With or without the Paris Agreement –Trump won’t have the last word on US climate policy

On June 1, in the White House Rose Garden, President Donald Trump declared that he would start measures to withdraw the United States from the Paris Climate Agreement, putting his country back into the “pariah state” category of international climate negotiations.  This is the second time the US has earned this status, the first being after the George W. Bush administration dropped out of the Kyoto Protocol in March 2001. However, support for international climate action among the US electorate has grown since then, as has the willingness and ability of actors on the sub-national level to pursue their own ambitious climate agenda.

Protest in front of the White House in Washington D.C.
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Protest in front of the White House in Washington D.C.

On June 1, in the White House Rose Garden, President Donald Trump declared that he would start measures to withdraw the United States from the Paris Climate Agreement, putting his country back into the “pariah state” category of international climate negotiations.  This is the second time the US has earned this status, the first being after the George W. Bush administration dropped out of the Kyoto Protocol in March 2001. However, support for international climate action among the US electorate has grown since then, as has the willingness and ability of actors on the sub-national level to pursue their own ambitious climate agenda.

In fact, despite Trump’s announcement and de facto renunciation of America’s role as a global climate leader, the Trump administration cannot claim to speak for nor curtail the actions of ambitious climate actors in the United States. The good news, and one that keeps hope alive, is that as a country acting responsible to combat climate change, the United States collectively is better than its current leader. There are other strong players in the US on the sub-national state and city level who are poised to fight – and legislate – for an ambitious climate policy.

Local and state actors step up their game

Right after Trump’s announcement to withdraw from the Paris Climate Agreement, Mayors of 61 cities, representing 36 million Americans, declared in a joint statement that they would adopt the Paris Agreement goals and strengthen relationships around the world in order to protect the planet and create a clean energy economy. This is very much in line with the growing role of non-state actors in the climate process, such as the C40 Cities Climate Leadership Group, which brings 90 global cities with 650 million people and a quarter of the global economy together. The C40 Board is headed by former New York City Mayor Michael Bloomberg, whose significant private philanthropy supports the initiative. Independently, some 27 cities, including Atlanta and Chicago, have already committed to producing their entire electricity demand with renewables by 2025. States such as  Minnesota, Illinois, New York, California, Washington, Oregon, as well as those in New England are setting their own CO2 emissions reduction commitments that have already gone significantly higher than federal level targets set under the American intended Nationally Determined Contribution (INDC).

In the United States, and around the world, the shift toward renewables is irreversible. Renewables are more and more competitive, and have become attractive investment alternatives. The cost of solar and wind power has declined by 80 percent and 60 percent respectively within the last eight years. Green technologies such as storage solutions and electric vehicles – incidentally in which former Trump-pal Elon Musk sees his company Tesla’s economic future – are becoming more cost-competitive and making the business case for investments in clean energies a no-brainer.

Indeed, technological improvements and renewable energy access are changing the US energy landscape, including in “red” traditionally republican states. Take Kansas for example: While the state produced less than one percent of its energy from wind in 2005, the state’s share of wind power in the total energy generation nowadays reaches 30 percent. Nation-wide, two-thirds of the total new installed electricity capacities in 2016 are generated by wind and solar. 

Lost coal jobs won't come back

With 260,000 people, the solar industry in the US already employs a many more than the 76,572 people employed by the American coal industry in 2014, the latest year for which data is available. Thus, on many levels, President Trump’s argument that his move protects American jobs e.g.“for Pittsburgh and not for Paris”, has been thoroughly debunked. With cheap natural gas production soaring, the lost coal jobs Trump refers to won’t be coming back (with or without the Paris Agreements). Including in Pittsburgh, the traditional steel city in the country’s rust belt, most jobs nowadays are found in health services and education industries, not the coal or steel industries.

California is a leading example of states that will not go back on their commitment to address climate change, even if the federal government plans to. Over the past few days, the California State Senate, in anticipation of the Trump announcement, has worked feverishly to cement its progressive climate legislation and make it “Trump-proof” by insulating California from federal environmental rollbacks. According to California Senate President pro Tempore Kevin de Leon who spoke on national public radio just hours after the Trump announcement, California will double down in its effort to be a global climate leader with the goal of reaching 100 percent clean energy by 2045. Were California an independent country, it would be the sixth largest economy in the world. For California, which created 500,000 new clean energy jobs in the past few years and prides itself on having successfully decoupled carbon emissions from GDP growth, pushing forward with ambitious climate commitments is the only way forward. In addition, California, Washington and New York formed the United States Climate Alliance to work together in a “coalition of the willing” in defiance of the Trump White House domestically and internationally.

Majority of US citizens support global climate action

President Trump might have received cheap applause from those present at his Rose Garden announcement, and satisfied his core voters by keeping his word on a campaign promise, but he cannot count on the support of the majority of US citizen. Recent polls have highlighted that around 62 percent of Americans supported staying in the climate agreement, including a 60-plus percent majority of political independents. As the People’s Climate March and the March for Science have shown, citizens and civil society organizations will not be silenced. These organizations are also hoping to deliver an electoral set-back to Trump’s agenda when Americans go to the polls for the 2018 mid-term elections.

