Sil­ver lin­ing in US with­drawal from Paris

Executive Magazine - - Contents -

The de­ci­sion in early June by the United States to with­draw from the Paris Ac­cord, the lat­est global ef­fort to com­bat cli­mate change and adapt to its ef­fects, sent shock­waves of un­cer­tainty around the world. The agree­ment, which en­tered into force in Novem­ber 2016, has the goal of lim­it­ing the global tem­per­a­ture rise to two de­grees Cel­sius this cen­tury. But there is no rea­son to panic, says Va­hakn Kabakian — Le­banon’s cli­mate change port­fo­lio man­ager at the United Na­tions Devel­op­ment Pro­gramme (UNDP). In­stead, he points out that the Amer­i­can with­drawal may have served to strengthen the re­solve of other coun­tries and the in­ter­na­tional com­mu­nity to reach the com­mit­ments they promised to­ward mit­i­gat­ing cli­mate change.

One of the key take­aways from Paris has been the role the pri­vate sec­tor will play in fi­nanc­ing the re­new­able en­ergy projects that gov­ern­ments want to build to re­duce green­house gas emis­sions from elec­tric­ity gen­er­a­tion. Le­banon is now await­ing a joint Min­istry of Fi­nance (MoF) and Min­istry of En­ergy and Wa­ter (MoEW) rec­om­men­da­tion to the Coun­cil of Min­is­ters for the lat­ter to li­cense the con­struc­tion of some 200 new megawatts (MW) of wind-gen­er­ated elec­tric­ity. In mid-Au­gust the MoEW will also be­gin eval­u­at­ing of­fers from com­pa­nies to con­struct up to 180 MW of so­lar-gen­er­ated elec­tric­ity. The cost es­ti­mates for the con­struc­tion of these re­new­ables projects have not yet been pub­licly dis­closed, but fi­nanc­ing may not be so dif­fi­cult to find (see story, page 58). The new projects would bring Le­banon close to achiev­ing its com­mit­ment of hav- ing 12 percent re­new­able en­ergy in the na­tional en­ergy mix by 2020.

From what you’ve heard within Le­banon, and from its coun­ter­parts re­gion­ally and in­ter­na­tion­ally, what has been the re­ac­tion to the United States with­draw­ing from the Paris Ac­cord?

It varies. For the peo­ple who are re­ally not into it, they all saw it with an ‘Oh, you guys are screwed’ sort of a re­ac­tion, which might be true if you re­ally look at it from a plan­e­tary per­spec­tive. At Paris we agreed on a tar­get be­low two de­grees Cel­sius, and that’s in jeop­ardy if the US is out. Ef­fec­tively, they won’t be out be­fore Novem­ber 2020, be­cause there’s a clause in the agree­ment that you can’t with­draw un­til three years af­ter it en­ters into force — [which was] Novem­ber 2016. So 2019 [would be the ear­li­est the with­drawal could start], and then the process takes around a year, so that’s Novem­ber 2020, which would prob­a­bly be af­ter or around elec­tion day in the US. And then the in­com­ing pres­i­dent, once they take of­fice, could re­v­erse this in 30 days or so. Now that’s pro­ce­dure.

No [not just a psy­cho­log­i­cal ef­fect], be­cause if the US re-en­ters the Paris Agree­ment in 2020 or 2021, they would have es­sen­tially lost four years of ef­forts to­ward meet­ing their 2030 tar­get — 25 to 28 percent be­low their 2005 emis­sions. So that lag time, plus if the US ac­tu­ally locks in in­vest­ments in new fos­sil-in­ten­sive tech­nolo­gies for the com­ing 20 or 30 years — [that’s] money not spent in the right di­rec­tion, if in four years time you’re go­ing to re­v­erse [Trump’s de­ci­sion] and re-en­ter [the ac­cord].

Now what’s good, and what no one re­ally ex­pected, is that glob­ally there was this amaz­ing sol­i­dar­ity on the Paris Agree­ment from think­tanks, NGOs, gov­ern­ments, and coali­tions of gov­ern­ments, think­ing of do­ing more than what they’ve al­ready com­mit­ted. France is try­ing to do that, the EU went to China — there was a sum­mit.

The EU is much more strongly com­mit­ted now than it was prob­a­bly be­fore. That’s why there was an EU-China sum­mit — I think it was the next day or so — fol­lowed by a French-In­dian sort-of sum­mit. [Ev­ery­one], es­pe­cially China and In­dia, were very much try­ing to send a mes­sage that that’s not true (that Amer­ica’s with­drawal has scup­pered the ac­cord): ‘We’re fully com­mit­ted.’ That’s on the in­ter­na­tional level. At the US level, Cal­i­for­nia is lead­ing and Hawaii just passed a cli­mate change law — they’re say­ing to the fed­eral gov­ern­ment, ‘We’re in.’

One of the key take­aways from Paris is that this is go­ing to be a big pri­vate sec­tor op­por­tu­nity. So when you see all the huge cor­po­ra­tions in the US — the EXXONs and these sorts — step­ping up and pledg­ing to reach Paris com­mit­ments, does that re­as­sure?

Def­i­nitely, the key play­ers in the Paris Agree­ment are the non-state ac­tors, which, in the US case, are do­ing what they want to do ir­re­spec­tive of

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