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Oberthür and Wyns on President Trump’s Climate Withdrawal: The Opportunity for Europe

In this article Sebastian Oberthür, co-editor of Decarbonization in the European Union and series editor of The European Union in International Affairs, and Tomas Wyns discuss how President Trump’s withdrawal from the 2015 Paris Agreement offers Europe the opportunity to advance the new climate economy.

US President Trump’s anticipated, yet regrettable, announcement on 1 June to withdraw his country from the 2015 Paris Agreement on climate change, which put the world on a path to a low-carbon future has reverberated strongly both at home and abroad. It drew immediate condemnation from almost all sides. It also exposed President Trump’s “America First” slogan to be an “America Alone” self-centred doctrine. While the global community has since mulled over the inconsistencies and inaccuracies present in Trump’s announcement, its full effects are far from clear and will depend on how governments and non-state actors around the world will react in substance.

The immediate damage of the announcement seems rather limited. In the US, a U-turn in Federal climate policy, undoing the commendable achievements of the Obama era, had already been initiated and is well underway. Internationally, no other country has so far followed the example of the US or taken it as an opportunity to weaken its commitments. On the contrary, many have reaffirmed and reinforced their commitment to the Paris Agreement in response, including some of the largest global polluters like China, India, Russia and the European Union (together accounting for more than half of global emissions).

Longer-term, more indirect effects remain more uncertain. On one hand, it is possible to expect industry outside the US to broach competitiveness concerns even more, climate sceptics to feel more emboldened, and governments less enthusiastic to find additional reason to waver from their own climate commitments. On the other hand, the Trump announcement may boost the determination of pro-climate forces worldwide, including amongst US state and local governments, businesses and civil society.

Where the scales may tip may well depend on how pro-climate actors seek to advance the new climate economy to ensure its success. The battle is an economic one. Now more than ever is the time to prove the promise of the new climate economy – it’s the economy, stupid!

As a long-established international climate leader, the European Union should take up the challenge and reap the accompanying opportunities. To counter President Trump’s narrative and defeat its intended effects, Europe must lead in forging the new climate economy through focused domestic investments and the extended use of its soft-power diplomacy.

This impasse presents Europe the opportunity to develop and implement an integrated strategy for the climate neutrality of its Single Market – still the world’s largest market – and hone its innovation capacity. This would require a re-alignment of public investment policies at both the supranational and member state levels towards advancing the climate transition. To decarbonise the economy by 2050, investments will play an essential role. More room for investments that foster the new climate economy needs to be created, investments that lock-in the old economy need to be phased out and smart incentives for investing into energy efficiency, renewables and the circular economy need to be enhanced. The just transition away from coal is part of this equation, beginning with a phase out of coal imports from the US (accounting for about 10 per cent of EU hard coal consumption).

A second major plank of an integrated strategy for carbon-neutrality would consist of initiating a more proactive industrial and innovation policy for decarbonisation. A mission-oriented industrial strategy is needed to deliver advanced low-carbon products, processes and business models along the manufacturing sectors’ supply and value chains. This would not only enable a dramatic reduction of greenhouse gas emissions, but would also boost Europe’s industrial sectors into a competitive new low-carbon economy.

To make the move toward the new climate economy irreversible, deploying climate solutions globally should be a central task for European diplomacy over the coming years, building on its robust soft-power tools. Beyond the UN process and the Paris Agreement, it means working with international financial institutions, sub-national actors, businesses and civil society, as well as bilaterally with other countries to green investments and economic development, and advance research and development.

President Trump’s announcement to withdraw from the Paris Agreement may well turn out to accelerate the global climate and energy transition. For this to happen, the rest of the world needs to redouble its efforts to advance the new climate economy. Europe needs to be a vanguard in this movement – the potential economic and political benefits must not be wasted.