9 November 2016 | MARRAKESH | Morocco | Kevin Fay was in law school when Ronald Reagan was elected.
“Most of the members of the law school at the time were instantaneously suicidal, and thought the end of the world is at hand,” he recalled here this morning, as he and others struggled to make sense of the previous night’s US election, which gave the presidency to Donald J Trump and both houses of Congress to his Republican party, with which Trump, himself, has often been at odds. In Washington state, voters also rejected a carbon tax.
“The beginning of the Reagan administration, particularly in the environmental arena, was pretty ugly,” Fay continued. “But I’ll remind you it was Ronald Reagan who gave the final authorization for signing the Montreal Protocol, which is now considered to be the most successful multilateral environment treaty ever negotiated.”
It was a game-face statement – an effort by Fay, who now heads the International Climate Change Partnership (ICCP), to remind us that no one really knows what will happen next – in part because Trump offered little in the way of discernible policy on any issues, let alone environment.
International Emissions Trading Association (IETA) boss Dirk Forrister agreed.
“As the election reached its fever pitch, the climate issue never got engaged in a serious way,” he said. “We know that Mr Trump is skeptical enough on the issue that he doesn’t want to proceed with the Clean Power Plan, but the Clean Power Plan is stuck in the courts.”
NGOs expressed a willingness to work with the new president, and a hope that, once in office, he’d prove more thoughtful than his public persona.
“We cannot pretend that last night’s election outcome was anything less than deeply disturbing to those of us who care about climate stability and the role of the United States in the world,” said Nathaniel Keohane, Vice President for Global Climate at the Environmental Defense Fund. “Mr. Trump should listen to the large majority of Americans who support climate action, and to the overwhelming majority of climate scientists who warn that the time for action is now.”
“There is a belief that the incoming administration seems to have that there is a trade-off between environmental management and economic growth, in particularly climate action and economic development. The evidence is overwhelming that this is not the case and actually, if you want robust, inclusive growth, you have to act on climate change,” said the President and CEO of the World Resources Institute Andrew Steer. During a November 9 press call, Steer expressed his interest in working with the new political administration on environment and climate policy.
But as rumors spread that Trump had chosen climate-science denier Myron Ebell, of the conservative Competitive Enterprise Institute, to run the Environmental Protection Agency, a consensus seemed to emerge that the best hope now lies with individual US states and even the corporate and banking sectors, which have become more cognizant of climate risk.
“There’s a huge amount happening at the sub-national and corporate level, all of which we need to support,” Steer said.
Negotiators continued the task of developing a work plan for addressing the key issues of transparency and linking finance to reductions, but sources predicted an end to the groundwork-laying backroom diplomacy that the Obama administration had become so adept at, largely because that requires knowing what will happen in the future.
The Paris Agreement
During the election, Trump had repeatedly vowed to trash both the Paris Agreement and the Clean Power Plan, as well as to halt all funding for the United Nations Framework Convention on Climate Change (UNFCCC).
Gustavo Silva-Chávez, who runs the REDDX carbon finance tracking initiative at Forest Trends, said it’s too soon to tell if Trump’s win is a temporary roadblock or a death blow to the Paris Agreement.
“Government officials will push rulemaking decisions down the road, as they don’t know what the new administration will do,” he explained. “As a result, negotiators will focus squarely on launching the Paris Agreement roadmap.”
Jeff Swartz, of IETA, pointed out that US Secretary of State John Kerry led the back-room diplomatic efforts that got the Paris Agreement ratified early, and urged other OECD countries to fill the leadership gap.
“If Hillary Clinton would have won the US election, then everyone would have said great, the US is still going to be doing this and the current negotiating team would have been able to launch the negotiations and the behind-the-scenes negotiations,” Silva-Chávez said.
Under the terms of the Paris Agreement, any country wishing to leave must wait until three years after the agreement comes into force and give four years notice, but many Republicans have threatened to fight the treaty on legal grounds, claiming that it does not meet the criteria of an executive agreement.
