Putting America First
In keeping with his "America First" agenda, the Trump Administration ended months of speculation when he announced the U.S.'s withdrawal from the Paris Agreement. His decision comes despite full page ads by American companies, pressure from CEOs (including Tesla, Apple, Dow, and Exxon), the advice of his Secretary of State, and bipartisan support amongst Americans. In his words, the President's decision to retract U.S. support stemmed from what he sees as his chief duty: to put forth economic, regulatory, and tax structures that promote a domestic high standard of living and high environmental protection, as well as the protection of the American people. In the President's view, the Paris Agreement forced the American people to give up sovereignty and the ability to be competitive abroad.
During his comments, the President made his case for exiting the historic agreement:
- It put the interests of those abroad over the American people's welfare and American businesses.
- It punished the U.S. and didn't impose the same restrictions on "big polluters." China and India were specifically called out during his remarks.
- It "handcuffs" the U.S.' ability to compete abroad due to its regulations.
- It takes away America's ability to tap into its energy reserves and its "phenomenal wealth." The administration expects 3-4% growth, which will require all forms of energy. In the administration's estimation, renewable energy could only cover 1% growth.
- The accord "redistributes wealth" through the green climate fund ($100 billion in aid to developing countries by developed countries). This is a fund separate from other foreign aid. The President stated the U.S. has already given $1 billion towards this fund while other countries aren't "paying a dime."
- It did not provide a fair framework that placed the burdens and responsibilities equally among world leaders.
- It would cost, per the National Economic Research Associates study cited, 2.7 million lost jobs by 2025, and by 2040, impact several industries including paper, cement, iron/steel, coal and natural gas, as well lead to the loss of $3 trillion dollars in GDP and 6.5 million industrial jobs.
- It does not solve the climate change issue.
What happens now?
Divorce can be long and drawn out and exiting this agreement is no different. The President was unequivocal: the implementation of the agreement's components, mainly the NDCs and the green climate fund, will cease. This will affect the Clean Power Plan, fuel economy standards set in place, and Executive Order 13693, among other items. Even after Thursday's announcement, the U.S. will effectively remain in the agreement until after the next Presidential election in 2020. This is due to the agreement's structure to provide flexibility but also bind its signatories to change. Under the agreement, the President cannot provide written notice of U.S. intent to withdraw until November 2019, and it would then take another full year after that to officially exit. Thus, eliminating any clean, quick departure.
Further obfuscating matters, while the President stated that U.S. interests were not in alignment with the Paris Agreement, he then declared the U.S.'s commitment to environmental policy. He left the door open to negotiate terms of a future agreement, which in his estimation, are fairer to the U.S., its workers, its businesses, and its taxpayers. He called on Congressional Democrats to put forth a deal and indicated his willingness to work with them so long as they kept the American people's welfare and its businesses at the center of discussions. How these conversations will unfold and who will be a part of the discussions is still uncertain. The ripples are just starting across the country and the globe. The U.S.'s departure from the Paris Agreement will not eliminate action by states, cities, and corporations to curtail the effects of climate change and could further energize and consolidate efforts.
Some business, government, and foreign leaders were quick to respond after the announcement. Tesla's Elon Musk made good on his threat to exit the President's economic advisory council via tweet shortly after the press conference. MAPI member, Xylem confirmed its strong commitment to the Paris Agreement. Pittsburgh's mayor also tweeted its support of the Paris Agreement despite the President's references to the city during his speech. And the new French President Macron wasted no time in responding to the announcement.
In the opening remarks by Vice President Pence and throughout the President's comments, the emphasis was on "unfair trade practices" and making American jobs, people, and energy our number one priority. The administration reasserted "American sovereignty" and the need to protect the U.S. from future intrusions on its sovereignty and legal liability. Whether the regulations and responsibilities of the agreement or their removal, turn out to be what handcuffs or accelerates the economy and American interests will unfold in the months and years to come. For now, the message was clear: the administration is putting America first.