The US out of the Paris Agreement: How big of a deal is it?

As all news outlets reported widely over the last few days, the US president Donald Trump has signed an executive order suspending US participation in the Paris Agreement on Climate Change negotiated in late 2015. This comes as a no surprise. It was very clear, even prior to the US elections in November 2016 that if Trump were elected, pulling out of the Paris Agreement would be one of the things he would do that are bad for the environment.
The question remains how bad this move really is? US is the second largest GHG emitter in the world, so at face value, it pulling out of the global effort to curb GHGs seems pretty serious. However, much of the US programs for reduction of GHG emissions are not federally sponsored, but are rather run by individual or groups of states, and by some of the major cities. So, despite Trump pulling out of Paris Agreement, significant reduction of emissions, at least in some parts of the US is going to continue.
Anyway, the Paris Agreement was never about binding emission reduction targets, but about general commitment to move away from fossil fuels, and to embark on a journey towards alternative, much less emissions intensive sources of energy. The US pullout from the Paris Agreement is just a hiccup, which will only marginally slow down the process of ‘de-carbonisation’ of economies that has already started and is inevitably going to continue, and in the US too.
This pullout from the Paris Agreement is mostly bad for the US itself. The US was strongest when it was successful in conquering the hearts and minds of people worldwide, by championing good causes. Pulling out of the Paris Agreement doesn’t win the US any friends. It further speaks to the emerging thesis that the US has lost the capacity for global leadership, and that it is almost handing it out to China. And China has gladly accepted to be seen as a good citizen on climate, which does win them some hearts and minds.
So, the deal-man Trump has stricken a really bad, but not such a big deal!

Author: Tiho Ancev

Tiho Ancev is a Professor of Agricultural and Resource Economics in the School of Economics, University of Sydney. His main research areas are agricultural, environmental, natural resource and energy economics. Tiho’s main contributions have been in water economics and policy, economics of energy, economics of air pollution and climate change policies, and economics of precision agriculture and agricultural input use. He has published widely on these topics in top international peer reviewed journals. Tiho has led and contributed to national and international research projects in these research areas. He is currently the Managing Editor-in-Chief of the Australian Journal of Agricultural and Resource Economics.