The Consequences of Leaving the Paris Agreement

Introduction

President Donald J. Trump has strongly criticized the 2015 Paris Agreement on climate reached by President Barack Obama’s administration, arguing that the global deal to cut back carbon emissions would kill jobs and impose onerous regulations on the U.S. economy. As a result, in June 2017 he announced that the United States will exit the agreement. With the United States producing nearly one-fifth of all global emissions, the U.S. withdrawal from the accord could undercut collective efforts to reduce carbon output, transition to renewable energy sources, and lock in future climate measures.

Debate over the impact of withdrawal continues. While Trump has rolled back climate regulations at a federal level, thirty-four states, led by California and New York, have undertaken their own ambitious carbon reduction plans.  

What is the status of the Paris Agreement?

The Paris Agreement was finalized at a global climate conference in 2015, and entered into force in November 2016 after enough countries, including China and the United States, ratified it. The nearly two hundred parties to the deal—only Syria and Nicaragua have failed to sign on—committed to voluntary reductions in carbon emissions with the goal of keeping global temperature increases below 3.6 degrees Fahrenheit (2 degrees Celsius), a level that the assembled nations warned could lead to an “urgent and potentially irreversible threat to human societies and the planet.”

Under the deal, countries will evaluate progress toward their goals in 2018 and, beginning in 2020, will submit updated carbon reduction plans every five years. The details on how countries’ efforts will be monitored, verified, and reported are subject to ongoing negotiations, as are the specifics of a proposed $100 billion in climate-related financing meant to help poorer countries adapt.

On June 1, 2017, Trump announced that the United States would become the only country to withdraw from the Paris Agreement. 

What is the perceived economic impact of the deal?

President Trump says complying with the Paris Agreement would impose unacceptable costs on the U.S. economy and provide unfair advantages to other countries like China and India. Trump has downplayed the threat of climate change and criticized the Obama administration’s expanded carbon regulations.

Trump has emphasized the expansion of U.S. fossil fuel production. His “America First Energy Plan” focuses on reducing the price of oil, achieving “energy independence,” tapping domestic oil sources, and creating energy-related jobs by decreasing regulation. He has also promised to end what he sees as wasteful payments to the United Nations Green Climate Fund. The United States has already paid $1 billion into this fund, with $2 billion more pledged. Faced with a choice between complying with Paris and boosting the U.S. economy, the administration asserts that “growing our economy is going to win,” according to Trump’s chief economic advisor, Gary Cohn.

Meanwhile, a number of economic analyses question whether leaving the agreement will create jobs. Protecting jobs in the oil, gas, and coal industries, some economists say, could come at the cost of investments in clean energy industries that may ultimately offer more long-term employment.

What is the withdrawal process?

The Paris Agreement states that countries must wait four years before withdrawing. However, legal analysts say that Trump could shorten that process to just one year by removing the United States from a 1992 UN treaty governing global climate talks, which the president has the authority to do without congressional backing. In his June 2017 comments, Trump said that his administration would cease implementation but explore a renegotiation of the deal to seek better terms.

Many observers also say that beyond officially rejecting the Paris accord, Trump was already in the process of effectively ending U.S. participation in it by rejecting the Obama-era Clean Power Plan (CPP) [PDF]. The CPP, which sets emissions-reduction requirements for each U.S. state but allows them flexibility in how to achieve them, was the centerpiece of President Obama’s Paris Agreement commitment.

How would it affect domestic U.S. climate and energy policy?

Trump began overturning Obama’s energy policy soon after taking office: In a March 2017 executive order, he directed the Environmental Protection Agency (EPA) to begin the process of rescinding the CPP.

Because the CPP is not legislation but rather a set of EPA regulations, the president does not need congressional approval to alter it. However, legal experts disagree over how much latitude Trump has to unilaterally abandon it. The CPP was already on hold due to a court challenge, and while the administration could decline to continue defending it in court, legal challenges will likely continue. Some experts say that any changes would have to proceed through the time-consuming federal rulemaking process.

Trump’s executive order also reversed regulations that required all federal agencies to incorporate climate change into their planning and review processes, overturned a moratorium on coal development on federal lands, and ordered a review of emissions restrictions for oil and gas wells. Taken together, these steps sharply decreased the likelihood that the United States would have met its Paris obligations. Many U.S. states and cities, led by California and New York, have committed to ambitious carbon reduction plans, but even if local governments meet their goals, overall reduction would fall short of Paris targets.

How could the U.S. withdrawal affect global climate policy?

The United States is the second-largest emitter worldwide, behind only China, and its promised emissions cuts accounted for about 20 percent of global cuts foreseen by the agreement. The United States’ European allies have lobbied hard against a U.S. exit from the deal, arguing that it would weaken its enforcement measures and undermine the resolve of other countries to make their own tough cuts. They fear that backsliding by the world’s largest economy could arrest the efforts already underway to mitigate the changes in climate that are causing expensive coastal damage. Some foreign policy experts, like former Under Secretary of State R. Nicholas Burns, say that going back on the deal could hobble U.S. clout on a suite of unrelated diplomatic issues. For CFR's Stewart Patrick, the decision "will endanger U.S. national security and prosperity by sabotaging U.S. global leadership."

CFR’s Varun Sivaram and Sagatom Saha argue that a U.S. retreat on climate would empower China to fill the leadership vacuum, ceding U.S. influence in the clean energy race and strengthening China’s hand on other fraught issues like territorial disputes in the South China Sea. Already, indications are emerging that China is forging a new alliance with the European Union to advance common climate policies without the United States. Sivaram also points to Trump’s proposal to slash funding for global clean energy innovation efforts, which could hamper efforts to develop and deploy new carbon-reducing technologies that would likely be central to achieving the goals set by the Paris Agreement.