Related Articles
Free access
Forward article link
Share PDF with colleagues

Trump left isolated by Paris climate deal withdrawal

The decision rolls back years of progress to mitigate climate change and puts him at loggerheads with major energy firms and most other nations

President Donald Trump may be seen by some as the king of Tweets—especially those in block capitals—but Emmanuel Macron (his French counterpart) is competing hard for the crown.

In response to Trump's "Make America Great Again" populist slogan, and following the president's announcement on 1 June that he would withdraw the US from the Paris climate change agreement, President Macron tweeted, in very large letters: "Make our planet great again".

In doing so, he neatly summed up the dangers of neglecting climate change, while also highlighting the US administration's isolation from much of the rest of the planet—and quite a bit of his own country—on the issue.

It remains unclear exactly what Trump will do. He has said he wants to renegotiate the Paris treaty in favour of the US, though, predictably, that has been met with a lukewarm response by key negotiating partners in Europe and elsewhere. He may even end up supporting some similar domestic climate change measures to those that exist now in the US, while shunning international cooperation over the global problem.

None of this is good news. As pundits have been quick to point out, it takes quite an effort to unite the likes of Goldman SachsGreenpeace, the Chinese government and quite a few oil companies, but the US president seems to have managed it.

Shell, for example, said it would respect the decision and work with the US government on energy policy but pointedly said that "climate change is a challenge that belongs to all of society—not one individual or one country".

Nor can he rely on investors that would once have been expected to be shoo-ins to back fossil fuel developments. ExxonMobil was forced to be more open about how climate change would affect its business, when 62% of its shareholders—including some big Wall Street names—voted in favour of a resolution to that end at its annual meeting on 31 May.

The Trump effect

So, what difference will Trump's move make in practice? It would be easy to say it is a decision aimed at his core rust-belt voters at home and will make little impact elsewhere. What it will certainly do is make the task of reducing global emissions that bit harder for the rest of the planet, if the second largest emitter is not fully on board.

Technological developments, as much as national and international policy, are driving the adoption of low carbon technologies.

Climate change policy may have got the ball rolling, but it is competitive pricing that is helping renewable energy, backed by gas and nuclear power, that is eating into the coal industry's prospects for development in countries such as China, India. Even in the US few predict a surge in coal production, whatever the White House does.

Likewise, the displacement of the internal combustion engine by electric vehicles—such as it is so far—will be dictated by issues such as range and battery cost, not just emissions legislation. Much of that, in any case, will be governed by legislation at state level, rather than by Washington—and states such as California are not on Trump's side on this issue.

It will also likely take the rest of Trump's four-year term in office to disentangle the US from the Paris legal framework—possibly exactly that length of time, depending on the path chosen. If he doesn't get re-elected then perhaps all this will look to some like it was just a bad dream.

However, it would be naïve to say Trump's decision is irrelevant. China may be making a play to become the world's climate change leader, but plenty of developing countries in Asia and Africa, where energy demand is likely to increase most in the coming years, may waiver over their commitment to green energy if the US presidency is not behind them. They may also suffer financially if US government support for low carbon initiatives is reduced, though there may be a lot of green energy funds based in the US that will be looking for investment opportunities abroad, if they dry up at home.

And should Trump be voted back into office for a second term, or be replaced by someone with similar climate change views, then a lack of US backing for joined-up international moves to reduce emissions may really start to be felt.

For the US hydrocarbons sector, Trump's keenness to maximise oil and gas production could be a boon. However, that isn't directly related to climate change legislation, but rather to the dictates of relatively short-term market demand, especially on the shale side.

For oil and gas firms thinking globally, a US pull-out from the Paris agreement is not going to change their short-to-medium term exploration strategy, when the major energy consumers and producers in the rest of the world say they remain wedded to tackling climate change.

But this is not primarily a consideration based on the bottom line. The most important figure in all this may be 409.01 parts per million (ppm)—which was the average atmospheric carbon dioxide level recorded at the Mauna Loa observatory in Hawaii in April. The figure is just under 6% higher than ten years earlier and heading towards the 450ppm that climate change scientists have said could trigger a dangerous 2 degree rise in global temperatures compared to pre-industrial levels.

Trump may think US obligations under the Paris agreement are skewed against the country's economic interests, but his critics have not wasted time in blasting the president for playing politics with the planet's future.

Also in this section
Brexit casts dark cloud over UK's North Sea industry
18 December 2017
The UK's oil and gas sector has been the focus of some sizeable asset acquisitions recently, but uncertainty over the terms of the country's withdrawal from the EU is confusing the outlook
Saudi Arabia: Into the unknown
15 December 2017
The crown prince’s domestic and regional policies are taking the kingdom along several new and uncharted paths
Happy days ahead for Tullow Oil
14 December 2017
The company's bottom line suffered when crude prices crashed in mid-2014, but a landmark maritime boundary resolution should lead to a welcome boost for company revenues