President Trump catered to the wishes of 13 percent of Americans, as well as the American Coalition for Clean Coal Energy, when he announced that the U.S. was withdrawing from the Paris climate agreement. An overwhelming majority of the population, a full 69 percent, and a majority of the population in each of the 50 American states are for remaining in the agreement. The heads of important companies like General Electric Co., The Coca-Cola Co. and The Procter & Gamble CO. also expressed their support for the accord. Even oil giants Exxon Mobile Corp. and Shell, for whom the transition to renewable sources will bring prosperity and jobs, support remaining.
Trump won’t set back American economic modernization. But unfortunately, his decision will adversely affect the poorest developing countries. Their fight against the consequences of climate change, caused by rich countries burning fossil fuels, is financed by a special U.N. fund, and the U.S. is among its important donors. Economists and businesspeople also assume that Trump’s announcement will weaken America’s position as the workhorse of global innovation and clean energy, which will presumably cost the country tens of thousands of quality, long-term jobs. Coal mining won’t create new jobs; on the contrary, current jobs are rapidly disappearing.
Despite Trump’s decision, the captains of carbon-intensive industry – firms like GE, Exxon and Shell – will continue in the reduction of fossil fuel consumption and in the invention of innovations. It will bring them savings and a better reputation among customers. Households, cities, farmers and entrepreneurs will continue to build more and more solar, wind and geothermal power stations, which will produce clean and ever cheaper energy.
The U.S. has, over the long haul, been among the world’s top countries for installed capacity of renewable resources and volume of annual investments in the industry. It is, in fact, in second place, just after China. At the end of last year, it had more wind power stations than Germany and India (globally in third and fourth place), combined. America’s top spot in wind energy belongs to Texas, one-time icon of the oil-drilling industry. Turbines with an output of 21 megawatts produced over 12 percent of Texas’ energy consumption last year. The sector employs more than 21,000 people. That is roughly a third as many employees as in the coal-mining sector in the whole United States.
International treaties and obligations are important for business decisions, but only as a supplement to domestic legislation. The Paris climate agreement allows for an official withdrawal by the end of 2019. The following year, the withdrawal deadline will run out, but a request for withdrawal can be taken back at any time. So, in reality, the matter of an actual withdrawal from the international society of the responsible ones will be decided in the U.S. presidential election campaign of 2020.
National regulations, which determine the real conditions according to which business people make their decisions, are much more important. That’s precisely why clean energy in the Czech Republic is growing slowly, even though we are a part of the Paris climate agreement. Heat pumps are installed in only 1 out of 8 newly constructed buildings. Only a couple of hundred rooftop solar panels have sprung up when there could easily be a hundredfold more. The market is ready and waiting. Reconstructions are taking place at small hydroelectric stations, but no one is getting into new projects. No one has built a new wind station since 2014. The reason is a lack of appetite for getting constructively involved in ever cheaper renewable sources.
Whether the U.S. really withdraws from the Paris climate agreement will be seen in three years. The coal industry decline on the one hand and the development of renewables on the other will, by all indications, march onward — to the beat of business. Progressive states in the union are gradually outweighing the power of the federal government. We are worse off in that regard; we haven’t yet found a leader with a clear initiative for a clean, modern economy.
Štěpán Chalupa is the Chair of the Chamber on Renewable Energy Sources.