Markets will help keep the world’s climate hopes alive in 2017 and beyond. Donald Trump’s victory in last week’s presidential election will make him global warming’s denier-in-chief. He has dismissed the scientifically proven phenomenon as a “hoax” and “created by and for the Chinese in order to make U.S. manufacturing non-competitive.” It’s a huge blow for reducing emissions – the United States is the world’s second-largest polluter. There are, though, reasons to be hopeful.
It might not seem that way. Trump is already looking for a way to speed up the four-year process of taking the United States out of the 2015 U.N. Paris accord, according to Reuters. His scramble to back out of the pact comes as the 200 countries that signed it meet in Marrakesh, Morocco, to discuss next steps.
Trump also wants to overturn a series of executive orders issued by President Barack Obama that sought to curb greenhouse-gas emissions. Fellow climate-change doubter Myron Ebell is a favorite to run the Environmental Protection Agency. And the Alliance of Automobile Manufacturers is already lobbying for Trump’s administration to give the industry some relief on emissions rules.
These actions would be a huge setback for the environment. But the Trump-led federal government is not the only force that matters in the fight to prevent dangerous global warming. For starters, unlike with trade deals, pulling out of the Paris accord will not kill it. Plenty of other countries, including China – the biggest polluter – intend to stick with the plan. That should reassure companies investing to bring new green products to market.
Many U.S. states and cities have also committed to reducing greenhouse gases; New York City, for example, pledged an 80 percent cut by 2050. Such goals help attract innovative people and firms working on the technologies needed to help avert climate disaster – from smart use of tech and big data to far larger projects such as building autonomous and electric vehicles. Some 75 percent of all greenhouse-gas emissions either emanate from or are supplied for urban areas, making cities’ action crucial.
Trump can’t stop renewable energy from going mainstream, either: wind, solar and hydroelectric power have accounted for more than half of new capacity added each year since 2013 and should outpace fossil fuel by four-to-one by 2030. Merely cutting excessive use can reap benefits quickly. The American Council for an Energy-Efficient Economy, a clean-energy think tank, has calculated that U.S. utilities’ investments in energy efficiency created over $2 in consumer benefits for every dollar spent.
Meanwhile, a small but growing number of companies is proving there’s a financial benefit to going greener. Over a five-year period, 62 companies between them cut their emissions 29 percent and grew their businesses 26 percent, according to financial not-for-profit research group CDP. Electronics firm Philips already sources all its U.S. power needs from renewable energy. And powerhouses like GE are growing such businesses at a fast clip.
On top of that, more than 1,200 of the world’s largest companies now use their own carbon prices to guide investment decisions. That’s up from just 35 companies four years ago, according to CDP, which represents 827 investors with over $100 trillion in assets who want greater transparency on climate risks. None of that will disappear when Trump moves into the White House.
Some of the new president’s policies will even inadvertently help the cause: Trump’s $1 trillion-plus infrastructure program should spur environmentally-friendly upgrades to the nation’s water works and highways. Green investment should also benefit as U.S. companies get amnesty on $2 trillion or more in profit they keep overseas to avoid double taxation.
Throwing President Obama’s climate legacy on the coal fire is a bad move both from both an ecological and economic perspective. But the fight against climate change is far from dead. A new, retrograde U.S. climate policy may just turn up the heat on other players to up their game.
This view is a Breakingviews prediction for 2017. Click here to see more predictions.