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Major Setback to Paris Climate Agreement

When President Trump stood behind the lectern at the White House Rose Garden on June 1, the world knew what was in the offing. Keeping his poll promise, he announced the withdrawal of the United States from Paris Climate Agreement.

In his withdrawal speech, President Trump spoke of the threat the Paris Climate Agreement posed to American economy and its implications for the industries and manufacturing jobs there overs the years. He also challenged the actual merits of the deal and the environmental gains it would incur. He cited the examples of countries like China and India who, he believes, would be allowed to keep polluting for several years and appropriate “billions and billions and billions of dollars” in foreign aid to take on climate change while subjecting America to economic restrictions. However, it wouldn’t be wrong to say that he is withdrawing to appease the far-right supporters and salvage the mining industry lobby that otherwise would have been hit the hardest if the US were to continue being a party to the treaty.

While leaders all over the world expressed disappointment and concern over what they called “untimely and ill-conceived decision”, many of them were quick to reaffirm their respective countries’ commitment to the accord. German Chancellor Angela Merkel supported the agreement and said “This decision cannot and will not deter all of us who feel obliged to protect this earth”. Several multinational corporations, multilateral agencies and public figures reiterated their support of the Paris accord and pledged to do everything possible to tackle the climate change. However, any of this is unlikely to undo the damage that the American exit would entail.

The importance of US to any environmental pact is significant. It has led the industrial world for more than a century now, and is partly responsible for the current environmental consequences that are gripping the planet today. Given the historical responsibility, the USA has a moral obligation to pour in more efforts and resources to address this problem than the others. Although it has lost the title of being the biggest emitter of greenhouse gases to China, it stills remains the second largest polluter. In 2013, its Green House Gas (GHG) emissions stood at 6279.83 MtCO2e i.e. 13.87% of the global total. Without its active involvement, the future of any deal remains uncertain. In fact, its exit has only shaken the foundations of an agreement that was precariously stitched together in the nick of time.

The agreement has had its share of criticism since its inception. Environmentalists have argued that it doesn’t subject major polluters to binding commitments. According to James Hansen, a renowned climate change expert, there is no enforcement mechanism or provisions for penalty in case of non-compliance. It merely relies on Intended Nationally Determined Contributions (INDCs) to set national GHG emission targets and “Name-and-Shame” formula to condemn violators. Critics in developed countries say that it gives precedence to the interests of the developing countries; it provides funds to poor countries in the name of adaptive financing by taxing the rich countries. Studies also point to the fact that nationally determined contributions made during the summit are well short than needed to curb the global temperature rise to below 2 degree Celsius pre-industrial levels.

In spite of all its flaws, non-binding nature and lack of penalties for violators to name a few, the deal in its present form represents our only chance to limit the climate change. The idea behind the deal is to bring as many countries on board as possible. Its non-binding nature and lack of penalties for violators are meant to address the concerns of developing countries. Past experiences have proved that agreements stipulating binding commitments failed to materialize owing to lock down during negotiation phase. Prospects of punishments in case of failure to achieve targets makes it difficult for developing countries to sell the benefits of such an agreement at home. By addressing the aforementioned concerns, the deal has been successful in convincing the developing countries to join the common cause.

Limiting emissions, without slowing economic growth, requires massive investments in renewable energy and cleaner fuels. It is estimated that the global cost of switching to renewable energy stands somewhere around $37.55 trillion. The prohibitive cost of switching from traditional power to green power in a relatively short period of time is simply unbearable for poor and developing countries. This proposition holds good especially for African and South Asian countries that are still grappling with issues like malnutrition and lack of access to basic necessities. It would be outlandish to expect them to fund the adaptation on their own. Nevertheless, it isn’t just about the costs involved. The sheer logistical challenges involved in such a massive migration wouldn’t be possible without disrupting the status quo.

The deal strives to resolve this dilemma by establishing the Green Climate Fund which will provide adaptive financing over a period of time to developing countries. By contributing monetarily to this fund, rich countries would be able to offset their historical wrongdoings to an extent. Thus, the deal has been successful in allaying apprehensions on both sides without compromising on climate change agenda.

The departure of the USA from this agreement will surely deal a heavy blow to the global consensus. But, not all is lost. Taking into consideration the statements of other world leaders, it can be said that the deal won’t fall apart anytime soon. Even within the US, there are pro-agreement sentiments. Governors of more than 12 states and Puerto Rico have joined United States Climate Alliance to uphold the commitments within their borders. Similarly, 10 other states and District of Columbia have pledged their support to the agreement. Hence, we can conclude that there are still reasons to believe that the global consensus will remain intact and the fight against Climate change shall continue. But Mr. Trump will surely find himself on the wrong side of the history.

Varun Sharma
Senior Associate
Fiinovation

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