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What Leaving The Paris Accord Means For US Manufacturing

Industry News, Alternative Energy, Innovation

In 2015, a historic global agreement was signed by 195 countries called the Paris Climate Accord in an attempt to combat rising global temperatures. This year, President Trump decided to withdraw from the agreement, joining one of only three countries to refuse. The media was quick to respond with headlines and arguments that the decision “could be a tipping point for human history”.

The nation’s response slammed the withdrawal as a momentous error by the President elect, but is this response justified? Dissecting the various arguments for remaining in the agreement and for withdrawing will assist in drawing more accurate conclusions on what leaving the Paris Accord really means for United States manufacturing.

The Argument to Stay

Prior to the President confirming his decision to withdraw, some of the biggest innovation and tech companies joined forces to create an advertisement that appeared in several newspapers with an open letter to President Trump. Household names included Google, Apple, Microsoft, Facebook and Intel among others. The featured ad promoted the argument that withdrawing from the Paris agreement would limit economic growth, stunt job creation and prevent the expansion of environmentally friendly technologies.

ExxonMobil and General Electric also urged the President to remain in the international agreement. Leaving the accord, they argue, would significantly affect American companies’ ability to compete internationally. In addition to the predicted impacts on the economy, environment and job market, many argue that pulling out of the global accord is akin to abandoning our position as world leader. It is a step back from the globalist agenda, and an insult to the rest of the nations of the world. Many argue that leaving the agreement prevents America from leading the environmental cause.

The Argument for Withdrawal

US manufacturers, coal companies and a number of smaller businesses have argued that forcing reduced use of fossil fuels will be costly, time-consuming and lead to lay offs. The National Mining Association wrote an open letter to the President in support of withdrawing from the agreement on the grounds that it puts American interests behind global goals. Similarly, the National Association of Manufacturers and the Industrial Energy Consumers of America both agreed the Paris deal terms were too restrictive and costly.

The IECA strongly urged President Trump to consider the effects of rising energy costs and the likelihood of manufacturers moving overseas. The president of the group, Paul Cicio, stated “we must ensure that any climate policy does not tilt the playing field toward our global competitors,” in an open letter to the President.

The Nation’s Response

The National Association of Manufacturers delighted over the President’s decision. The vice president, Ross Eisenberg, publicly announced his support and looks forward to speaking with the President about negotiating a better international deal. Many media sources, however, have remained concerned over the potential global impacts leaving the accord could have. Right away, various businesses and individuals took to the internet to reassure the public that most companies will remain committed to becoming more eco-conscious despite the withdrawal.

Tim Cook of Apple explained, “I want to reassure you that today’s developments will have no impact on Apple’s efforts to protect the environment.” Similarly, Jeff Immelt, the CEO of General Electric, welcomed the opportunity for the industry to take the lead rather than relying on the government.

What to Expect

One Harvard professor and former Treasury secretary, Larry Summers, boldly claimed that human civilization’s progress will likely now stop and go into reverse in an article for the Washington Post. These wild claims are not supported now or historically. More reasonably, one of Intel’s executives, Mr. Harper, has explained that “even if the US pulls out, the market is still going to be there. This will be a bump in the road.” It is very unlikely that pulling out of the international agreement will cause the green energy movement to vanish or cause the sweeping global effort to improve the environment to cease to exist. To the contrary, the movement will likely gain thousands of new supporters and new funding from entrepreneurs, businessman and other members of the socially conscious elite. The nation’s immediate response seems to indicate this is the most likely scenario.

Most libertarians agree that leaving the Paris accord will be beneficial for the environmental movement. Such international commitments, which are nearly impossible to enforce, rarely produce any real action. They argue there is some truth behind Trump’s rhetoric about the whole agreement being a “bad deal” for U.S. manufacturers. Changes may be fast or slow depending on the momentum behind the environmentally conscious social movement. If current times and the nation’s response to the withdraw are any indications, then it will become apparent that the movement will only grow stronger without government interference. In the event Trump loses to a Democrat in 2020, chances are that a more unified global initiative will be brought to the table and be even stronger.

Taking a deeper look into the arguments for and against the Paris Accord, as well as the nation’s overwhelming response, clearly reveals the underlying issue behind the Paris Accord. It is the never-ending struggle between big government interference and free market advocates. It is still too early to tell what will come of Trump’s withdraw, but we shouldn’t expect the environmentally-conscious movement to fade away. President Trump alone is not capable of reversing the course of human progress towards globalism, and the clean energy movement is likely to find a new hope in open markets.