With states, cities, and citizens willing to double down and move ahead with climate commitments, the global community can still count on many Americans’ willingness to act responsibly in support of global climate actions, even if their White House is not.

“America First” and the rollback for climate finance

Unfortunately, such activism will not make up for the failure of the Trump administration to make good on its international climate finance obligation. Even if the declaration is actually old news and without much additional consequence, the shortchanging of international climate finance by the Trump White House will be hard to ignore. The announcement of  America’s intent to withdraw from the Paris Agreement is formalizing what the Trump administration had already indicated with its FY 2018 budget request weeks earlier: that under this administration, there will be no US financial support to developing countries to help them in realizing their climate ambitions.

In all honesty, the outcome for American international climate finance contributions would most likely have been the same, even if the Trump administration had decided to stick with the agreement. Or as White House Budget director Mulvaney said in mid-March with respect to both international and domestic climate funding: "We're not spending money on that anymore. We consider that to be a waste of your money to go out and do that." Case in point is the Environmental Protection Agency (EPA).

The Trump budget proposal wants to cut funding for the Clean Power Plan, international climate change programs, climate change research and partnership programs, and related efforts. While the Trump’s White House FY 2018 budget proposal will likely change in order to gain approval by the US Congress, it is unlikely that a Republican majority in both houses will restore international climate finance commitments.

There will be a net loss in climate finance support

To recall, many developing countries had clearly indicated what they can achieve with domestic efforts alone, and how much of their ambition was conditional on international climate finance support by developed countries, when they first submitted their Intended Nationally Designated Contributions (INDCs) in the lead-up to the Paris climate summit. For example, just to implement the INDCs of the 48 poorest developing countries could cost as much as US$93 billion per year, with a significant share to pay for their implementation expected to come from international sources.

And a key country like India has made all of its INDC implementation costs, a reported US$2.5 trillion over 15 years, fully conditional on international finance support. Thus, the United States’ refusal under Trump to fulfill financial obligations under the UNFCCC toward the agreed US$ 100 billion per year by 2020, the financial baseline under which climate finance support was to be ratcheted up under the Paris Agreement, will undoubtedly have a cooling effect on the ability of developing country Parties to raise their emission reduction commitments in the next few years.

While core elements of the Paris Agreement implementation, such as writing the technical rule-book, can move forward without the Trump Administration over the next few years (presumably until a follow-up, more enlightened US administration recommits to the Paris Agreement), there will be a net loss in climate finance support – especially, since other OECD countries won’t be willing to make up the US financing shortfall while increasing their own financial contributions at the same time as would be needed. One can only hope that the US actions won’t produce additional blatantly unapologetic copy cat climate finance renegades among developed countries.

The accounting methods of prior US financial contributions in support of climate change actions globally might have been questioned (such as whether loans and guarantees under a US export credit agency should be counted toward the fulfillment of American climate finance obligations), but they will now be absent all-together in the international climate negotiations. The FY18 budget by the White House eliminates the Global Climate Change Initiative (GCCI) entirely , which provided US$10 million in support of the UNFCCC and the Intergovernmental Panel on Climate Change in last year’s budget – a sum that while nominally small, nevertheless means tremendous financial shortfalls to secure the ongoing work of both bodies.

Last hope on climate-change related financing: US-based investment firms

On the campaign trail, Trump had already promised to cancel all US payments to “UN climate change programs” and his FY18 budget zeros out any support for the Green Climate Fund (GCF), which is considered instrumental for the Paris Agreement implementation. Despite the US$ 3 billion signed contribution agreement by the Obama Administration to the GCF, this action makes the USA technically the largest single country contributor to the US$10.3 billion pledged to the GCF, of which the previous administration could only deliver US$1 billion – including a last minute US$500 million wire-transfer to the GCF on President Obama’s way out.

While the Global Environment Facility (GEF) will continue to receive US money as the only multilateral environment fund under Trump’s budget, contributions would be reduced by 30 percent versus fiscal 2017 levels. Trump’s budget proposal is also cutting American support to multilateral development banks (MDBs) by a quarter, which are significant players in global climate finance with $25 billion in 2015 alone. In the past, the Overseas Private Investment Corporation, which the Trump FY 2018 budget no longer supports, issued US$ 1 billion per year in loans, guarantees and insurance to mobilize private sector investments in renewable energy.

Probably most shocking is that all other clean energy programs under the US Agency for International Development (USAID) and the State Department, a significant chunk of the American bilateral climate assistance, are also completely defunded and sustainable development activities, such as for biodiversity and sustainable landscapes, are reduced to the point of extinction. By some calculations, the cut in related development assistance could be US$ 2.9 billion for FY 2018.  

If one looks for any hopeful news coming out of the United States on climate-change related financing, it is surprisingly with respect to shareholder actions of US-based investment firms like BlackStar or Vanguard. They are flexing their muscle and demanding climate change financial accountability of their long-term investment portfolios from the corporations in which they invest. Their latest victory: the world’s largest oil company, US giant Exxon Mobil – which is incidentally the old stomping ground of Secretary of State Rex Tillerson, who reportedly fought and lost the battle in the Trump administration for the United States to remain in the Paris Agreement.