Peter Graham, a former climate negotiator for Canada, admits a US exit from the Paris Agreement would leave a “significant hole” though he is cautious to assume too much at this point on how the administration will engage.
“I would hesitate that pulling out is going to be the first step. The (Trump Administration) may see reason and say we can do good for ourselves by staying in,” Graham said.
It is entirely possible, however, that the US will drop out of the Paris Agreement, and a longtime participant of the climate talks is concerned this will create a snowball effect where other countries start to slack off. He even offered a doomsday scenario in which Trump’s team remains in the Agreement simply to sabotage it.
“The Paris Agreement does not get put back in a bottle,” said Fay. “It actually requires more leadership from the private sector to figure out how they’re going to deal with it, because of the responsibility they have to their shareholders.”
He also stressed the “shared ownership and sweat equity” that had gone into the Paris Agreement, as well as the flexible pledge-and-review approach embodied in the INDC process, and expressed hope that could help it survive Republican efforts to withdraw.
“I’m not sure if [Trump] has looked at it deeply enough to know that it has all of these bedrock principles of flexibility and that kind of buy-in from countries that he’s going to need for many other things on his agenda,” he said.
He conceded that the second round of Kyoto failed largely because the United States stayed out, but also pointed out that other countries had stepped into the vacuum during the Bush administration.
The International Arena
Fay stressed the need to examine climate negotiations within the larger frame of the US role in international relations, where Trump has repeatedly vowed to be more aggressive in looking out for US interests.
“I can’t describe for you a path that’s going to get him to where he wants to make the climate great again, but I do know that’s going to happen,” said Fay. “When he goes to his first G20 meeting, and the other 19 are engaging him in a discussion, I think he will be engaging.”
Graham also notes that Trump is a fan of the deal, and the Paris Agreement is a trade deal of sorts.
“‘If you follow some of the statements and speeches of Trump and his new administration as it will be, there is a sign that they’re saying they could make a better deal than what’s done previously. So to me that’s a sign that maybe they’ll give a go at trying to stay in to make it work better, from their point of view, for the American people,” Graham said.
Focus on States
“In the US, usually, if Washington wanes, you can see the states pick up activities,” said Forrister. “That’s what brought us the California program to begin with; that’s what brought us the New England program; and interestingly, in both of those examples, the leaders in those regions found a way to bring about a bipartisan approach.”
Both California and New York, he said, developed cap-and-trade programs under Republican governors working with largely Democratic congresses.
“What do we have in place now that either cannot be altered by a presidency or is unlikely to be altered because it has its own momentum and support and gas to keep it going,” Graham said.
While still noting the critical importance of national policy signals, Director of Land-based Frameworks at the Verified Carbon Standard Naomi Swickard agrees that there is a definite opportunity for states to step up.
“States are government who can set programs, who can incentivize domestic markets,” she said. Swickard added that the ability of states in the US to drive real change is unique among countries and should be leveraged.
The Private Sector
Mike Korchinsky, who runs the Wildlife Works REDD+ (Reducing Emissions from Deforestation and Degradation) project development and management company, pointed out that, if Trump and the Republicans have any discernible policy, it’s opposition to big government.
“That could mean a number of things,” he said. “It could mean that all the activity goes private: that instead of trying to implement large national programs pushed through central government, it gets pushed down into the private sector – into the marketplace, essentially – to figure out.”
The second scenario is the states pick up the slack, “and the third scenario is that it gets clobbered, in which case all of the innovation that is happening in the US on climate will find a place to employ itself elsewhere.”
Forrister agreed, and said that corporate awareness of climate risk had risen dramatically over the last four years.
“This increases pressure on those of us in the business community to have clear visions about what it is that we want,” said Forrister. “How do we reach out an olive branch to work with both sides to try to be a constructive force in a divisive time.”
And without policy signals that spell out the rules of the game, it’s going to be hard for the private sector to make progress, said Swickard.
“The private sector can take a role, they can make progress to some extent but it’s going to be difficult for them to get nearly as far as we would without government leadership,” she said.
