Donald Trump, as expected, has decided to withdraw American support for the Paris climate change accords. His critics, as expected, are warning that the move threatens global efforts to cut carbon emissions and reflects a wilful ignorance about man-made global warming. The truth is more complex, and less alarming.
The Paris agreement aims to limit average global temperature increases over the course of this century to 2 degrees celsius. It was never legally binding, however, and never likely to achieve this goal. America’s non-participation presents the remaining 194 signatories with a funding shortfall if they are to keep their commitments to help poor countries cope with global warming, but it need not spell doom for the world’s climate or for America’s international standing.
On the contrary, the economics of renewable energy are changing so fast that wind and solar power are already cheaper to install in many countries than coal-fired stations. The US is a leader, not a follower, in this process, and could accelerate it by investing the £2 billion it is set to save in the research and development at which it excels.
By pulling out, Mr Trump has made good on a campaign pledge. Had he remained a party to the accords there was a risk that he would have felt domestic political pressure to dilute or derail them. Without formal US involvement, the Paris process becomes less comprehensive but also less unwieldy. It leaves individual US states free to enact their own climate change legislation, as New York and California plan to do. If in the process Mr Trump has ended the pretence that a non-binding agreement was ever the climate change panacea that its most ardent supporters hoped, that is no bad thing.
Mr Trump campaigned last year on a claim that climate change was a hoax perpetrated by China to put the US at a competitive disadvantage by encouraging environmental groups to demand unsustainable clean energy subsidies. It is not a hoax. The extent to which mean global temperature increases in our age are a result of man-made emissions may be subject to debate, but the long-term advantages to all economies of switching from fossil fuels to cleaner energy sources are clear.
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Like diesel-powered cars, foisted fraudulently on motorists as an eco-friendly way of driving, coal-fired power stations foul the air and heighten the risks of respiratory disease, cancer and global warming. The challenge for policymakers is to strike the right balance between incentives for clean energy technology that benefits everyone, and subsidies that come at the expense of growth and the worst off.
Britain has chosen a heavy, mandatory burden of subsidies to cut carbon output by 80 per cent of 1990 levels by 2050 at an estimated cost of 1 per cent of GDP a year. Most other European countries have less ambitious targets. The US is on course to revoke federal emissions limits and leave individual states to write their own rules.
Doomsayers are likely to be disappointed. The cost of new wind and solar capacity has fallen by a third and 80 per cent respectively in the past decade. As a result Texas boasts more wind power than Canada and Australia combined. The US solar industry employs twice as many people as the coal sector and is expected to keep growing regardless of any cuts in subsidies.
Mr Trump should be wary of Chinese efforts to use climate change to isolate the US. He can do this by championing a renewables sector capable of thriving without subsidies, and clean gas from fracking to complement it. Such a prospectus might have been dismissed as fantasy as recently as five years ago, but much has changed since then. The Paris accords are not about to unravel, but they are not going to save the world either. Technology and markets stand a much better chance.