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Business action and the shift to decarbonise the world economy can prevent a U-turn on climate action
It is hard not to characterise Donald Trump’s success in the U.S. presidential elections as a backward step for international action on climate change.
He has described the concept of man-made climate change as a “Chinese hoax”, showed hostility towards the Paris Agreement that came into force this month and expressed support for investment in coal generation, the most carbon-intensive of all fossil fuels.
Despite these concerning signals, a Trump presidency doesn’t have to result in a U-turn on global efforts to tackle climate change.
BEYOND THE FEDERAL GOVERNMENT
While the U.S. election results could suggest otherwise, surveys show that Americans’ awareness and concern around man-made climate change has actually grown in recent years.
Gallup’s latest annual environmental poll found for example that 64 percent of US adults worry a “fair amount” or a “great deal” about climate change, up from 55 percent last year. This includes 84 percent of Democrats, 64 percent of independents and 40 percent of Republicans.
What’s more, U.S. businesses are taking increased action to reduce their emissions and grow low-carbon investments.
In 2015, the U.S. invested $44bn in renewable energy, the second biggest investor globally and up 19 percent on the previous year. Critically for the future of the U.S. renewables industry, this is being accompanied by a rapid fall in the cost of technologies such as wind and solar, as well as significant innovation in technologies such as battery storage.
The U.S. clean energy industry is growing in many parts of the country, including in Republican strongholds such as North Carolina, which saw $6.96bn of investments in 2015 and Texas, where more than 100,000 people are employed in the renewables industry.
Crucially in the aftermath of an election that was mainly driven by concerns about jobs, the continued growth of the clean energy industry could provide significant employment opportunities, including for the workforce of declining U.S. industries such as coal.
It’s also important to recognise that initiatives to grow the low-carbon economy can often be driven at the state level. A bipartisan group of 17 U.S. state governors representing almost 40 percent of the U.S. population recently agreed for example to co-operate on the deployment of clean energy and transportation solutions.
In a year when international momentum behind climate action has been unparalleled (not least the rapid entry into force of the Paris Agreement), an important factor for Team Trump to consider is that America’s competitors have committed significant political and economic capital to taking action.
According to Bloomberg New Energy Finance, a record $285.9bn was invested in renewables last year, with developing countries representing 55 percent of these investments.
China invested $102bn in renewable – some 2.5 times more than the U.S. – and has ambitious plans to grow investments in clean power and transport out to 2020. India, Brazil, South Africa, Mexico and Chile are now also part of the top 10 global investors in clean energy.
With work underway at the COP22 climate summit in Marrakesh to shape the rules of the Paris Agreement, it is clear that – in the words of U.N. climate chief Patricia Espinosa – “the Paris Agreement has an incredible amount of legitimacy.” The majority of world leaders have recognised that the shift to a low-carbon economy is global and irreversible.
Non-state actors are also stepping up action on climate change, with major businesses such as Unilever, Danone and Michelin supporting the latest Global Climate Action Agenda announced at the COP22 summit.
The bottom line is that major businesses increasingly understand the economic implications of unmitigated climate change and the economic opportunity of moving towards lower-carbon business models. With or without the support of the Trump administration, they will continue to invest in low carbon and energy efficiency solutions.
DOWN TO BUSINESS
In principle, a Trump presidency poses a clear challenge to future action on climate change. But as a self-confessed pragmatic businessman, Trump should recognise that there is not only an economic case for tacking climate change but that global low-carbon growth also provides an opportunity to the U.S. economy, its workforce and many of its vibrant businesses.
This is more than ever the time for progressive businesses and investors to make the case for growing the low-carbon economy.
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