Here’s what could happen if the US pulls out of Paris climate pact

China's president, Xi Jinping, spoke at the U.N. Conference of the Parties in 2015, where he and U.S. President Barack Obama backed a historic climate change agreement in Paris. (Photo by UNclimatechange/Flickr User)

Diplomats who gathered earlier this month in Marrakech, Morocco for COP22, the United Nations climate change summit, already faced a difficult proposition: how to fine-tune and implement the international agreement on climate change drafted last year in Paris. The election of Donald Trump as the next president of the United States confounded that process even more, throwing into question many aspects of the deal that previously seemed settled, including who will lead the industrialized nations of the world in reducing greenhouse gas emissions.

Kelly Sims Gallagher is a professor of energy and environmental policy at Tufts University’s Fletcher School of Law and Diplomacy. From June 2014 to September 2015, she served in the Obama Administration as a senior policy advisor in the White House Office of Science and Technology Policy and as senior China advisor in the Special Envoy for Climate Change office at the U.S. State Department.

She spoke with The GroundTruth Project’s Chris Bentley about Trump’s impact on the international relations of the Paris climate agreement, and what effect the U.S. election might have on climate politics in Europe and China.

CB: How has the U.S. election changed China’s position within the Paris Agreement?

KSG: Fundamentally, I think the Chinese are expecting that the U.S.-China relationship on climate will be very different. It’s still to be seen. I think President-Elect Trump is a very practical person. He prides himself on being a negotiator, and I think he will soon realize that the climate issue during the Obama administration became one of the sole bright spots in the U.S.-China relationship. And in any kind of broader, bilateral relationship, you want to have some things that are going well, because there’s inevitably going to be tension on other things. Both the United States and China have gotten to a very good place on climate, kind of co-leading on this topic. I think the Chinese and many other people were concerned that, if the United States pulls out of the Paris agreement, that China would feel a lot of pressure to do the same. One of the reasons why both joined was that they did so together as the two largest emitters of greenhouse gases. I’m very pleased that the Chinese government here in Marrakech has made clear that they intend to stay the course no matter what—even if President-Elect Trump pulls out of the Paris Agreement.

I should say that, for the U.S. and China to come together in the first place and create this leadership role, [it] was unprecedented. It was almost an unholy coalition. In the past, there was a very sharp division between industrialized and developing countries. China was the de facto leader of the developing country coalition, and the United States was the de facto leader of the industrialized country coalition. So, for the two of them to cut across this huge gulf was really transformative, and part of what led to the achievement of the Paris Agreement.

I think China will be very uncomfortable now, staying in a leadership position. They don’t want to be so far out in front of all the other countries. They have a choice of either looking for another partner that can co-lead with them from the industrialized countries—Europe is an obvious choice, but I guess the downside of Europe is that it’s not clear which leader in Europe will take up the mantle and replace President Obama. People like Angela Merkel and François Hollande, they have a lot of other things that they’re focused on right now. And so it’s just not clear that that’s going to happen. It’s possible that China will retreat a little bit and take kind of a backseat position in the international process.

What I think is so encouraging is that, in terms of its own target for the Paris agreement, China is being extremely clear that it intends to stay the course, which indeed is a very ambitious target. There’s the pledge to peak emissions but also to achieve a very high percentage of non-fossil energy in their primary energy supply – there’s a carbon intensity target, an energy intensity target. So,  I think that they will not slow down.

CB: Besides dealing with the fallout of the U.S. election, what are the biggest challenges for implementing the Paris Agreement now?

KSG: There’s three ways to answer this. One is what’s going to happen in terms of elaborating the rules and procedures and modeling is the Paris Agreement. Then, there’s this question of who’s going to actually achieve their own domestic targets. And then, how do we go beyond Paris, what comes next for the post-2025 period?

A lot of things were left unspecified when they did the agreement. For example, the transparency framework—how will countries report on what they’re doing so that everybody can understand whether or not they’re achieving the targets that they created for themselves? To me, that’s probably the most important. There are financial procedures for how to move the climate finance into the Green Climate Fund, and how the fund will in turn disperse that money and for what purposes. The big debate has been how much will go to adaptation versus how much will go to mitigation projects. And there’s also been a lot of discussion of something called the “loss and damage” mechanism, which is how will countries be compensated for climate damages, if at all. And, of course, this is a pretty contentious issue.

CB: The U.S. had been a stumbling block in that discussion over “loss and damage” compensation. So, with the U.S. playing less of a role, is it possible there will be more movement on that front?

KSG: This is something that President-Elect Trump needs to understand: if he pulls out of this agreement, we lose a seat at the negotiating table. And, indeed, we will not be able to shape these rules and procedures and the successor to the Paris Agreement the way that we would be able to if we stay in. I think he may find that there are significant diplomatic consequences to pulling out. This is a top-level issue for many other countries. So once he starts interacting with foreign leaders and realizing that they’re raising this as one of their top priorities, if he wants to be able to get something from other leaders, he’s going to have to understand that one of the things they want from us is to stay in this agreement.

