision for the future, Trump is thinking small, increasing downside exposure, reducing his options, and limiting his leverage.
Coal production is down 27 percent since 2014. Natural gas surpassed coal for the first time ever as a fuel source in electric power generation. These trends will not reverse.
Exports are the most important new market for coal. Countries that now import U.S. coal, particularly in Europe, may look askance at Trump’s actions and/or look for alternative sources of coal.2
Not only is Trump boxing himself and the United States in on the climate front, he clearly doesn’t know his market. U.S. CO2 emissions declined 1.7 percent in 2016 and 16 percent since 2005.3 Given that path, the United States could be in a leadership position in the 2020s when countries meet to assess their progress.
In our Chart of the Month from March 2016, Is the Climate Change Challenge as Hard as We Think?, we presented an alternative scenario for reaching global climate goals of a rise in global temperatures below 2 percent.
This alternative scenario was based on holding global CO2 emissions flat through 2020 and then achieving sequential declines. We used this scenario as the foundation for our Bending the Curve carbon budget in our report last year, The Future of Fossil Fuels.
Notably, we are on that path! Trump appears to be on the verge of snatching defeat from the jaws of victory. He (and we) have discovered that things do not work out well when he takes his “eye off the ball.” 4
1 “IEA Finds CO2 Emissions Flat for Third Straight Year Even as Global Economy Grew in 2016.” www.iea.org. International Energy Agency, March 17, 2017. Web.
2 “Coal production increases during second half of 2016, but still below 2015 levels.” EIA.gov. U.S. Energy Information Administration, March 29, 2017. Web.
3 “U.S. energy-related CO2 emissions fell 1.7% in 2016.” EIA.gov. U.S. Energy Information Administration, March 29, 2017. Web.
4 Fisher, Marc, and Michael Kranish. “The Trump we saw: Populist, frustrating, naive, wise, forever on the make.” The Washington Post. WP Company, August 12, 2016.
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