CURRENT SOCIETAL CONCERNS
Elpidio V. Peria
4 June 2017
Many commentators already expressed their dismay at how the US has ceded its leadership on this globally important issue of climate change, but from where we sit, here are the ways his short-sighted decision will put the US at a disadvantage :
1) The US loses a seat at the negotiating table where discussions are ongoing to further flesh out how the commitments to the Paris Agreement are to be fulfilled
The Paris Agreement is set to take effect after 2020 and the countries which are Parties to the Agreement are hard at work, more recently in its Subsidiary Bodies meeting in Bonn, Germany just last month in May, to come up with various guidelines for following through with the commitments under the Agreement, like how the Nationally Determined Contributions are to be prepared or what elements of the technology transfer framework are to be further detailed.
With the US now deciding to exit from the Paris Agreement, the US immediately loses the right to effectively participate in shaping up the rules of the various commitments under the Agreement. This was among the reasons why US business leaders wanted the US to remain in the Agreement so that the US can water down these various guidelines and it will not affect the US as much. Paris Agreement may come out eventually stronger without the US trying to dilute its mechanisms of implementation.
Having experienced in the negotiating table of the UNFCCC on technology transfer how formidable the US negotiators are, these seasoned US negotiators and legal drafters will now mainly stay on the sidelines of further discussions and they will not be able to shape it along US interests. When negotiations move to a setting where only Parties to the Agreement can join, then the US will be like the NGOs and other observers who will just remain outside the negotiating room and they will only enter once the main protagonists are finished in their negotiations.
Australian, Japanese and Canadian negotiators, who are part of the UMBRELLLA negotiating group of which the US is a guiding hand, are formidable by themselves, but without a leader like the US with political and economic clout, they may not have such a strong voice now as before, though any one of these countries may come out as the leader of this negotiating group to replace the US.
2) With the market for renewable or clean energy technologies expanding worldwide, it cannot be avoided that trade rules will be increasingly affected by what the Paris Agreement will require countries to do to achieve their climate mitigation and adaptation objectives.
Determining what aspects of trade will be affected by the rules being set up under the Paris Agreement is difficult, but based on an initial analysis by Clara Grodin of the German Development Institute of submitted nationally determined contributions, the following trade elements may play a role in the implementation of a country’s commitments under the Paris Agreement, which the US will now not have anything to do at all, to their disadvantage :
a) Reduction of trade barriers – Parties to the Paris Agreement may agree to have a package of beneficial reduction of trade barriers among them to facilitate the uptake of clean energy technologies;
b) Regulation of timber trade – this involves the determination of how sustainably produced the timber being exported are, which may vary among Parties to the Paris Agreement and now rules may be arrived at on how to give preferential treatment among those who are Parties to the Paris Agreement;
c) Standards and labeling – this involves determination of embodied carbon in products that will then be given preferable trade treatment under the rules of the World Trade Organization;
d) Border carbon adjustments or border taxes – these are taxes that are imposed on products from countries will less stringent climate policies, of which the US will surely become one as it is now out of the Paris Agreement; EU and China will only be too happy to impose these taxes on US export products given how lousy environmental regulations will now be under the Trump administration;
e) Renewable energy subsidies – these are the support given by governments to their renewable energy sector which may be subject to rules on subsidies under the WTO;
f) Fossil fuel subsidy reform – this is similar to the subsidies given to renewable energy above but this time it may be given to phase out the over-all national consumption of fossil fuels, similar to what the Duterte Administration is doing now in its Comprehensive Tax Reform Package in Congress where the prices of diesel are taxed in order to discourage its consumption;
g) International market mechanisms – these are the carbon trading arrangements that are still being discussed at the moment inside the UNFCCC but may now be expanded under the Paris Agreement in various iterations;
h) International technology transfer including intellectual property rights – this involves rules on how developing countries may gain access to patented technologies, either by relaxing the rules on how the patents may apply on these technologies, or by giving interested countries some subsidies so these technologies may be used and applied in developing country markets;
i) Response measures – these are the totality of actions a country trying to implement climate change mitigation and adaptation policies will have to do including the wholesale transformation of a country’s entire energy grid or substituting its food supply which are mainly producing export commodities to one that more or less approximates its sustainable agriculture goals.
3) The governance architecture of the Paris Agreement will effectively exclude the US now that is has to evolve to give increasing roles to sub-national entities including non-state actors like corporations, to offset the emissions gap that will not now be fulfilled by the US
Professors Charles F. Sabel and David G. Victor talked about experimentalist governance which underpins the mechanism behind the Paris Agreement, where various ways are attempted to find the best way of achieving bottom-up international policy-making.
With various US states like California and cities like New York, including giant TNCs like Apple, Google, General Electric and Walt Disney committing to act to address climate change, various mechanisms will have to be developed within the Paris Agreement, including perhaps its amendment in due time, to enable these entities to let its efforts on climate change mitigation and adaptation count. This will need to be a long-term and sustained effort and with the entire world demanding action on climate change, Trump’s deplorable decision the past few days may just become a footnote of history in the long term.