On 1 June 2017, American President Donald Trump announced his intention of pulling the United States out of the Paris Agreement on climate change. What is the impact of his decision? What are its implications, and how should companies and territories respond?

While Donald Trump may justify his decision to pull the United States out of the Paris Agreement by alluding to its supposedly disastrous implications for Americans, his true motivations are in fact very different. With his approval ratings at rock bottom, President Trump has sought to reconnect with his electorate by attempting to implement his campaign pledges.

What is the impact for businesses, populations and the planet?

In recent days, Donald Trump’s announcement has stirred up an unprecedented wave of reaction. Throughout the world, including the United States, heads of state, business leaders and city leaders are expressing their “disappointment” and reasserting their support for the Paris Agreement. Many, like French President Emmanuel Macron, are even committing to scale up their efforts to keep the increase in temperatures below 2°C: “there is no plan B on climate, because there is no planet B“.

First reactions from political leaders:

… and from business leaders:  But we must not underestimate the potential impact of Donald Trump’s decision:

  • In the United States, this decision, and especially the reversal on 28 March of the climate / energy policies put in place under the Obama administration[1], could constitute a barrier to the development of clean energies and to the low-carbon transition of the American economy, one of the world’s biggest carbon polluters. With 5,414 Mt of CO2 emissions in 2015, the US is the world’s second largest greenhouse gas emitter, behind China. The greenhouse gases emitted by the United States represent 14.9% of global emissions.[2]
  • On the worldwide stage, Donald Trump’s decision will have a significant impact on funding for the Green Climate Fund, which aims to support developing countries in the fight against climate change. Although the United States pledged $3 billion to the fund, only $1 billion has so far been handed over, and Donald Trump has indicated that America’s federal government will not contribute another cent.

 

It is also worth remembering that Article 28 of the Paris Agreement states that the Agreement cannot be revoked until it has been in force for three years, which takes us to November 2019, and that a further year of negotiation is then required to allow the US to effectively leave the Paris Agreement.

In practice, therefore, the United States is choosing to abandon its leadership in the fight against climate change all the way to 2020.

What next?

Since Donald Trump’s announcement, American cities, states and companies have pledged to compensate for the federal state’s failings, and to redouble their efforts to fulfil or even go beyond the commitments made by the Obama administration[3]. On an international level, Europe, China and India have declared their intention to maintain this momentum and to take up the reins from the United States, particularly in supporting developing countries with their low-carbon transition.

Donald Trump opens up new possibilities with his announcement, thus galvanizing the other signatory countries to intensify their efforts and to devise even more effective climate strategies.

Against this background, EcoAct Group provides companies and territories with unique expertise in planning for and implementing positive change in response to the climate and carbon challenges. We will continue, with all the more conviction, to help leaders accelerate the transition in the economy and in territories.

To this end, EcoAct supports Climate Club’s call to “scale up climate momentum and action”. Founded in 2015 at the time of the Paris Climate Conference, Climate Club draws together business leaders, NGOs, foundations and opinion leaders, who work together to build a low-carbon economy and facilitate energy transition in territories

[1] Donald Trump signed his “Energy independence” executive order, nullifying Barack Obama’s “Clean Power Plan”.

[2] http://www.globalcarbonatlas.org

[3] http://www.wearestillin.com/

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