My in-laws live in a small town in Northeast Ohio that could serve as the set for a documentary on the decline of manufacturing in the U.S. A major rail line runs through the town and along that track are a half dozen shuttered plants. My wife, who grew up in that town, reported last summer after a July stay with her parents that all their friends were supporting Trump. Trump carried Ohio by eight points so she was clearly on to something. While a growing majority of Americans view climate change as a threat, I doubt there is much support for the Paris Agreement in this town. Defending the U.S.’s $3 billion pledge to the Green Climate Fund (GCF), one of the key financial instruments supporting the Paris Agreement, would be an even harder sell. But unless we can make the case to all Americans, we will have no chance pushing the Trump Administration to honor the U.S.’s financial promise.
The GCF was established to be the cornerstone of developed countries’ efforts to help the poorest countries reduce carbon emissions and adapt to the unavoidable effects of global warming. In November 2014, the U.S. pledged $3 billion to the GCF, joining 42 other nations in raising a collective $10.3 billion in financial support. Shortly before President Trump took office, the U.S. State Department delivered its second installment of $500 million to the GCF, bringing the total contribution of the U.S. to $1 billion, still $2 billion short of our pledge.
Ironically, the Paris Agreement reflects exactly what conservatives have been calling for in a global climate agreement– at least those who do not view climate change as a hoax. Our trade competitors – whether developed or developing – have signed on to make emissions reductions so there is no exclusion of China or other economic rivals. The Agreement does not set a specific CO2 reduction target for the United States nor is there a collective group of countries imposing a carbon cap on us. Instead, the Paris Agreement calls for each country to determine its own reduction goals. For better or for worse, there are no penalties if a country fails to meet its pledge. Rather, the transparency provisions allow pledges to be tracked and failures to be disclosed, but beyond this “name and shame” potential, there are no consequences for failing to meet the promised progress.
In terms of the financial support for implementing the Paris Agreement, the GCF is the key forum. It will use the U.S. money, combined with other countries’ contributions and leveraged with public and private capital and debt, to finance new mitigation and climate adaptation projects. Overall, its impacts should be in the hundreds of billions. Walking away from our pledge means walking away from our ability to influence how these sums are spent. China and other economic rivals will be happy to take advantage of our absence, and you can bet that they will configure these flows without any thought to American businesses and households.
We know clean energy and other cost effective climate solutions are big boosters of economic growth. The cost of clean technologies continues to plummet, with the U.S.—including red states like Texas—leading the charge on clean energy innovation and investment. A report published this week by the Environmental Defense Fund estimates that solar and wind jobs are growing at a rate 12 times as fast as the rest of the US economy. Under the GCF’s mandate, half of the Fund’s resources are to be spent on climate mitigation, including expanding access to low-carbon energy. These investments can provide a cost-effective way to tackle energy poverty and promote growth. This in turn can spur global clean energy markets and boost demand for U.S. technology and manufacturing. The clean energy boom in the U.S. is going global and the GCF can help accelerate this great market opportunity.
The other half of the GCF’s funds are to be spent on climate adaptation, including investments in critical infrastructure and climate resistant food supplies. These are critical, life-saving investments for the communities most vulnerable to the impacts of global warming, and can help mitigate the destabilizing effects of a changing climate, which the U.S. defense community has labeled as a major national security threat. Put bluntly, investment in climate adaptation today helps head off the refugee crisis of tomorrow.
The GCF and the international effort to tackle climate change will go on regardless of U.S. participation. However, the U.S.’s continued involvement with the GCF can play a critical role in accelerating global efforts to tackle climate change and advancing strategic U.S. national security and economic interests. It makes sense to Wall Street and to Main Street. I will let you know what my in-laws say.