For US President Barack Obama, who has made climate change one of his administration’s top priorities since first entering the White House in 2008, the agreement reached last month in Paris was a vindication of efforts to build the legacy he wishes to leave behind.
It was also a win for climate change advocates – and one that was widely applauded around the world. The reaction back home was much more polarised. When the COP21 talks began, Republican presidential candidates slammed Obama for caring too much about the climate, criticising him for giving it priority over issues such as terrorism and the ISIS threat in the Middle East. Most said that if elected president, they would undo all the actions the current administration has taken to fight climate change. One candidate went so far as to mockingly refer to the President as ‘meteorologist-in-chief.’
For people who trust the vast body of data hinting at the role of human activity in causing climate change and its consequences – rising sea levels, frequent extreme weather events and global warming – this stance is perplexing.
Why should the US, a world leader in many respects, take such a backwards stance compared to, say, Europe, which has been much more proactive and successful in increasing its power generation from renewable sources?
Well, Europe relies heavily on oil and natural gas imports for its energy needs, one legal expert we spoke to pointed out. The US, on the other hand, has vast supplies of shale oil and gas. It has superseded the goal of being self-sufficient to become the number one energy producer in the world.
As one other commentator observed, the energy sector has in the past decade turned into a major contributor to the country’s gross domestic product. Big industry has invested heavily to develop production and distribution capacity in America’s oil and gas sectors during that time. It should therefore be no surprise that the industry and the politicians it lobbies seek to protect those investments.
But does being blessed with natural resources mean the US is damned in terms of shifting to clean energy?
Judging from the initiatives of the corporate world, institutional investors and fund managers alike, the answer seems to be a clear ‘no.’ All three groups have taken steps to mitigate the effects of climate change through environmental, social and governance programmes that are becoming more numerous, systematic and sophisticated all at once.
Initiatives have also been taken at the state and local levels. New York Governor Andrew Cuomo, for instance, has set a target for the state to generate 50 percent of its power from renewable energy sources by 2030.
The individual plans each of the 195 signatories of the Paris Accord have committed to implementing in order to reduce global greenhouse emissions will require around $16.5 trillion of investments in the next 15 years, according to the International Energy Agency.
The US may make the transition to clean energy at a slower pace but as the legal expert we spoke to remarked: “Maybe we won’t move as fast as Europe in diversifying our energy mix but we’ve come a long way in the past 10 years. […] We might not transition fully to a renewable energy economy, but we will transition from sole reliance on conventional fossil fuel to a more diversified energy landscape.”
Infrastructure investors can play a vital role every step of the way.