There’s been quite a bit of press recently about the Trump administration’s decision to withdraw from the Paris Climate Agreement, and rightly so. The Paris Accord represented an end to the long-running battle to obtain a consensus commitment from countries across the globe to fight climate change; it is the world’s first comprehensive climate agreement. So to have the world’s second biggest polluter withdraw from that agreement is a big deal.
Or is it?
One of the key aims of the Paris Agreement is to reduce CO2 emissions to levels that keep global temperatures well below 2° C above those of the pre-industrial period, back in the 1850s. As the globe is already 1.1° C above those levels – and rising quickly – we have our work cut out for us.
To achieve this, all participating countries need to reduce their respective CO2 emissions to around 27% below their 2005 levels. Therefore, reducing overall current CO2 emissions to 21 gigatons per year by 2025 (1 gigaton = 1 billion tons). This represents a reduction of 13.8 gigatons in the next 8 years. More plainly, cutting current global CO2 emissions by more than a third. A tough ask under any circumstance. However, when you consider the ongoing need for economic growth, it is clear that this represents a monumental challenge.
Trump left of his own accord
Until Trump withdrew the USA from the “Accord de Paris” (see what we did there?), every nation except two had committed to the agreement. There was a real sense that the responsibility was being shared to overcome this huge global challenge.
The USA now sits uncomfortably with rather odd bedfellows Syria (which is in the middle of a protracted civil war) and Nicaragua (who didn’t sign up to the agreement, as it argued the measures didn’t go far enough). They are the only abstainers from the Paris Agreement.
But what is the actual impact of the USA’s withdrawal from the Paris Agreement targets?
On the face of it, it appears hugely significant. The USA is the world’s second largest polluter and is responsible for 15% of all CO2 emissions, which means that the target of reducing total global emissions to 21 gigatons becomes seemingly much harder. It requires the remaining countries to make up the difference of nearly a gigaton by increasing their required overall reduction from 50% to 60%.
But what is lost in these numbers, is that the bulk of the proposed reduction in CO2 emissions was never going to come from the USA in the first place.
While they are the second highest polluter, the USA is already halfway to achieving its target. In the past 12 years, the US has reduced its CO2 emissions by 3/4 gigatons; that’s an impressive 10% of the entire global reduction!
And they are not alone in their efforts. Ukraine, Greece, Italy, the United Kingdom, Spain, Puerto Rico, and Denmark have already exceeded their reduction targets. 34 more countries have reduced their emissions below the 2005 mark and are well on their way to reaching the 2025 target.
Meanwhile, the majority of other countries have increased their emissions, and many of them have more than doubled.
These gains are really promising and prove it can work. But just four countries (India, Saudi Arabia, Iran, Indonesia) have cancelled that out with their emissions. Worse still, China makes these guys look good – they’ve pumped an additional 4.5Gtons back into the environment.
Will the free market lead the way?
Economically, our atmosphere can be considered a global public good, a resource freely available to all for their use. And global warming is a result of free-riders abusing their right to pollute.
The Paris Agreement is an attempt to put boundaries around what is acceptable so that global peaking of greenhouse gas emissions occurs as soon as possible in order to limit global warming. And in that context, the USA’s withdrawal can only be reasonably considered a blow to the agreement.
But there’s a twist in the plot. It seems the US economy generally disagrees with Trump’s decision to withdraw from the Paris Agreement. Public opinion in the USA supports involvement, even amongst Trump supporters. Businesses also made their case to remain in the agreement, if unsuccessfully.
But even in the face of the apparent failure to change the President’s mind, many US companies have committed to delivering their carbon reduction targets, regardless of the Government’s decision to withdraw.
So, Trump’s free market is already on the path to meeting its emissions targets. That’s a rolling train that even Trump may struggle to halt.