The private sector is also key to reaching the $100 billion per year allocated to mitigation and adaptation under the Paris Agreement.
“Most of that money is not from governments,” said Fay. “It’s from the private sector and other sources.”
The financing mechanisms guiding that money, however, are administered by governments, and it’s unclear how Trump will address them.
It’s a new political environment, Graham said. “The degree to which the Obama administration was able to foster a mood of more collaboration, learn from your neighboring states who’s found a way to make this work for business and taxpayers, I expect this will slow down a bit,” he added.
That doesn’t mean necessarily that companies will abandon sustainability and climate efforts or states won’t address infrastructure needs that are related to climate change.
“The federal government will have challenges of its own related to climate change so hopefully changing the frame in which you design these programs to say this is energy or risk reduction, might be the new way to do business with business in that political environment,” Graham explained.
And as many companies have come to see the value in greening their operations, it’s entirely possible they will continue to do so without regulations or policy signals.
“There are companies making money selling more efficient appliances, selling materials with lower carbon footprints. All of these things are part of a climate change plan but if you remove the climate change plan, they’ve been seen to be good for business,” said Graham.
“Businesses and local governments are central players today,” Steer said noting the 200 companies that have committed to science-based targets. “They’re not doing it just because they want to do the morally right thing. They’re doing it because it’s good for their bottom line, and so do local governments.”
Moreover, Nigel Topping, the CEO of the We Mean Buisiness Coaliton, said many investors are seeking to de-carbonize their portfolios, and disclosure on emissions reductions among businesses, interested in attracting these investors, is rising.
“I think we can say that by and large, businesses were pleased with the long loud signal from Paris and are now advocating for that to be rolled out locally to give them the clear signal that they can innovate,” Topping said.
Hear Full Interviews on the Bionic Planet Podcast
We’ll also be providing frequent – and maybe even daily – editions of the Bionic Planet podcast, which is available on iTunes, TuneIn, Stitcher, and here:
There you will find full interviews with most of the people cited here.
Although Trump had vowed to support the fossil fuel industry, there’s little he can do for coal, which is competing against much cheaper natural gas.
“It’s really gas that’s been killing coal, not the President,” said Forrister.
Additionally, renewable energy is now competitive, said the President of Ceres Mindy Lubber.
“One sure way to make America great is to continue increasing clean energy investments, which will continue to stimulate economic growth keeping the United States competitive in the global economy and creating jobs faster than any other sector today,” she said.
“I can’t imagine too many finance markets that would want to invest in the old coal industry,” said Fay, adding that, ironically, the Waxman-Markey clean energy bill, which failed to pass the Senate in 2009, would have received billions for new technologies and training to develop “new” (clean) coal.
Topping also noted clean energy, and how the transition presents an opportunity for investment in innovation. Citing his favorite American example, electric automaker Tesla, Topping says the company’s leadership role in energy storage and automotive technology creates massive investment opportunity. Meanwhile in China, clear policy direction is driving serious growth in electric vehicles.
“There’s a huge opportunity to be taken in the American automotive industry,” Topping explained. “It’s a question of whether this transition is seen as an opportunity to innovate and win or a risk to defend against.”
Trust Him Because He Lies
Ultimately, this election can’t change the momentum for climate action, Keohane said.
“American cities and states, workers, and businesses from Apple to Tesla to Walmart will continue to drive toward the clean energy future. This election cannot change that,” he said
Many have also found solace in Trump’s sketchy record of keeping promises.
“We heard a lot of crazy rhetoric during the campaign that, in all likelihood, will not result in action in the light of a new day, when the responsibility of running a country falls squarely on the shoulders of Mr. Trump” said Korchinsky.
“My optimism is intact, if only because there have been so many hurdles to overcome for us to get to this point,” he added. “This is just the latest hurdle, and it’s an imagined hurdle at this point. Let’s wait for it to become a real hurdle, and we’ll figure out how to overcome it.”
This story was posted early Wednesday and updated throughout the day and on Thursday.