What Leaving The Paris Climate Accord Means For Corporations
ROBERT SIEGEL, HOST:
In explaining his decision to withdraw the United States from the Paris Climate Agreement, President Trump said the deal hurt American industry.
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PRESIDENT DONALD TRUMP: The Paris Agreement handicaps the United States' economy in order to win praise from the very foreign capitals and global activists that have long sought to gain wealth at our country's expense. They don't put America first. I do.
SIEGEL: And he listed some industries that he said would be hurt if the U.S. stayed in the deal. We're going to examine those that appear to gain from his decision now with reporter Christopher Flavelle. He covers climate for Bloomberg. Welcome to the program.
CHRISTOPHER FLAVELLE: Thanks for having me on.
SIEGEL: President Trump specifically said that this would help the U.S. coal mining industry that is pulling out. And he said he happened to love coal miners. Are coal companies celebrating today?
FLAVELLE: You know, there isn't a good reason for them to celebrate. And the reason is that Paris by itself doesn't do anything. There's no enforcement mechanism. There's no rule that says the U.S. can do something different today than it could do yesterday. All the policies that matter are policies that the president could already affect - regulations. He can sign legislation. And he's made those changes.
So to the extent that the president can protect coal or bring back coal, he's done that. And it's important to know that even then, it's not clear what benefit the coal industry might have. A lot of the problems they face are due to technology, automation causing coal miners to lose their jobs and cheap natural gas.
FLAVELLE: So even if magically ending the Paris deal or pulling out of the Paris deal had some effect on coal as an industry, it's not clear how it would help coal workers.
SIEGEL: The president also cited iron, steel, paper, cement. What might those industries have to gain from his pulling out of Paris?
FLAVELLE: So when I spoke this week with people who are on both sides of this, they said the real significance of Paris is that potentially, had the U.S. stayed in the deal, then somewhere down the road, it might have been an extra avenue for pushing the U.S. to adopt new climate policies and that by pulling out, the president would sort of be more able to ignore those voices, be more able to allow industry to do what it wants. But again, the line is not direct and not all that clear. It seems like there are so many pressures and factors determining the health of those industries. By itself, Paris is a very small thing.
SIEGEL: You've also written that U.S. companies that sell overseas could face new barriers to exports through carbon-related tariffs and other penalties. Explain what you mean by that.
FLAVELLE: And that's the backlash fear. There's a concern that you hear that by pulling out, the U.S. will expose its companies to some pretty harsh pushback. As people elsewhere say, why aren't you pulling your fair share? That could take the place of consumers in other countries trying to boycott U.S. products. It could take the place of tariffs or other trade barriers as other countries say, we're trying to do something, and if you are not, we've got to impose some sort of equivalent cost so there's a level playing field.
SIEGEL: Because you're pulling out of Paris is an - they would argue is an unfair trade advantage to American exports at that...
FLAVELLE: And I think that's fair. You can argue what the magnitude is of that. But certainly other countries will look at what options they have to try to force the U.S. to do something on climate.
SIEGEL: Just very briefly - if it isn't such a big deal to heavy manufacturers, is it very big, bad news for the U.S. green energy sector?
FLAVELLE: Environmentalists told me this week they're concerned this could dissuade foreign investors who might otherwise have put money into U.S. solar or U.S. wind. From doing that, they could say this is a signal of a tough environment; put your money somewhere else.
SIEGEL: Christopher Flavelle, climate reporter for Bloomberg News, thanks for talking with us.
FLAVELLE: Thanks so much.
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