Trump’s possible withdrawal from the Paris Climate Change Agreement. The end or a new beginning for sustainable business?

Andrew Woodward, Principal, Climate Communication, Climate Reality Leader and Master of Environmental Management Student at UNSW.

Will he? Won’t he? Will he – won’t he – what? Will Donald Trump pull out of the Paris Climate Agreement? Based on his wildly erratic Twitter behavior, you would have to think that will come down to what side of the bed he gets out of in Mar-a-Lago – his ‘weekender’ in Florida. So far, he has spent a quarter of his presidency there. By the way, Florida is the state to be first and worst impacted by climate change. Moving on.

The “he will” believers received some encouragement last week from Scott Pruitt, Trump’s newly appointed head of the Environment Protection Agency. Asked if he agreed Co2 was the primary “control knob” of global warming, he replied, “I would not agree that it’s a primary contributor to the global warming that we see”. This set off a predictable howl of condemnation. One pundit said – Pruitt’s comments were akin to the Surgeon General saying smoking wasn’t the primary cause of lung cancer. So that’s what were dealing with here. Old thinking and bad advice. The comments give insight into the lieutenants the US President is surrounding himself with.

Type “Trump Paris agreement” into Google and you get a flood of articles from late January saying, ‘The Donald’ was ready to change the course of history by Tweeting something like “Paris agreement, sad, dead, bad, au revoir, it was all a plot by the Chinese. Let’s make coal great again”. That was late January. February was eerily quiet. Then on 2 March, the New York Times reported “Top Trump Advisers Are Split on Paris Agreement on Climate Change”. In summary, the story says some want him to stick to his campaign pledge to withdraw while others, led by daughter Ivanka, want his to ditch the promise as they “fear the move could have broad and damaging diplomatic ramifications”. Well, yes.

So, what if he does withdraw? What if the self-appointed ‘leader of the free world’ decided to push send on that Tweet? What if the most powerful economy in the world with the biggest names in business get a message from 1600 Pennsylvania Avenue that climate change action, accelerating the clean energy revolution and sustainability as business-as-usual aren’t of that much interest to the New-Yorker and those at his Cabinet table? What impact will this have on sustainable business around the world? My view, not much. In Australia? Again, not much. As you were.

In the immediate term, there would be some hysteria in the media and with good reason. Symbols are important and the Paris Climate Agreement is a powerful symbol. But after the coal dust settles, I expect the world will get back to the patter of getting on with the job of addressing climate change, building renewable energy grids and becoming more and more sustainable by the day. The announcement in South Australia today demonstrates that. The Chinese will take the mantle of clean energy production leadership and the Germans and Europeans will champion the cause with innovative policy. The exiting Conservatives in the UK, coal loving Republicans and, here at home, the merry-go-round Turnbull government will fiddle while the world burns.

All teenagers are difficult. This decade will fit that category. That said, these ‘Turbulent Teens’ will lead to a better tomorrow. The might of China, Europe and the otherwise global coalition of government, business and community, dare I say it, will trump inaction. Australian business should see any withdrawal as an opportunity rather than a blow. It is like Newtown’s third law. For every action, there is an equal and opposite reaction. And if he does pull out, see it as an opportunity. If the US takes its eye off the game, what do we have to offer? Much, based on what I have seen in Australia.

Why am I confident to say, ‘as you were’? Scientific research and policy targets are embraced by an ever-increasing number of companies and the international investor community. Even the international financial regulatory community has made increasingly loud noises about the need for the market to reveal asset risk. The Bank of England and, here at home, APRA, have been making very loud noises. In short, money talks and it is talking loudly, louder than Mr Trump.

If the Trump administration doesn’t want to embrace, in fact take the lead, that’s fine. The market opportunity of decarbonising the global economy is becoming not just apparent to business but more importantly a number are building not just their resilience towards climate risk, but rebuild business purpose and strategies to identify the new markets, new industries, and even new jobs. That’s the opportunity for Australia.

Currently, there are many more institutions and many more agreements that have come into being right across the global stakeholder community that underpin the Paris agreement. Most of them don’t have the United States as a party. Rather they are, for example, between Australia and other countries. The world will get on with the job. There’s a few other points worth noting. Paris isn’t a black-and-white agreement that prescribes. There’s plenty of flexibility which the US can utilise to change but remain. About three quarters of countries that committed to Paris have since ratified it domestically and that grows by the week. Oh, and did I mentioned that former President Obama “Trump-proofed” the Paris climate change agreement.

A week or two ago, Trump was reported to have said that undoing or replacing ‘Obama-care’ was a very difficult task. “I have to tell you, it’s an unbelievably complex subject,” Trump is reported to have said in a meeting with the nation’s governors. “Nobody knew that health care could be so complicated.” Well, (a) yes they did and (b) wait until you get that manila folder marked “Paris Climate Change Agreement Withdrawal”. That’s the easier document to deal with. Just say Au Revoir to it and honour the Paris Climate Agreement, keeping America competitive and getting the world more sustainable more quickly.

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