Time to Bid Adieu to the Paris Climate Agreement

COMMENTARY Energy Economics

Time to Bid Adieu to the Paris Climate Agreement

May 19th, 2017 3 min read
COMMENTARY BY
Nicolas Loris

Fellow in Energy and Environmental Policy

Nick is an economist who focuses on energy, environmental, and regulatory issues as the Herbert and Joyce Morgan fellow.
Compliance with the Paris agreement will cost the global economy trillions of dollars over the next 80 years. iStock

Key Takeaways

Senior officials within the administration remain divided on the issue, but the decision is clear: Get out. Get out now.

International approaches to mitigate manmade global warming are not only prohibitively costly, but unquestionably ineffective.

No matter what beliefs you hold regarding global warming, the climate impacts of Paris are meaningless.

After campaigning on a promise to "cancel" the Paris climate-change agreement, President Trump announced he would make a decision in the coming weeks.

Senior officials within the administration remain divided on the issue, but the decision is clear: Get out. Get out now.

The agreement aims to limit global warming to 2 degrees Celsius above preindustrial levels, largely by switching away from affordable, dependable energy sources that emit carbon dioxide to expensive, intermittent ones. For the U.S. contribution, the Obama administration vowed to limit greenhouse gas emissions 26 to 28 percent below 2005 levels by 2025.

Time for a reality check. International approaches to mitigate manmade global warming are not only prohibitively costly, but unquestionably ineffective.

First, CO2-emitting fossil fuels provide approximately 80 percent of the world's energy needs. They do so because they're affordable and reliable. They are a critical catalyst in making our lives more comfortable, cleaner and healthier.

Switching over to more expensive alternatives won't come cheap. Regulating or taxing fossil fuels to reduce their use will raise energy prices. That will harm families multiple times over, since energy is a necessary component for almost everything we do in life.

In the United States alone, climate change regulations would increase electricity expenditures between 13 and 20 percent, resulting in an overall average loss of nearly 400,000 jobs and total income loss of more than $20,000 for a family of four by 2035.

Similar costs would reverberate throughout the global economy. Compliance with the Paris agreement will cost the global economy trillions of dollars over the next 80 years.

Proponents of international argument say that's the necessary price to pay to protect the only earth we have for our children and grandchildren. They say the alleged costs of manmade climate change could dwarf the costs of higher energy, making Paris a climate insurance policy.

This is wishful thinking. No matter what beliefs you hold regarding global warming, the climate impacts of Paris are meaningless.

Even if every country met their respective commitments in Paris -- a big if, considering there are no repercussions for shirking, and the world's largest emitter, China, has already significantly underreported its CO2 emissions -- the temperature reduction is practically nonexistent. The Massachusetts Institute of Technology's Joint Program on the Science and Policy of Global Change projects that the Paris agreement will avert a meager 0.2 degrees Celsius of warming by the year 2100.

One reason why Paris will be so ineffective is the threat of energy poverty among the world's poorest citizens is much more imminent and real than the undetermined risk of climate change. Seventeen percent of the world's population -- more than 1 billion people -- lack access to electricity. Thirty-five percent have indoor cook stoves that burn wood and animal dung for their fuel, which have serious public health consequences. Developing nations want affordable, dependable energy to raise their standards of living, and countries such as India, China and Indonesia need to use a lot of coal to get there.

Proponents of Paris say the momentum of green energy is irreversible and coal's demise as an energy sources is inevitable. If that's the case, then why do we need to stay in Paris? If market forces dictate a shift away from conventional fuels towards renewable ones, so be it. We'll all stand to benefit from innovative, competitive energy technologies.

But when governments and international bodies force it upon us with taxpayer-funded subsidies and top-down regulations, only the well-connected stand to benefit.

It's no surprise to see big businesses -- even ones that Paris would ostensibly hurt, such as big oil and big coal -- support the international agreement. Industries want a seat at the table ensure their own bottom line is protected or that the regulations hurt them less than they would their competitors

Smaller businesses will lose out. And so will the rest of Americans -- both as taxpayers and energy consumers.

One-hundred seventy countries signed onto Paris, and yes, withdrawing would put the Trump administration at odds with many foreign leaders. But as the old adage goes, "If all your friends jumped off a bridge, would you too?" Groupthink isn't a credible excuse to stay in an extremely costly, futile agreement.

The international climate plan is forcing countries to jump off a cliff economically for no climate benefit. Remaining in Paris perpetuates a message that is fundamentally anti-development in nature and therefore damaging to American interests and opportunities.

President Trump campaigned on the promise of getting out of bad deals. It's time to make good on that promise.

This piece originally appeared in ArcaMax