US President Donald Trump said on Thursday he will withdraw the nation from the 2015 Paris climate agreement, bucking a widely supported international treaty attempting to limit global warming by decreasing carbon emissions.
“In order to fulfill my solemn duty to protect America and its citizens, the United States will withdraw from the Paris climate accord,” Trump said. “We’re getting out.”
Trump made an economic case for his decision to renege on one of former President Barack Obama’s landmark achievements, an agreement in which 197 countries pledged to limit global warming to 2 degrees Celsius by shifting fuel sources away from those that heavily emit greenhouse gases. He said the climate agreement “disadvantages” the US by putting its vast energy reserves “under lock and key,” costing the economy $3 trillion in lost GDP by 2040.
The move was immediately condemned by government leaders around the globe, not least the US’s fellow G7 members, with France, Germany and Italy jointly stating their regret at Trump’s decision and dismissing his suggestions that the deal could be renegotiated.
In the US, 82 mayors rebelled against the decision, publishing an open letter vowing to “adopt, honor, and uphold the commitments to the goals enshrined in the Paris Agreement”.
In the investment community, Trump’s words also caused consternation.
“The Paris agreement enables us to manage material risk and build opportunity in our investment portfolio. Supporting its goals ultimately benefits our members and their long-term retirement security,” said Marcie Frost, chief executive of the California Public Employees’ Retirement System, adding that backing the deal “makes financial sense”.
Last month, along with 282 of the world’s largest investors representing more than $17 billion of assets under management, CalPERS was one of the signatories of an open letter to President Trump urging him to stick with the climate accord.
Fellow pension California State Teachers’ Retirement System struck a similar note following Trump’s announcement, stating that it would remain “steadfastly focused on our commitment to advancing long-term sustainability on a global scale”.
Blue-chip names including Allianz, Goldman Sachs and JPMorgan also voiced their disapproval, and Ceres, a sustainability-focused nonprofit backed by more than 130 institutions including BlackRock, Washington State Investment Board and TIAA-CREF said the decision “goes against the interests of hundreds of investors”.
“Withdrawing the US from the Paris Climate agreement puts America last,” argued Mindy Lubber, its chief executive and president.
Make the planet great again
The president said the US will “cease all implementation” of the US’s nationally determined contribution to reduce its emissions by 26 to 28 percent from 2005 levels by 2025, and its commitment to the Green Climate Fund, to which the US had pledged $3 billion and paid $1 billion so far.
As the world continues to warm, with last year being the hottest on record, the private sector has urged Trump and other global leaders to act while pointing at the investment opportunity climate change brings forward.
Global and US costs to develop solar and wind energy have become competitive with fossil fuel sources. US companies also have a role in exporting clean energy technologies, evidenced in a deal agreed yesterday where General Electric will manufacture wind turbines in Vietnam for a project valued at $2 billion as part of the Southeast Asian nation’s goal to produce more than 10 percent of its power from renewable energy by 2030.
However, these benefits did not sway Trump’s thinking.
“As president, I can put no other consideration before the well-being of American citizens,” he said. “It is time to make America great again.”
One of the most pointed responses to Trump’s declaration came from French President Emmanuel Macron, who, in the first-ever televised address in English by a French leader, appealed to the world to “make the planet great again”.