Donald Trump’s victory in the US election has tempered the optimism surrounding the ratification of the Paris Agreement on climate change. But the president-elect may find it politically and economically difficult to reverse the country’s low-carbon transition, says Stephanie Maier.


On November 7, policymakers gathered in the Moroccan city of Marrakech for the annual conference of the United Nations Framework Convention on Climate Change (UNFCC). There was a mood of optimism among the attendees. Three days earlier, the Paris Agreement had entered into force, committing governments to hold global temperatures at less than two degrees Celsius above pre-industrial levels. The ratification of the agreement was widely hailed as an historic step forward in the battle against climate change.

Enter Donald Trump. Environmentalists were dismayed at Trump’s unexpected victory in the US election on November 8. Trump’s rival, Democratic nominee Hillary Clinton, had pledged to generate enough renewable energy to power every American home within a decade; by contrast, Trump vowed to revive US fossil fuels, scrap President Obama’s environmental protections and cancel the Paris Agreement during his campaign. He has claimed climate change is a Chinese hoax concocted to damage US manufacturing.

Since the election, Trump has softened his stance somewhat, conceding there is “some connectivity” between human action and the rise in global temperatures and professing an “open mind” on the Paris Agreement.[1] Nevertheless, he has appointed climate change-sceptic Myron Ebell, who directs environmental and energy policy at the Competitive Enterprise Institute, a libertarian think-tank, to lead his transition team for the Environmental Protection Agency (EPA). The EPA developed the 2015 Clean Power Plan, a policy designed to limit carbon emissions from coal power plants, which both Trump and Ebell want to scrap.

So will the president-elect back up his rhetoric with hard policy? And what would be the implications if the US changes course on its climate commitments? In this Q&A, Stephanie Maier, Head of Responsible Investment Strategy and Research at Aviva Investors, explores the environmental implications of a Trump presidency.


How will Trump’s election affect the Paris Agreement?

Trump has issued contradictory statements on climate change so it is difficult to tell what he will do. But even if he initiates a withdrawal from the Paris Agreement on his first day in office on January 20, the US will be legally locked in until the end of his term because the formal process to exit the agreement takes four years. Alternatively, Trump could take the US out of the United Nations Framework Convention on Climate Change – which would cancel all UNFCCC-related commitments, including the Paris Agreement – with only one year’s notice. But this would be the ‘nuclear’ option and diplomatically troublesome.

At the COP 22 meeting in Marrakech, the other members of the UNFCCC made it clear they would press ahead with the implementation of the agreement with or without the US. The Chinese delegate said tackling climate change “is a global trend that is irreversible”; while even Moscow’s delegate said Russia would stick to its commitments “even if others don’t”.[2]

What would be the consequences if the US withdraws from the agreement?

A US withdrawal would present meaningful challenges. First, the US is responsible for 17 per cent of global carbon emissions, so without its participation it will be more difficult for the UNFCCC to hit its targets. There would also be implications for climate finance. The Paris Agreement stipulates that richer countries must help emerging nations to decouple economic growth from carbon-intensive industries. The US has pledged $3 billion to the Green Climate Fund and has already committed $500 million. If Trump withdraws from the agreement, he would leave a hole in this financing initiative.  However, private capital and investment is increasingly looking to access to the investment opportunities involved in climate finance even if the government refuses to participate.

Trump has criticised the EPA and pledged to scrap President Obama’s green energy incentive schemes. What would be the implications of these policies at a domestic level?

While it is too soon to say with any certainty what Trump will do with regard to the EPA, the early signs are not good. He has named an avowed climate change sceptic to lead his EPA transition team. He has also indicated that he would review legislation such as the Clean Power Plan. Implementing these policies may be more politically difficult than Trump realises, however. Clean water and clean air are important to many Americans. Removing environmental protections will not be popular.

The change in policy direction has clearly provided headwinds for the renewable sector and a ‘bounce’ for coal. However, Trump may come to see that his pledge to revive fossil fuel industries contradicts his commitment to deregulation and free-market economics, as renewable energy is competitively priced in many locations and his plan to revive the coal industry is already uneconomic in many states. Trump’s pledge to support shale gas developers may actually aid US decarbonisation efforts by spurring a price-led shift away from coal. Likewise, his plans to invest in infrastructure upgrades may deliver environmental benefits if they lead to improvements in efficiency.

Will Trump be able to reverse state-level incentives for green energy projects?

Many city- and state-level governments in the US have already embraced green energy solutions. Major cities such as New York and Los Angeles supported the Paris Agreement and will continue with commitments to decarbonise. States will retain powers to drive through green policies. The recent California Senate Bill 32 reaffirmed the state’s commitment to addressing climate change through to 2030, which is likely to result in further support for electric vehicles for example. This is unlikely to be reversed by federal government.  

So Trump will find it difficult to reverse the momentum behind the low-carbon transition?

There is no doubt that if Trump scraps the environmental protections introduced by Obama, he will slow down the energy transition and create uncertainty for companies and investors in certain sectors. But he will not be able to singlehandedly reverse the global momentum on tackling climate change.

We have passed a tipping point, not just in terms of the scientific consensus on climate change but also the economic, financial and cultural consensus. There is widespread agreement that climate change must be tackled. According to a recent poll conducted by the University of Chicago, 65 per cent of Americans think climate change is a problem the government should address.[3] And companies, too, are becoming more forthright in demanding action on climate change. In the wake of the US election 365 companies, including Nike and Starbucks, have written to Trump urging him to honour the Paris accord.

If the US government ignores these pleas it will get left behind by other countries taking more pro-active measures to effect the transition to a low-carbon economy. As outgoing EPA administrator Gina McCarthy has put it: “The energy transition is already happening…the train has left the station”.[4]






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