27 Nov 2017

Burning money: The US’s withdrawal from Paris

Inwook writes*

I remember my heart throbbing with anger and helplessness on 1 June 2017, the day President Trump withdrew the US from the Paris Climate Agreement. As a student pursuing a major in Earth, Energy, and Sustainability, it was a catastrophic day. Paris’s COP 21 was a historic day because it was the first time that nearly 200 countries publicly admitted that reducing carbon emissions was critical to combat climate change. Also, it was the first time that each country proposed their own realistic goals to reduce carbon emissions. I was optimistic that we might be able to prevent our planet from turning into an uncontrollable sauna until President Trump made his destructive decision.

According to President Trump, staying in the Paris Climate Agreement would cost the US many jobs and impede its economy from growing. For instance, in his speech he stated that, “compliance with the terms of the Paris accord… could cost America as much as 2.7 million lost jobs by 2025”. His main justification was to prevent unemployment in the American society since that was one of his main campaign promises. However, there is a serious error in how President Trump presented the numbers in his speech.

President Trump completely disregarded statistics unfavorable to his stance. He cited 2.7 million job losses, without considering the innovative businesses that will generate jobs, many of which will be completely new to the world. The number of jobs in the solar and wind industry has grown by 25% and 32% respectively in 2016. In addition, while 1.1 million people are currently working in the coal industry in the US, another 800,000 people are working in green technologies (only a 300,000 presently, a gap that can easily be closed after greater investments in the green sector haul in more jobs). Moreover, the future projection of the green technology industry is far more promising than the coal industry, an industry that is increasingly unpopular and likely to plummet in the near future. So, when talking about securing employment of American people, it seems that President Trump neglected people working in green technologies or any alternative energy-related jobs.

President Trump’s claim that the Paris deal is destructive for the US’s economy is factually inaccurate. Numerous studies and reports have shown positive effects of a transition towards a low-carbon economy. According to the report published by Citibank, it is true that the initial investment cost of the transition will be more expensive than continuing as business-as-usual. However, in the long run, it will save a lot of money. For example, the difference between the damage cost incurred by an increase of 2.5°C and the business-as-usual temperature increase can be as much as $30 trillion. Transitioning towards a low-carbon economy will therefore result in a positive return on the investment. Many leading global companies are already aware of this fact. Probably that is why even fossil fuel companies such as Exxon Mobil. has personally pleaded for President Trump to stay in the Paris Climate Agreement.

One of the many aspects of the global challenges that make me question the direction we, as a global community, are heading towards, the event of 1 June 2017 made me feel hopeless in our collective fight against climate change. Despite the clear and abundant evidence that global warming can be a limiting factor to the US’s economic growth, the Trump administration’s continuous manipulation of information, and hence, public opinion, through its narrative of carefully selected numbers is misleading. It is time to recognize the truth and act upon it urgently.

Bottom line: President Trump withdrew the US from the Paris Climate Agreement on the notion that the agreement would harm the US’s economy. However, this blog post argues the contrary. Staying in the Paris Climate Agreement will not be a defining factor in job loss, rather, a fruitful investment (opportunity) for the US.

* Please help my environmental economics students by commenting on unclear analysis, other perspectives, data sources, etc. (Or you can just say something nice :)