Blog Post

Adieu Paris: what’s next for climate policy if Trump ditches the Paris Agreement?

US President Trump has made it clear that he is not happy with the Paris Agreement. This week he will announce whether the US will withdraw from the Agreement altogether. What might that mean for the global fight against climate change? US decarbonisation is already well underway but the EU would need to step up and defend global climate governance.

By: and Date: May 30, 2017 Topic: Energy & Climate

Tweeting from Taormina after the G7 summit, President Trump announced his intention to make a final decision on the Paris Agreement this week. The fact that he did not join the other six leaders when they reaffirmed their commitment to the Paris Agreement might indicate a plan to pull the US out of the Agreement.

This decision would be a huge but expected U-turn in US climate policy, in line with Trump’s electoral campaign promises. Under President Obama, the US took on a leading role in the global fight against climate change. Indeed, the Paris Agreement would probably not have materialised without the action of the former President. He played a central role in committing the US to cut greenhouse gas emissions, and also in engaging emerging countries – and particularly China – in the process. The road to Paris started to look really possible only when, in November 2014, the US engaged in a landmark deal with China that put the world’s two largest greenhouse gas emitters in lockstep to cut emissions.

If President Trump’s does decide to withdraw, this choice would clearly be driven by domestic political reasons. It would completely dismiss three fundamental facts of the USA’s energy and climate reality:

  1. The US is already decarbonising, as a result of energy market trends rather than of climate policy. Due to sluggish economic growth, the switch from coal to natural gas that has followed to the ‘shale gas revolution’, and the emergence of more efficient technologies, the US has reduced its greenhouse gas emissions by more than 10 percent between 2005 and 2015. Sticking to the Paris Agreement would, therefore, not have been too difficult for the US.
  2. Trump’s wished-for renaissance of coal is unlikely to materialise, either with or without strong climate policy. As most recently illustrated by a study from the Columbia University Center on Global Energy, the decline in domestic US coal has been predominantly due to increased competition from cheap natural gas rather than by environmental regulations or climate policy. Should natural gas prices remain at current levels, US coal demand will continue its decline, even without the Paris Agreement.
  3. As a result of technological advancements, renewable energies such as solar and wind will inexorably expand their role in the US energy system, regardless of climate policy. This is clearly illustrated by the fact that the average cost of wind energy has declined by 66% between 2009 and 2016, while the average cost of solar photovoltaic has fallen by 85%.

These facts are clear also to oil companies. It is not by coincidence that even the CEO of Exxon Mobil (the world’s largest listed oil company, and also the one considered by climate change activists as the most conservative), recently wrote a personal letter to President Trump, urging him to keep the US a party to the Paris Agreement.

On the basis of these three facts US decarbonisation is likely to continue, even if the Trump administration withdraws from the Paris Agreement. Therefore the most worrisome implication of Trump’s eventual decision would not concern the US contribution to global warming, but rather the solidity of the overall structure of the Paris Agreement.

The Agreement is fundamentally based on international cooperation and mutual trust. With the historically-largest greenhouse gas emitter pulling out of the Agreement, it would be difficult to convince other countries to stick to their commitments.

In particular, countries with carbon-based economies such as the Gulf countries, Russia or even Australia and South Africa might have primarily joined the Paris Agreement in order to avoid being side-lined in international policy debates. If the US is leaving, this argument is somewhat meaningless.

More worryingly, emerging countries whose emissions are likely to substantially increase, such as India, closely monitor US climate policies. Their governments, and those of all other parties, would most likely find it more difficult to persuade their domestic audiences of the need and feasibility of strong climate policies.

In this context, the roles of the second-largest historical emitter, the EU, and of the currently-largest emitter, China, will be key to ensure the stability of the Paris Agreement architecture in the event of a unilaterial US withdrawal.

If Trump pulls the US out of the Agreement, the EU and China should promptly react, by taking the lead in a new initiative to revive the ‘spirit of Paris’.

First of all, the two partners should immediately deliver a joint declaration aimed at reaffirming their commitments towards the Paris Agreement, and at inviting all other parties to do the same. The 19th EU-China Summit taking place in Brussels on 1-2 June might represent a timely occasion to do this.

Secondly, the two partners should propose to the German Presidency of the G20 to organise a special session (open to the G20 countries minus the US) devoted to the Paris Agreement at the forthcoming Hamburg summit of 7–8 July 2017. This session should aim to build up the political momentum for advancing the implementation of the Paris Agreement. In particular, it should encourage the advancement of ongoing discussions on issues such as monitoring regimes and climate finance. In particular, the clarity on the US stance should make it easier for the other countries to make progress on the complex negotiations about how to transpose the articles of the Paris Agreement into workable rules. This should make concrete steps forward possible in the forthcoming COP23 in Bonn (6 – 17 November 2017).

The EU should now swiftly understand its new global responsibility, and promptly strengthen its engagement with China and other countries to keep up momentum and decisively proceed along the road defined in Paris.


Republishing and referencing

Bruegel considers itself a public good and takes no institutional standpoint. Anyone is free to republish and/or quote this post without prior consent. Please provide a full reference, clearly stating Bruegel and the relevant author as the source, and include a prominent hyperlink to the original post.