CB: That’s interesting, because Trump ran on a platform of reforming trade deals, and Nicolas Sarkozy and some others have floated this idea of a carbon border tax on the U.S. if it leaves the Paris Agreement. Is that something that could actually happen? How would that play out, and do you think it would actually have any effect? Trump puportedly doesn’t even believe climate change exists, so how likely is he to consider it in a negotiation on trade?

KSG: Well, a border tax adjustment is a regularly used tool in international trade by countries who, if they believe that another country is dumping products in their country, they can impose a border tax adjustment to try and equalize the price to make their domestic products competitive. If President Trump pulls out of the Paris Agreement, and thus does not bind himself to honor the U.S. target, it would be perfectly reasonable for many other countries to impose border tax adjustments on products coming in based on their carbon content. I think it is quite likely that they would do so.

CB: Who would start that, the E.U.?

KSG: It’s possible that the E.U. would do that. It’s possible that the Chinese would do that. I think the countries that have the strongest targets [under the Paris Agreement], that are putting a lot of effort into their targets, are going to have industries that are saying, “Hey, this is not fair. We’re having to compete against these Americans that aren’t bound by the same target,” and so, to equalize or normalize the treatment of the firms, they would have to do something like a border tax adjustment.

CB: Could Trump take that issue to World Trade Organization, or some other international trade organization?

KSG: He absolutely could. And it would be arbitrated under the WTO, but for the most part, any kind of border tax adjustment stays in place until that arbitration is finished. So, U.S. firms could suffer for years under that scenario.

Also I think he will soon realize that one of the big engines of growth in the U.S. economy has in fact been the clean energy industry – whether it’s the natural gas industry, solar and wind industries – and I think these firms want to take advantage of the markets that are being created by the climate policies around the world. So companies like G.E. could really suffer if they’re facing these kinds of border tax adjustments or even just not getting the stability and certainty of a stable policy environment in the United States.

So, I think there’s going to be a lot of pressure from the clean energy industry and all the jobs associated with those industries in the United States to stay the course, because in fact this has been a pretty big engine of growth.

CB: That may be so, but is there enough of that pressure to counter pressure from the fossil-fuel based companies in the U.S., who are probably better represented in Washington than renewable energy? Don’t you have somebody in the White House now who’s going to be pushing against this deal on every front?

KSG: It’s very hard to predict. I think that, if President Trump is just pragmatic on this issue, he’s going to understand  it’s a much more mixed bag than some of the ideologues that are advising him have suggested. He’ll realize that the gas industry accounts for a huge number of U.S. jobs, and so too do the renewable energy industries, and he may not want to jeopardize these jobs. But I just don’t know how much of this he realizes yet. Indeed, he has embraced some prominent climate skeptics – Myron Ebell, most prominently.

I think the third risk for the international process on climate change is really the next step. In the Paris Agreement, there is a provision to have and a 2018 facilitative dialogue and then a 2023 global stocktaking exercise. Those are fancy names for trying to determine how we take the next step beyond the Paris agreement to go beyond stabilizing emissions, which is what the Paris agreement actually achieved, to bending the curve down and getting actual global reductions in greenhouse gas emissions to avoid a two-degree or even a one-point-five degrees Celsius temperature change. So, while the Paris Agreement was a great success, it really should still be understood as a first step in actually achieving the goal of preventing dangerous climate change.

If President Trump is a one-term president, the U.S. is very likely to achieve its 2020 pledge, because the Obama administration set the country on a pretty strong course of emissions reductions. But it would be very difficult for the U.S. to achieve its 2025 Paris target without additional policy. And if the United States can’t achieve its 2025 target, it’s hard to imagine what their next step would be. So what happens in 2020 is a big question.

CB: Does that mean other countries are waiting to see what happens in the 2020 U.S. election, too?

KSG: A rather cynical perspective on this is that President Trump could stay in the Paris Agreement, but not do anything domestically to make sure that the U.S. honors it—to essentially free-ride on all the work other countries are doing and retain his seat at the table. The global will to act allows him to keep a seat at the negotiating table, avoid things like border tax adjustments that would affect U.S. firms, but it would essentially be a free-riding position.

CB: On the transparency issue, what’s the talk about how that’s going to be done? How are countries in the Paris Agreement supposed to know the rest of the world is living up to their promises?

KSG: It’s very unclear how we are actually going to achieve this transparency mechanism. You have to understand that there’s huge variations in the capacities of different countries. The ability of the United States to track in a detailed way different sectors of its economy is quite refined. Compare that to a country like Zimbabwe that has a much smaller bureaucracy, and much weaker data-collection capabilities. It’s complicated, expensive – it requires a lot of staff and a lot of technical expertise. So ,finding a one-size-fits-all mechanism is going to be really quite challenging. It seems like they’re going to launch a process in 2017 to hear from all parties and hold several workshops, engage some technical experts and then try to achieve an agreement at the next Conference of the Parties in 2017.

I personally would try to create a best-practice model and then encourage countries to do the best they can to achieve those best practices. Of course, there’s other support that can be provided to these countries—sending international experts to do this kind of work [and] providing the technical assistance that they need.