As President-elect Donald Trump's transition team prepares executive orders to withdraw from the Paris climate agreement, scientists confirm that 2024 is not only the hottest year on record but the first year to exceed the Paris agreement threshold, a global pledge by 195 nations to work to keep warming under 1.5 degrees.
Withdrawing from the Paris agreement is like withdrawing from any other international security pact, like NATO. It's that serious. There are the obvious security repercussions that come with ignoring the biggest climate security threat to humanity, including the famine-causing heat waves and droughts, the loss of coastal cities from sea-level rise, and more extreme storms, floods and fires that displace millions of people and result in billions of dollars of infrastructure damage. But there are also diplomatic consequences that come with not supporting international humanitarian norms and not joining historic deal-making and unparalleled consensus.
But if that doesn't move the incoming Trump administration, perhaps economics will. Withdrawing from the Paris agreement is also like withdrawing from the G7. On the business and economic argument alone, which Trump should have little difficulty understanding or appreciating, the Paris process was a win, and to willfully unwind it is fiscally irresponsible.
There are three key reasons why the Paris agreement is good for the American economy.
First, it reduces wasteful government spending. In line with Republican belief in small government and free markets, the Paris climate agreement encourages governments, including the incoming Trump administration, to shed some of the $7 trillion that they're shelling out to subsidize the negative externalities associated with fossil fuels, such as health care costs from exposure to pollution. A wasteful 7.1 percent of the GDP is spent cleaning up after fossil fuel industries and their pollutants. That's money that could, instead, fix aging infrastructure in the United States. And with 7 million people dying every year from air pollution, those lost lives lead to lost economic productivity. The Paris process is intended to prevent these mounting mortality rates, and their associated costs, and keep alive as many productive members of society as possible. Any economist could understand the cost-benefit analysis here.
Second, it boosts American businesses. Given overwhelming bipartisan support for making things in America, the Paris deal meant that U.S. businesses could proceed apace with additional investments in clean energy, doubling down on global market assurance. In the U.S., clean energy growth is already outpacing—and this year is doubling—fossil fuel growth, while global clean energy investments in 2024 will exceed $2 trillion. Solar and wind installations are witnessing record highs, as prices drop precipitously, and they're now the fastest growing electricity sources in history. International investment in clean energy will continue to rise as China and European Union nations ratchet up clean energy portfolios and shutter fossil fuel infrastructure.
The Paris accord, and the market trends it guarantees, is making this boon possible and could further profit American corporate pocketbooks. However, we're currently outpaced by Chinese investors: China is the largest solar energy producer anywhere. And it's not stopping. The country, which remains committed to the Paris process, is investing billions into clean energy generation. And while China dominates the market share of the business opportunity here, the incoming Trump administration is signaling that the U.S. government will be getting out of the game. What a lost economic opportunity.
Third, it supports Americans' stock market portfolios. Fortune 500 companies have long encouraged Trump to stay in the Paris agreement, since it signaled to financial investors that the clean energy track they were already on was the fiscally prudent one. And investment firms controlling more than $5 trillion in assets have long ago divested from dirty fossil fuels. Meanwhile, Wall Street firms are making the switch, dropping the very industries that Trump wants to salvage, such as coal. And why? Because the long-term return on clean energy investments are sound and substantial: Researchers at Stanford and University of California at Berkeley estimate a $50 trillion savings per year by 2050 with a switch to 100 percent clean energy.
Irrespective of incoming White House obstructionism, American companies and investors will continue to invest in clean energy while dropping dirty fuels. And American state and local governments will move forward, unfazed, firming up already aggressive goals to cut carbon emissions by 80 to 100 percent by 2050.
Everyone almost everywhere, with the exception of the incoming White House, is understanding the economic opportunity presented by the Paris climate agreement and acting on it.
The ones on the losing end of Trump's anti-Paris stick will be the American people. America could be number one in solar, number one in wind, and number one in pollution prevention and lives saved. That's greatness. That's market dominance. That's the stuff of which presidential legacies are made. And that's the win Trump should want. Paris is about clean energy markets and money. Time for Trump to start making some for the American people.
Steve Cohen is the U.S. representative for Tennessee's 9th congressional district. Michael Shank is adjunct professor of sustainable development at NYU's Center for Global Affairs.
The views expressed in this article are the writers' own.
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