America cedes ground in the environmental and diplomatic race

June 5, 2017

The leader of the free world’s decision to exit the Paris climate treaty crystallizes one thing – in Donald Trump’s eyes, America’s needs supersede the rest of the world’s.

But as the dust settled on Trump’s historic announcement, it is hard not to envision gleeful faces in China. Their internationalist stance is the antithesis of the current US administration with Xi Jinping seeking to stamp China’s mark on the world stage. The void left by the US provides an ideal opportunity to further exert their influence. China is swiftly becoming the most dominant global force in the deployment of renewable energy technologies and Trump’s decision will only reinforce this. In January, China announced that they would be investing $360 billion in renewable energy through 2020, with a view to create 13 million jobs.

However, the foundations are there for America to compete and indeed lead in the global green race if they are bold enough to embrace change. A recent report from the Environmental Defence Fund showed that the compound annual growth rate of employment in the fossil-fuel industry (a measurement of the average growth per year) was -4.5% from 2012 to 2015. In contrast renewable energy jobs had a rate of 6% during that period. Trump’s rhetoric suggests that the green economy and its associated regulations stifle growth, yet the statistics suggest otherwise.

Evidently, there are significant economic opportunities for the US from adopting climate mitigation technologies. Tesla for example has seen such rapid growth that it now has a greater market cap than Ford. The smart money knows where the future lies and this is because of its adoption and development of the battery technology, not in spite of. Companies like Tesla continue to place the US in pole position of the global energy and transport race that is experiencing one the greatest technological changes since Henry Ford first built the Model T. It was this very innovation that catalysed growth in the rust belt and the wider US economy. Failure to capitalize on this fast growing sector could see job creation in China that otherwise could have been in the United States. It will also give Chinese and other countries’ companies a competitive advantage in the green economy. Why would Trump want to cede this ground?

Trump’s America is now the major global odd man out- and, indeed, within wide swathes of the American polity as well. Moreover, it is also at odds with America’s long history of global leadership. No other country has contributed more greenhouse gas emissions than the US, so there is a huge moral and ethical responsibility for it to respond constructively to global efforts to tackle the crisis we now find ourselves in.

There are reasons to be optimistic. At the domestic scale, much of the environmental policy and innovation takes place at the state level. Discontinuing support for the Paris agreement is unlikely to change these dynamics with climate leaders such as California, Washington and New York. Within 48 hours of Trump’s announcement, Bill de Blasio signed an executive order reaffirming New York’s commitment to the Paris agreement. The economic and environmental case is just too strong. This is recognised by businesses leaders and policymakers alike, including Apple, Facebook, Google and even Exxon Mobil who recently penned an open letter urging continued support for the Paris agreement and wider climate mitigation.

Clearly, the tectonic plates of geopolitics are shifting. Do we stand on the brink of a new world order? With the absence of the US, China will inevitably look for a new global partner.

The EU-China climate change alliance will now be key in leading to global transition to a low carbon economy. The upcoming EU-China summit is likely to re-affirm this relationship, underpinned by greater collaboration on issues such as emissions trading where the EU has pledged €10 million to help roll out a parallel scheme.

America’s withdrawal will no doubt weaken their geopolitical standing. Can the climate deal without America for 8 years? Only time will tell. Trump stated that ‘we don’t want other leaders and other countries laughing at us anymore’. Suffice to say no one is laughing.

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