In June 2017, when President Donald Trump announced his intention to withdraw the U.S. from the Paris climate agreement, many worried other countries would follow suit. Those fears haven’t come to pass, even as the U.S. officially exits the accord on Nov. 4 — the day after the presidential election.
If anything, seasoned climate watchers have been pleasantly surprised to see Asian nations including China, Japan and South Korea publicly set goals to reach net-zero greenhouse gas emissions before 2050 or 2060. The U.S. is the only one among the world’s five biggest economies that hasn’t made such a pledge. What explains the turn of events?
“It’s a process of systems transformation,” said Nigel Topping, the U.K.’s climate champion for the COP26 global climate conference. “When you’ve got credible pathways, you’ve got the next generation saying ‘you better bloody do it,’ you’ve got scientists saying we have to do it, then businesses and investors start coming on board and policy makers start ratcheting up ambition.”
Japan is the clearest example of that. “For the last 10 or 15 years, climate policy had stagnated,” said Yusuke Matsuo, director of business and climate at Japan’s Institute for Global Environmental Strategies. “The bottleneck was strong opposition from the industry.”
With little land to spare and few fossil-fuel reserves of its own, Japan relies heavily on imported coal and gas to meet its electricity demand and foreign oil to fuel its vehicles. Even though transitioning away from polluting sources of energy would have made economic sense for the country, it would have hurt the short-term profits of heavy industry and utilities.
That position, however, became untenable after the EU and China put forth net-zero pledges in the past year. “Countries are being forced to ask: do they want to be spectators or do they want play the game?” said Maria Mendiluce, chief executive officer of We Mean Business, a nonprofit that works with businesses to cut their emissions.
Matsuo says 150 companies are now part of the Japan Climate Leaders’ Partnership — a coalition of businesses pushing for more aggressive climate policies — and their combined revenue exceeds those of the large companies that oppose regulations to cut greenhouse gases. After Prime Minister Yoshihide Suga pledged last week that Japan would seek to be carbon neutral by 2050, many companies that were previously neutral on climate action reached out to JCLP, according to Matsuo. “Domestic pressure and diplomatic pressure enable Japan to make the net-zero declaration possible,” he said.
The U.S. is in a position to accelerate the transition that’s being embraced by a growing number of countries. What it chooses to do still matters. Japan’s net-zero target isn’t law yet and still needs to win the approval of lawmakers over the next few months. “If Biden wins, I see a clear direction for moving forward,” said Matsuo, referring to Democratic candidate Joe Biden, who has vowed that the U.S. will re-join the agreement on his first day in office.
If Trump is re-elected, he’s likely to stay the course and keep the U.S., which accounts for 15 per cent of global emissions, out of the Paris framework for at least four more years. That will embolden fossil-fuel giants like Saudi Arabia and Australia or populist leaders in countries like Brazil that have been blocking progress on financing the energy transition.
Given the resilience of the Paris agreement so far, they might be fighting a losing battle. While Trump has rolled back environmental regulations and supported fossil fuel companies over the last four years, he hasn’t managed to bring back coal or slow the uptake of renewable energy. This year’s precipitous drop in oil prices likely means the U.S. may not regain its title as the world’s largest oil producer.
If the last four years are any indication, local governments in the U.S. and most businesses will continue to push for more progressive climate policies. If Biden wins, he’ll be primed to ride a wave of changing sentiment both at home and abroad. A second-term Trump who tries to push back against the growing consensus could do real damage to the U.S.’s political and economic standing.
“The risk is that a federal administration which is backpedaling on climate change kills whole sectors of the American economy,” said Topping. “Obstinately trying to play King Canute to the inevitability of science, society, technology, economics and investor pressure could still make things really bad for ordinary American working class.”
© 2020 Bloomberg L.P.