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Analysis: A closer look at Trump's Paris exit speech


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Analysis: A closer look at Trump's Paris exit speech

President Donald Trump announced June 1 that he intends to withdraw the U.S. from the Paris Agreement on climate change, proclaiming it a "bad deal" that harms the country's economy, workers and job prospects.

Many of Trump's statements and the evidence he offered to justify withdrawing from the international accord have been questioned, including a public rebuke from Massachusetts Institute of Technology researchers who claim the president misused one of their studies.

Here, S&P Global Market Intelligence takes a look at some of the statements and offers some context to the claims.

The Paris Agreement itself

Trump repeatedly asserted that the agreement "imposes" certain restrictions on the U.S., but that is not how the accord works. The U.S. under President Barack Obama chose its emissions reduction plan, called a nationally determined contribution, or NDC, which is a commitment to lower economywide greenhouse gas emissions 26% to 28% from 2005 levels by 2025. Moreover, as Trump himself acknowledged, the deal is nonbinding.

Once the NDC is set, the U.S. is free to determine its own domestic policies that will bring the country into compliance with that goal. To meet its pledge, the Obama administration planned to use the U.S. Environmental Protection Agency and U.S. Department of Transportation's joint fuel economy standards for certain vehicles, the EPA's Clean Power Plan and related new source rule for fossil fuel power plants, and EPA's methane emissions limits for the oil and gas sector, among other regulatory efforts.

However, Trump ordered his agencies soon after assuming the presidency to begin to unwind many of those regulations. The U.S., therefore, was already on track to stray from its Paris commitment without having formally withdrawn. Trump suggested that he could re-enter the agreement if a fairer deal were worked out, but global leaders rebuffed Trump's offer and said the deal was not up for renegotiation.

Regardless, some contend that despite Trump's efforts to unwind greenhouse gas rules U.S. emissions will continue to drop as industry seeks cleaner, more efficient technology. For instance, the Sierra Club has estimated that the Clean Power Plan's goals could be met 13 years earlier than planned simply through the power industry's shift to clean energy. And in the wake of Trump's announcement, states, cities and other local governments have announced plans to continue with efforts to cut greenhouse gas emissions.


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"Under the agreement, China will be able to increase these emissions by a staggering number of years — 13. They can do whatever they want for 13 years. Not us," Trump said.

The Paris Agreement does allow wider leeway for developing nations, and asks developed nations to contribute to funds supporting climate change mitigation and adaptation efforts for those nations.

According to a summary of China's nationally determined contribution from the Center for Climate and Energy Solutions, the country has pledged to peak its carbon emissions around 2030 and lower its carbon intensity by 60% to 65% from 2005 levels.

But China has stepped up efforts to control its carbon emissions since it submitted its NDC. According to the BBC, China and the European Union plan to issue a joint statement June 2 reaffirming their support for the Paris agreement and other action on climate change. And in January, the Chinese government announced it was canceling plans to build 103 coal-fired power plants.

NERA and MIT studies

Trump said staying in the agreement would drastically reduce U.S. coal and natural gas production while eliminating millions of jobs. He cited estimates from NERA Economic Consulting that U.S. coal production would tumble 86% by 2040 if the Clean Power Plan and other carbon rules and policies were in place. Gas output would meanwhile fall 31% by 2040, the president added. The declines are in comparison to a baseline scenario without the Clean Power Plan.

Critics of the study, including the World Resources Institute, said NERA relied on the most costly and unrealistic pathways for lowering carbon emissions. The figures Trump cited also do not match production outlooks from the U.S. Energy Information Administration, the government's energy statistics wing.

In its latest long-term outlook, the EIA estimated that U.S. coal production under the Clean Power Plan would decline to about 619 million tons by 2040, off by only 28% from where it would be without the rule in place. And total gas output, including natural gas liquids, would climb under the EIA's Clean Power Plan reference case to a little over 32 Tcf from 31.5 Tcf without the carbon-cutting rule.

In talking points distributed before the speech, the White House cited research from MIT to claim that "if all member nations met their obligations, the impact on the climate would be negligible." MIT issued a statement June 2 rejecting the comments as "misleading." The White House document said the "impacts have been estimated to be likely to reduce global temperature rise by less than 0.2 degrees Celsius in 2100."

MIT's Joint Program on the Science and Policy of Global Change, which led the study in question, said the 0.2-degree figure reflects the incremental impact of the Paris Agreement compared with the earlier Copenhagen agreement. If the Paris agreement were applied to no climate agreement, MIT said the temperature reduction is much larger, as much as 1 degree Celsius by the year 2100. Moreover, the authors noted that the White House interpretation only considered the countries' pledges, and assumed no further strengthening of the deal. Instead, the Paris agreement will be revisited annually with an eye towards ratcheting up participants' emissions reductions over time.

"The relevant MIT researchers believe that the Paris agreement is an unprecedented and vital effort by nearly 200 countries to respond to the urgent threat of global climate change," the statement said.

Renewable energy

Trump also made some dubious assertions on the reliability of renewable energy.

"At 1% growth, renewable sources of energy can meet some of our domestic demand, but at 3 or 4% growth, which I expect, we need all forms of available American energy, or our country will be at grave risk of brownouts and blackouts," he said.

The president was likely referring to the ability of renewable energy to serve a faster-growing economy, although his comments were unclear. Even with bigger economic gains, renewable energy has headroom to expand before it could pose reliability challenges. In 2016, EIA calculated that renewable energy made up almost 15% of U.S. electric power sector generation, a threshold reached without major reliability issues. The grid is unlikely to experience any major operational or technological challenges from intermittent resources until renewable penetration exceeds 20% to 30%, according to an analyst with the U.S. Department of Energy's National Renewable Energy Laboratory.

Green Climate Fund

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Trump took particular aim at the U.N.'s Green Climate Fund, which seeks to provide $100 billion to developing countries for climate change mitigation efforts, referring to the fund as a "scheme to redistribute wealth out of the United States."

"So we're going to be paying billions and billions and billions of dollars, and we're already way ahead of anybody else," Trump said. "Many of the other countries haven't spent anything, and many of them will never pay one dime."

The U.S. under President Barack Obama sent a third of its $3 billion contribution over two payments, the last of which was made in January just days before Trump took over as president. Trump claimed that no other country "is even close" to fulfilling its pledge. Trump is correct that the U.S. has one of the most ambitious pledges at the moment; the closest is Japan with an announced $1.5 billion contribution, according to a May 12 report issued by the fund managers. All of the countries combined have offered $10.3 billion. But the European Union as of October 2016 had contributed $4.7 billion, with plans to spend 20% of its overall budget on climate change initiatives between 2014 and 2020.

Trump also said that "nobody even knows where the money is going to." But the fund has already invested in 43 projects across Eastern Europe, Latin America, Asia Pacific and Africa, with an anticipated avoidance of 978 million tonnes of carbon dioxide emissions. The majority of the projects involve mitigation efforts, including a $113 million project to revamp hydropower plants in Tajikistan to protect against future hydrological variability caused by climate change. The fund also leverages private investment and partnerships, and its managers have already partnered with a number of world financial institutions.


Trump made numerous statements about the coal industry during his speech. For more details, please see S&P Global Market Intelligence's overview of Trump's comments on clean coal and the coal mining industry.