Tariffs on U.S. carbon emitters could overshadow any benefits
Trump says pullout spares jobs, ‘draconian’ economic burdens
President Donald Trump argued that leaving the Paris climate accord would save jobs at home, yet possible trade wars sparked by his decision could nullify any additional benefit to American workers.
Complying with the deal “could cost America as much as 2.7 million lost jobs by 2025,” he said Thursday at the White House, citing a litany of other dire economic forecasts aimed at supporting his decision. “Believe me, this is not what we need -- including automobile jobs and the further decimation of vital American industries on which countless communities rely.”
But job and growth estimates at the heart of the climate debate have varied so widely, some analysts viewed them as unreliable. Supporting the pro-pullout side was one estimate saying $3 trillion in gross domestic product and 6.5 million in jobs will be lost over the next quarter century -- numbers Trump also mentioned in the Rose Garden ceremony without noting the extended timeline. Another tally puts the GDP hit at more than $8 trillion through 2100 -- but that’s the damage estimated if the U.S. exits the deal.
“Those numbers are exercises in imagination,” Kevin Book, managing director of Washington-based research firm ClearView Energy Partners, said of the jobs estimates. “If the United States pulls out of Paris, it sets in motion potentially an acceleration of the original Paris prognosis we had, which is that this probably ends with trade-based measures,” particularly because the agreement didn’t include enforcement provisions, Book said before the president’s announcement.
More worrisome than the long-term guesses could be the expected tariffs on U.S. carbon emitters slapped on by other countries.
Twenty-five companies, including Intel Corp., Microsoft Corp. and PG&E Corp., have signed on to a letter running as a full-page advertisement in the New York Times and Wall Street Journal on Thursday arguing in favor of the climate pact, and warning of potential “retaliatory measures” by other nations.
“By expanding markets for innovative clean technologies, the agreement generates jobs and economic growth,” the letter says. “U.S. companies are well positioned to lead in these markets. Withdrawing from the agreement will limit our access to them and could expose us to retaliatory measures.”
The move leaves the U.S. as the third country, with Syria and Nicaragua, outside the massive international pact.
While some see the fear of retaliation as a stronger, if less quantifiable, economic case around the Paris agreement than hard estimates, numbers on GDP and jobs have gotten much of the attention.
The U.S. Chamber of Commerce points to a study by NERA Economic Consulting, which cites a $3 trillion hit to America’s GDP and the loss of 6.5 million industrial jobs by 2040 if the U.S. were to make good on its promises under the Paris accord. The World Resources Institute contends that those figures are misleading because the group based projections on an unnecessarily expensive route to achieving the 2025 targets agreed to under the Paris deal.
While the industry is split on their stance toward the Paris agreement, some coal executives like Bob Murray, chief executive officer of Murray Energy, have supported Trump’s talking points on the U.S. economic implications of the Paris agreement. U.S. growth would take a $2.5 trillion hit over 10 years with “factories and plants closing all over our country,” Trump said at an April rally in Pennsylvania.
The reality, however, is that the boom in energy jobs has come in gas, wind and solar industries. The electric power industry’s transition away from coal has created hundreds of thousands of jobs in renewables, making solar companies the largest employer, with twice as many workers as coal, according to the U.S. Energy Department.
Those urging the Trump administration to keep the U.S. promise on the Paris agreement have made opposite charges around the potential jobs impact. Environmental Entrepreneurs, an environmental advocacy group, said the withdrawal would put 3 million clean-energy jobs at risk. American Bridge 21st Century, a progressive political action committee, called the potential withdrawal “catastrophic” in a statement earlier this week, saying it threatens 11 million jobs being supported by made-in-America exports.
Marshall Burke, a resource economist at Stanford University who’s been modeling the effects of climate change on world and national GDPs over the course of the century, is taking an even longer view. His estimate is that pulling out of the Paris agreement would cost the U.S. economy $8.2 trillion through 2100.