View comments
Read about event More on this topic

Past Event

Past Event

Is there life After TTIP? The future of transatlantic economic relations

The partnership between North America and Europe is becoming unsettled and uncertain. How can we deal with this new situation that threatens the prosperity and ultimately the position of North America and Europe in the global economy.

Speakers: Maria Demertzis, Daniel S. Hamilton, Luisa Santos and André Sapir Topic: Global Economics & Governance Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: February 19, 2018
Read article More on this topic More by this author

Podcast

Podcast

Brexit consequences for EU climate and energy policy

Bruegel fellow Georg Zachmann joins Richard Tol, professor in the Department of Economics at the University of Sussex, and Pieter-Willem Lemmens, head of analysis at the climate policy think-tank Sandbag, for this episode of 'The Sound of Economics', to discuss the impact of Brexit on climate and energy policy in the European Union.

By: The Sound of Economics Topic: Energy & Climate Date: February 15, 2018
Read article More on this topic More by this author

Opinion

Climate policies risk increasing social inequality

The aggressive political interventions needed to effectively counteract climate change will make the rich richer and the poor poorer, if social concerns are not given greater prominence in policy debates.

By: Georg Zachmann Topic: Energy & Climate Date: February 8, 2018
Read article More on this topic More by this author

Opinion

The International Economic Consequences of Mr. Trump

What has fundamentally changed with the Trump administration is not that it behaves more selfishly than its predecessors, but that it seems unconvinced that the global system serves US strategic interests. For the rest of the world, the key question is whether the global system is resilient enough to survive its creator’s withdrawal.

By: Jean Pisani-Ferry Topic: Global Economics & Governance Date: January 31, 2018
Read article More on this topic More by this author

Blog Post

EU budget: Expectations vs reality

The public's impressions of where money is spent in the European Union can often be wide of the mark. But whether this is a result of wishful thinking or just a lack of information remains unclear.

By: Yana Myachenkova Topic: European Macroeconomics & Governance Date: January 29, 2018
Read about event More on this topic

Past Event

Past Event

EU long term climate change strategy

This meeting, which will take place in Czestochowa, is part of the project “Developing the EU long-term climate strategy”.

Topic: Energy & Climate Location: Czestochowa, Poland Date: January 29, 2018
Read about event More on this topic

Past Event

Past Event

EU Long Term Climate Change Strategy

This meeting, which will take place in Copenhagen, is part of the project “Developing the EU long-term climate strategy".

Topic: Energy & Climate Location: Copenhagen, Denmark Date: January 26, 2018
Read article More on this topic

Blog Post

Climate change adds to risk for banks, but EU lending proposals will do more harm than good

Climate change is a relevant risk factor for the banking sector, but the European Commission's plan to lower capital requirements for greener investments is irresponsible in encouraging banks to forego proper risk management.

By: Arnoud Boot and Dirk Schoenmaker Topic: Energy & Climate Date: January 16, 2018
Read article Download PDF More by this author

Policy Brief

Beyond coal: facilitating the transition in Europe

Europe has a dirty energy secret: coal is producing a quarter of the electricity, but three-quarters of the emissions. The EU should propose that its member countries speedily phase out coal and put in place a scheme to guarantee the social welfare of coal miners who stand to lose their jobs, making a better use of the European Globalisation Adjustment Fund (EGF)

By: Simone Tagliapietra Topic: Energy & Climate, European Macroeconomics & Governance Date: November 23, 2017
Read article More on this topic

Blog Post

Phillips vs. Pass-through, or the changing ECB understanding of inflation

This blog post looks at how the approach of the ECB to inflation has changed over the years. It shows the ECB has moved, over the years, from a small towards a large country approach, giving more weight to the improving employment conditions than to the appreciating exchange rate in deciding its monetary policy moves.

By: Francesco Papadia and Alessandra Marcelletti Topic: European Macroeconomics & Governance Date: October 25, 2017
Read about event More on this topic

Past Event

Past Event

EU-Turkey energy and climate dialogues

This event is part of the joint Bruegel-IPC initiative European Neighbourhood Energy and Climate Dialogues. This is a closed door event, open only to Bruegel's members and a group of experts.

Speakers: Dirk Buschle, Ahmet Evin, Myriam Ferran, Philipp Godron, Daniel Grütjen, Sohbet Karbuz, Susanne Nies, Mehmet Oguctu, Megan Richards, John Roberts, Umit Sahin, Simone Tagliapietra and Georg Zachmann Topic: Energy & Climate Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: October 20, 2017
Read about event

Past Event

Past Event

How can sustainable finance contribute to the Paris climate goals?

What is the role of sustainable finance in reaching the Paris Climate goals? What are the specific proposals towards this goal and which are the challenges facing the implementation of green finance?

Speakers: Peter Blom, Viktoria Dendrinou, Olivier Guersent, Catherine Howarth, Stewart James and Dirk Schoenmaker Topic: Energy & Climate, Finance & Financial Regulation Location: Bruegel, Rue de la Charité 33, 1210 Brussels Date: September 25, 2017
Load more posts