There’s usually not much the Pope, the oil industry, North Korea, and Bill Gates can all agree on. But the Paris climate accord, now abandoned by the U.S. under President Donald Trump, fits that narrow category.
Trump’s move raises major questions for not just the environment but the world of business as well. America was already a relative laggard in the increasing global race to build new industries around everything from solar panels to rechargeable batteries to wind power.
Now it may fall even further behind, analysts say, even though Trump touted the withdrawal as an “act in America’s interest [that] won’t matter much to the climate.”
“It doesn’t help,” economist Bill Witherell, of Cumberland Advisors, said of Trump’s decision to pull out of the Paris agreement. “It won’t cause a major macroeconomic problem for us right now, but over time it may make American companies less competitive. People may not want to do business here because of the perception.”
Some background: The Paris environmental accord was negotiated in 2015 and signed by 195 nations, making it the world’s first comprehensive climate agreement. It requires countries to set and meet targets for reducing greenhouse gas emissions, based on each nation’s current level of production.
Of course, even before the deal was inked, the scientific evidence was already mounting that global warming was a big problem — hence the arms race over the last decade among companies looking to exploit new “green energy” opportunities.
National governments have also played an important role in that race by investing in promising technologies that aren’t yet commercially viable in hopes of winning the lucrative new domestic industry.
Such activity actually slowed in 2016, with total global investment in renewables off by about one-fourth to about $242 billion, according to a U.N. report. Falling energy prices seem to have kept that figure in check, according to the Associated Press.
But a clear hierarchy in investment among the nations seems to be emerging, with China at the forefront and committed to a stable level of spending in the years ahead. The country was by far the biggest single spender among developed countries in 2016, at around $78 billion in renewables investment, followed by the European Union at about $60 billion, up slightly from 2015 thanks to big new projects in Germany and Britain. U.S. investment, meanwhile, was $46 billion — down 10 percent for the year, according to the U.N. report.
In January, China’s National Energy Administration forecast the country would invest more than $360 billion in renewable power generation through 2020, a pace of over $70 billion a year.
Such aggressiveness has drawn notice from other politicians around the world, including American legislators who disagree with Donald Trump’s campaign claims that global warming is a hoax. For instance, the Los Angeles Times reported, California Gov. Jerry Brown will be traveling this week to a clean energy summit in China.
The paper also dryly noted “the country’s growing role as a center of gravity in fighting climate change.”