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Walking away from the Paris Agreement puts the US at a competitive disadvantage


Paul Simpson, CEO of CDP and Lance Pierce, President, CDP North America, comment on the decision by President Trump to withdraw the US from the Paris Agreement on climate change…

Simpson says: “It is regrettable that the US administration has decided to withdraw from the Paris Agreement, but with or without its involvement global efforts to prevent dangerous climate change will continue to drive forward.

“Any country that fails to implement the Paris Agreement is increasing risk for itself, business, investors, citizens and for the world. This increases the impetus on others to act in order to protect their assets.

“There is already significant global action and momentum on tackling climate change, and the world economy’s transition toward cleaner energy sources is inevitable, irreversible and already underway. China, Europe and other major emitting countries are in the process of making the shift to a low-carbon economy because they see it in their national and economic interest to do so, and this transformation cannot be easily ignored by any country on the world stage.

“Governments are not working in isolation: companies, investors, cities, states and regions are awake to the urgent need for action and are a major driving force behind the low-carbon transition. Over 260 major global corporations – including US giants Dell, Kellogg Company, PepsiCo and Walmart – have joined the Science Based Targets initiative, committing to cut their emissions in line with the latest climate science to avoid dangerous global warming. Companies are driving a surge in demand for renewable energy, with Apple, Bank of America, Google and Starbucks among the growing number of influential corporations committed to 100% renewable power through the RE100 initiative.

“US cities and states are also at the forefront of the fight against climate change. New York and California are targeting 50 per cent renewable electricity generation by 2030, and they have ambitious targets in place to drastically reduce their greenhouse gas emissions. Leading cities and states are proving that huge leaps forward are possible with or without the support of the federal government.

“All of these key players in the global economy will continue taking action because they understand both the economic opportunities on offer, and the risks associated with continuing business as usual. Last year, 2,000 companies disclosing to CDP reported cost savings of USUSD12.4 billion as a result of emissions reduction projects, while nearly 400 cities identified over 1,000 economic opportunities from climate action. Meanwhile, our data showed that USUSD906 billion in annual corporate turnover is at risk because of deforestation. As the world moves closer to its zero-carbon goal, demand for sustainable investments, products and services from investors, purchasers and citizens will keep growing, further reinforcing the business case for swift and ambitious action.

“Our task at CDP remains vitally important in working with market-led forces and governments to drive change, collaboration and provide the data the world needs to manage the transition to a truly sustainable economy. We are actively supporting the Task Force on Climate-related Financial Disclosures’ recommendations which will be presented to the G20 in July and would look to the G20 to use regulatory levers to ensure their implementation. Our work on carbon pricing, science-based targets and scenario-planning will ensure we continue to innovate and drive forward action on climate change for a more sustainable future.

Pierce says: “More than a decade ago, a number of the largest investors in the country became convinced that climate change posed a systemic risk to their ability to invest their beneficiaries’ retirement savings securely and for the long term. That risk hasn’t gone away.

“Today, climate change is a mainstream concern and the country’s largest investors are calling for transparency from companies on how they are managing the transition to a low-carbon economy.

“American companies are responding. Recent analysis of Fortune 500 companies revealed that half have a goal in place to cut their climate pollution, while 190 of these companies reported savings of USD3.7 billion a year by addressing climate change. The emission reductions from these efforts are equivalent to taking 45 coal-fired power plants offline every year, with Praxair, IBM and Microsoft among the companies saving tens of millions of dollars annually through their energy efficiency efforts.

“The US is a leader in the low-carbon economy, with renewable energy becoming our country’s largest source of new electric capacity as the cost of clean energy falls. And it’s renewables, not coal, that are creating American jobs, with the solar and wind industries alone both creating jobs 12 times faster than the rest of the US economy.

“The Paris Agreement represents a managed transition. Walking away from this places the US at a competitive disadvantage, both in managing the systemic risk of climate change, and in building on the international opportunities afforded by being a leader in the low-carbon economy.”
 

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