Yesterday evening, President Trump announced his withdrawal from the Paris climate protection accord. A country can only exit the accord three years after the deal enters into force at the very earliest, with the exit only becoming effective a year after that. The accord entered into force for the USA on 4 November 2016, meaning that a withdrawal will only become effective on 4 November 2020 at the earliest, i.e. exactly one day after the election of the 46th President of the USA.
We do not expect the withdrawal of the USA from the Paris climate deal to spark off a domino effect. The international community of nations will continue to observe the climate goals – even without the USA. Latest signals from China, India and Russia have already underscored this. Furthermore, the EU and China are to set the seal today on a pact to combat climate change.
Trump can expect to experience further „internal“ headwind above all from the US private sector, the US states, cities and investors. Sustainable technologies have long become global competition drivers for many US enterprises. As a result of innovation and scaling, renewable energies now strongly compete against technologies based on fossil fuels and have become a key driver of US economic growth as well as creator of multiple jobs. The transformation towards a more sustainable energy system has also reached a too advanced scale in the USA and its financing become globally too strongly interlinked for it to be stopped. Renewable energies will become too cost efficient, while energy generation from coal becomes too work-intensive and expensive. To restart the coal mines, many of which have been closed down, would also necessitate considerable start-up investment with hardly any investors willing to provide such funds. The political risk is also far too great. Furthermore, the states of the USA are far more powerful and independent than, for example, the states of the Federal Republic of Germany. Twenty-eight of the 50 American states have already defined their own regulations on climate protection, spearheaded by states such as California or Massachusetts.
We believe that the momentum already reached in the global fight against climate change cannot be stopped. The Paris climate accord will continue to exist, even without the USA. However, compensating the financial contributions from the USA will certainly represent a challenge for the international community of nations. In addition, it must be expected that, in the next three years, the USA will attempt to cripple the progress of the Paris climate deal. By making this withdrawal, the role of the USA is changing from „deal maker“ to „deal breaker“. At the final count, Trump’s decision will primarily be to the detriment of American economic interests and in climate policy terms force the USA into isolation.