It's a drama. The Paris Agreement, a result of millions of hours of arduous negotiations, has been tailored extremely diligently to satisfy the diverging needs of the largest polluters China, the USA, and India. It finally got endorsed and signed by 195 nations around the globe. Now the USA - in a move that is largely based on 'alternative facts' and that doesn't seem to even make any economic sense - have decided to join the only two countries that stay away from Paris: Nicaragua and Syria.
As CEO of a global sustainability solutions provider, with a staunch mission to enable robust collaborations to fight climate change, this is a deeply frustrating moment.
At the beginning of this year, I held a webinar which posited that Trump is a climate hero in disguise. Can we still find anything positive about this unbelievable decision, any ray of hope? Well, yes we can. In fact, we have to, as this is the worst moment in history to give up the fight against climate change. So let's dig deep:
During travels to various countries over the past few months, I've realised that from the shopkeeper in Cambodia to the surfer-dude in Australia to the hotel clerk in South Africa to the young mother in the Netherlands, most people around the world agree: Donald Trump is mad. And whatever he does or says must be wrong. In this sense, his withdrawal from Paris may as well be seen as a strong endorsement: Never in my life have I seen such a huge flood of articles, blogs, discussions, tweets on the importance of fighting climate change. All of a sudden the world seems to be electrified and excited, rallying behind a topic that until May 31 appeared utterly unsexy.
The reaction of politicians and business was equally strong: The President's decision to withdraw seems to be rooted in another era, one that even some of the world's biggest emitters have already left behind. He is now facing some unlikely opposition to the idea of exiting the climate agreement: Exxon Mobil Corp. and ConocoPhillips, two of the world's largest oil producers, have voiced their discontent about leaving the negotiating table. their motives are not merely altruistic: rather, they are bowing to increased shareholder pressure, as well as the rising fear of 'stranded assets'. Tesla's Elon Musk and Walt Disney's Bob Iger, key members of the White House's business councils and illustrious business leaders, have announced their departure from the advisory groups. Leaving the accord has also increased tensions in international relations, with many European, Asian and even American leaders issuing statements of disapproval. Former US Secretary of State John Kerry went as far as to underline how “the president who talked about putting America first has now put America last." Trump, who uttered to serve “the citizens of Pittsburgh, not Paris", is confronted by the Mayor of Pittsburgh, who pledges to honor the Paris Agreement; this signals that while the US Federal Government walks away from the global agreement, sub-national bodies, US states and cities are very much still on board.
In addition to corporate heavyweights and political counterparts in the Land of the Free, objections to pulling out of the Paris Agreement are visible at a grassroots level: recent polls show that a majority of Americans in all 50 states support US participation in the climate deal - including Trump voters - by large margins.
Over the past 18 months, everybody active in the climate space shared the same mantra: Paris is historic, and finally governments are shifting gear and start solving the problem. Only in quiet moments over a few beers did some of us dare to express concerns: many governments around the world are weak, decision-makers are changing fast, real climate leadership is rare, and honestly speaking, very little has happened so far in terms of implementing the Paris Agreement on a national level. The international rules to make Paris operational are largely sketchy at most, and delegates once again are bogged down in hours and hours of negotiations.
More worryingly, the role of the private sector in the Paris framework is highly unclear. Certainly, private-sector participation is mentioned over and over, and the private sector is expected to help governments meet their Nationally Determined Contributions. And of course the private sector is heavily involved in advancing clean technologies, such as renewable energy, building efficiency, or electric vehicles. However, what direct benefits would private companies derive from investing in emission cutting projects under the Paris Agreement? Unlike Kyoto, which allowed the private sector to invest in projects under the Clean Development Mechanism to directly reduce emissions at the source, Paris is mainly designed as a government-to-government mechanism.
Donald Trump's White House Rose Garden speech on June 01 proves the case that governments are notoriously unreliable as a partner to fix climate change anytime soon. Governments tend to be laggards, not leaders. Now it's brutally clear: We can't just rely on the commitments made by governments in Paris, and hope that Paris will bring change. A Trump can appear anytime, anywhere, and tear up the contract with the stroke of a pen. Thanks to Trump, we are waking up from this dream after only 18 months.
This is exemplified by the Carbon Offsetting and Reduction Scheme for International Aviation, brought into life last year by the International Civil Aviation Organisation (ICAO). The historic 2016 agreement states that, from 2020 onwards, any growth in CO2 emissions of air traffic must be carbon neutral. Since air traffic is growing very fast and technical options are limited, offsetting is the only way to comply with the ICAO agreement. Studies predict that this will create an immediate demand of some 170 million tons of CO2 in emission reductions, ramping up to nearly 1 billion tons of CO2 per annum.
However, the implementation of the ICAO deal is currently stalled - much to the joy of many airlines, who would soon have to pay for their emissions: To offset CO2 emissions, an airline would have to invest in a project that cuts emissions. Under the Paris Agreement, such an emission reduction would, however, automatically count towards the voluntary target of the host country. Otherwise, the reduction would be “double-counting", once for the airline and once for the host country.
In short: the Paris Agreement in its current form can in some distinct instances actually complicate climate action! There is hope that Trump's withdrawal from the climate deal will send a clear message: To implement the ICAO deal, be as pragmatic as possible; reduce complexity; create simple, clear and resilient solutions that are as independent as possible from ever-changing government regulations
Governments realise that their creditworthiness is affected by climate change. Investors are increasingly aware that investments in projects, companies and countries that are more and more risky as markets and societies unlock from fossil fuels. Prominent tech industry executives all made it clear that they viewed Trump's decision as a huge mistake, and would continue on their path to, among others, transition their energy-intensive data centers to using 100% renewable energy. While Trump's decision may temporarily slow down the inevitable low-carbon transition, smart businesses are aware of economic trends that continue to point to the acceleration in growth of renewable energy sources.
Let's not forget that climate change is a problem for every income bracket and sector of the economy. We need to wake up to the fact that to change everything we need everyone - especially non-state actors, who can now power government efforts by rallying investors, businesses, and the public behind this shared purpose for our planet and our people. Echoing Ex-President Barack Obama's words, the principled US leadership that enabled the entry into force of the climate pact was made possible by “America's private innovation and public investment in growing industries like wind and solar." States, cities, and businesses can today fill in part of the leadership void and help the world shift gears on climate ambition. To lay testimony to this, former New York City Mayor Mike Bloomberg just committed US$15 million to ensure the US will fulfill the Paris Agreement.
Donald J. Trump might have very well catalysed the greatest climate campaign in history. It gives me great pride to speak with such certainty on behalf of our global team and say that South Pole Group will be at the frontlines of this campaign. We will continue to develop our expertise in helping other pioneers navigate this increasingly complex climate space - and welcome new climate actors on board this exciting journey.