Trump exiting Paris accord will harm US economy – LSE research

Withdrawing from the Paris agreement does not make economic sense for the US, a group of economists has argued, as the cost of clean energy has fallen since the agreement was signed in 2015, while the risks of climate catastrophe have increased.

Economists from the Grantham Institute for Climate Change at the London School of Economics examined the economic case for the US withdrawal, which President Donald Trump signalled in June 2017, and which will take effect on 4 November, the day after this year’s presidential election.

They found that climate breakdown would cause growing losses to US infrastructure and property, and impede the rate of economic growth this century, and that an increasing proportion of the carbon emissions causing global heating would come from countries outside the US. That gives the US a vested interest in whether the Paris agreement succeeds or fails, regardless of whether the US fulfils its own voluntary obligations under the accord.

Under the Paris accord, countries agreed to hold global temperature rises to no more than 2C above pre-industrial levels, and put forward voluntary commitments to reduce their greenhouse gas emissions to achieve that goal. The US, under Barack Obama, pledged to reduce emissions by 26% to 28% by 2025 compared with 2005 levels.

Trump’s argument for withdrawal was that the Paris accord would impose costs on the US while other countries would benefit. He said: “The Paris climate accord is simply the latest example of Washington entering into an agreement that disadvantages the United States to the exclusive benefit of other countries, leaving American workers and taxpayers to absorb the cost in terms of lost jobs, lower wages, shuttered factories, and vastly diminished economic production … I was elected to represent the citizens of Pittsburgh, not Paris.”

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The LSE economists said that was not the case, and that the US risked severe economic harm if temperatures rose above the 2C threshold, while the costs of meeting the US’s commitments under the accord were falling. The authors of the policy brief found that the commitment could be met fairly easily on current trends, as the rise of renewable energy and switch from coal to cheaper gas were resulting in lower emissions already.

They also cited research showing that if Obama’s plans were continued there would be a net benefit to the US of $39bn (£30bn) in 2030, mostly from cuts to local air pollution. By withdrawing from Paris, the US also lost any ability to influence the emissions of other countries, which are still rising in some cases, they noted.

Charles Donovan, co-author of the policy brief, told the Guardian: “What has changed since 2016 [when Trump was elected] is that we have learned more about the costs of climate change and the costs have become greater, while the investment required [to cut emissions] has fallen due to changing technology costs. The case for the Paris agreement is even more compelling as a result: the cost of inaction is higher, the cost of action is lower.”

Donovan said Republicans in the US should heed the arguments for tackling climate change. “I believe very strongly that there is a conservative case for clean energy,” he said. “Even very conservative Americans agree with clean power in surveys. There is economic logic to taking action on climate change, which helps to grow the economy and create jobs.”

He said Trump was doing a disservice to US workers by failing to embrace the Paris agreement and a green recovery from the Covid-19 crisis. “It will mean US workers stay out of something that is shaping our economic future,” in the form of clean technology, he said. “If you do not have a green recovery, you will be stuck with a lot of infrastructure that we do not need in future.”

Trump has rolled back numerous environmental regulations in recent months, culminating this week with the removal of obligations on fossil fuel producers to reduce the methane – a powerful greenhouse gas – that escapes from fracking and other fossil fuel extraction.

Myron Ebell, who is the director of the centre for energy and environment at the Competitive Enterprise Institute and is close to Trump, rejected the LSE analysis and argued for deregulation. “Trump’s most important deregulatory action to revive the economy is withdrawing the United States from the Paris climate treaty,” he said.

“While the commitments made by other countries to reduce greenhouse gas emissions are merely expressions of good intentions, which will for the most part not be achieved – although at enormous expense – the US honours its international agreements … The economic benefits of getting out of Paris far outweigh the costs.”