Scoring Business Climate Action a Dilemma as Paris Exit Looms

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By Dean Scott

The prospect of President Donald Trump pulling the U.S. out of the Paris climate pact has spurred states and U.S. companies to pledge to fill any gap in climate action. But the real gap may be in finding the right yardstick to measure companies’ often-voluntary efforts as well as uniting a loose coalition of states that have cut carbon emissions.

Trump, amid May 31 reports that a U.S. withdrawal was imminent, would confirm only that he will announce his final decision “over the next few days,” according a tweet he posted early in the day. Officials opposing or favoring U.S. withdrawal have been visiting the White House, including EPA Administrator Scott Pruitt, who favors pulling out, and Secretary of State Rex Tillerson, who has urged the president to have the U.S. remain.

Given that company actions often vary and use different baseline years to calculate their reductions, a bit of guesswork may be necessary to measure whether the U.S. is on track to meet its Paris pledge to cut emissions 26 percent to 28 percent from 2005 levels.

Broadly, two views have emerged on what the future holds for U.S. climate action if it withdraws from the 2015 Paris deal. One is that the nation would essentially be throwing in the towel on its pledge to cut emissions up to 28 percent by 2025. The other is that it might make little or no difference.

Jim Connaughton, who led U.S. climate negotiations for both terms of the Bush administration, is in the latter camp, arguing that rapid advances in clean energy technology and low natural gas prices will bring lower emissions, regardless of Trump’s decision.

“Let’s deal with the reality here, which is, what does withdrawal actually mean and what does staying in actually mean?” the former chairman of the Bush administration’s Council on Environmental Quality, told Bloomberg BNA. “I will submit to you—if you zero in on the substance here, it means no difference, or almost zero difference” in whether the U.S. more or less stays on a trajectory of lower emissions.

Policies Gone Today May Return Tomorrow

That said, plenty of analysts say Trump’s efforts to roll back much of the Obama administration’s climate regulations—from EPA power plant carbon pollution limits to more stringent vehicle emissions standards—will make an already difficult challenge of hitting its Paris pledge nearly impossible.

They worry that even with more ambition from companies and states on the forefront of climate action—from California to a coalition of Northeast states that limit power plant carbon pollution—the U.S. will fall short.

“The general picture here is that some of this shifting away from carbon stays on track in part because of these state efforts,” William Cline, a senior fellow at the Peterson Institute for International Economics, told Bloomberg BNA. “But that’s a holding action—I just don’t think we can rely on that as being sufficient over a very long period of time” to make up for a vacuum of federal climate policy, he said.

The good news, Cline said, is that utilities investing in new power plants aren’t likely to opt for coal-fired power plants over natural gas and other sources when they know Trump can serve only two terms at most. “Anybody investing in a plant has a much longer horizon than four or eight years so they have to assume” the Environmental Protection Agency’s power plant limits “are going to be back and even more forceful than before” to make up for “lost time” under Trump, he said.

Many states also are clearly using Trump’s climate policy rollbacks as fuel to spur more ambitious state action, including California. The state’s Senate May 31 passed a bill that would see the state relying on 100 percent renewable sources for electricity by 2045.

Hawaii in 2015 became the first state to commit to a similar goal by 2045. Similar legislation is being readied in other states, including Massachusetts.

Better Accounting of Actions Coming?

Christiana Figueres, who oversaw six years of United Nations climate negotiations that produced the Paris deal, told Bloomberg BNA she is optimistic Trump’s actions won’t dampen the broader signal sent by the nearly 200 nations that reached the 2015 agreement—that the world should move toward a low-carbon future.

“I think it’s pretty safe to say that a sizable part of the corporate commitment to reducing emissions in the United States will move forward, independently of whatever the U.S. federal government says, because we are now at the point” where clean energy investment “actually makes financial sense,” Figueres said.

“We are at a point where Tesla outstrips GM in market value, where solar and wind are competing against fossil fuels and where even natural gas has made coal pretty well a fuel of the past” in the United States, Figueres said. “That trend will continue independently of whatever the federal government may or may not do.”

Figueres is among those less concerned about whether more ambitious action from states, cities, and companies can be accurately captured and measured in the years to come.

“Every country as a national government submits its inventories to the climate convention every year,” she noted, referring to reporting requirements of the UN Framework Convention on Climate Change, the parent treaty to the Paris pact.

“There’s also some interest in beginning to put another data set together that would not supplant but be complimentary to the national inventories,” in what she said would “aggregate the efforts of citizens, corporations, and sub-national governments in respect of their own efforts to reduce emissions” in the U.S. but also in other countries, she said.

On corporate efforts, the World Wildlife Fund and other groups have been working with companies to essentially come up a way to assess how voluntary corporate efforts translate into emissions reductions. For example , nearly 100 companies—including Apple, Swiss Re, and Ikea—have banded together in what they call RE100, pledging to get as much as 100 percent of their power from renewable sources, some as early as 2020.

Slowing Progress Toward Paris Pledge?

But some analysts worry that U.S. progress on emissions will slow under Trump, with his policy rollbacks essentially cutting U.S. reductions to less than half of the cuts the Obama administration put on the table in the run-up to the 2015 UN climate negotiations.

The U.S. has cut its emissions on average about 1 percent per year since 2010, but even the Obama administration acknowledged it would likely fall short of its 2025 target without additional action. A January 2016 analysis by the consulting firm Rhodium Group said under the rosiest of scenarios—and assuming the Obama rules were left untouched—the U.S. could make a 23 percent emissions cut by 2025.

But the Trump administration’s actions thus far to rescind Obama’s climate agenda could cut those reductions in half. U.S. emissions would likely still decline by 2025 under Trump, but only in the range of a 10.2 percent to 12.6 percent reduction from 2005 levels, according to a May analysis by Resources for the Future analyst Marc Hafstead.

A Deal Meant to Withstand Shocks?

Brian Deese, a former senior adviser to Obama on climate, sounded a note of optimism regardless of the Trump administration’s verdict on the Paris accord.

“Whatever it decides, the agreement itself will survive. Negotiators designed it to withstand political shocks. And the economic, technological, and political forces that gave rise to it are only getting stronger. U.S. policy cannot stop these trends,” Deese wrote in a May 22 essay for Foreign Affairs.

“But inaction from Washington on climate change will cause the United States serious economic and diplomatic pain and waste precious time in the race to save the planet,” he wrote.

—With assistance from Cheryl Bolen.

To contact the reporter on this story: Dean Scott in Washington at DScott@bna.com

To contact the editor responsible for this story: Rachael Daigle at rdaigle@bna.com

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