IEEJ：June 2017○ｃIEEJ 2017
Special Bulletin
A Japanese Perspective on the International Energy Landscape (327)

June 5, 2017

President Trump Announces to Withdraw U.S. from Paris Climate Accord
Ken Koyama, PhD
Chief Economist, Managing Director
The Institute of Energy Economics, JapanOn June 1, U.S. President Donald Trump in his address at the Rose Garden of the WhiteHouse officially announced that the United States will withdraw from the Paris Climate Accord, aninternational framework to prevent global warming. President Trump’s decision on the accord was aglobal matter of concern since his inauguration. Particularly after discussions at a Group of Sevensummit in May, interest in the decision grew even greater. In such circumstances, President Trump
officially clarified his willingness to withdraw the United States from the Paris Accord that he said isunfair to the United States, fails to meet U.S. interests and affects the U.S. economy and jobs.
Since the presidential election campaigns, Trump has harshly criticized the Paris Accord
and made remarks indicating his plan to exit from the accord. Just after his victory in the presidentialelection, however, he said he would prudently consider the Paris Accord, leading observers to view
his attitude on the accord as changing a little. On the other hand, Trump appointed Scott Pruitt, acritic of the Paris Accord, as administrator of the Environmental Protection Agency, adopting thebasic attitude of opposing the previous Obama administration’s legacy policies including the ParisAccord and the U.S. Clean Power Plan. His final decision on the accord thus attracted globalattention.
President Trump was expected to make an earlier decision on the accord. According tomedia reports, however, State Secretary Rex Tillerson and presidential adviser Ivanka Trump urged
President Trump to remain in the Paris Accord and relax the U.S. greenhouse gas emission reduction
target, confronting White House Chief Strategist Steve Bannon and EPA Administrator Pruitt whostrongly recommended the president to withdraw from the accord. President Trump reportedly tooktime to coordinate between them before making the latest decision and announcement at last.
Seemingly, Paris Accord defenders’ assertion that the withdrawal from the accord would damage theUnited States’ prestige and credibility in the international community eventually failed to overcomea view that it would be important for the president to remain steadfast to his basic policy or stance on
the matter since the presidential election campaigns.
Given President Trump’s basic policy line including opposition to Obama policies, the“America First” approach, priority given to the U.S. economy and jobs, and the emphasis on fossil
fuels, the decision cannot be taken as any pure surprise. However, the decision came after G7 leaders
other than Trump gave priority to the Paris Accord and called for U.S. cooperation in promoting theaccord at the summit. Therefore, the decision gained global media coverage and caused
repercussions in the world, as did earlier policy announcements and remarks by Trump. So far, manyother major countries including Japan, European countries and China regretted and deplored the1IEEJ：June 2017○ｃIEEJ 2017
Trump decision and vowed to comply with the Paris Accord. In this sense, the decision has failed tobe understood sufficiently in the world and could lead the United States to be isolated.
Even at such ”costs”, President Trump decided to exit from the Paris Accord for the reason
that the accord is unfair to the United States and would affect the U.S. economy, industries and jobs,
as described in his address. Behind the decision might have been his political judgment that heshould demonstrate the implementation of his policy promises during the campaigns to U.S. voters,
particularly Trump supporters. As U.S. domestic criticism against the Trump administration grewthrough the “Russiagate” scandal, it might have become more important for Trump to steadily put
into practice his basic policy stance since his inauguration.
The impacts of the U.S. exit from the Paris Accord may be discussed from various
viewpoints. In this report, I would like to focus on two impacts. The first impact is on the Paris
Accord itself. In conclusion, any immediate impact on the accord may be limited. Under the Paris
Accord that has already taken effect, any party to the accord will be officially allowed to make a
notice of withdrawal from the accord after the passage of three years from the effectuation and takeone year for later withdrawal procedures. The United States will thus be allowed to exit from theaccord in November 2020 at the earliest. (If the United States makes a notice of withdrawal from theUnited Nations Framework Convention on Climate Change positioned above the Paris Accord,
however, it may be able to exit from both the convention and the accord in one year.)
As major countries other than the United States are willing to comply with the Paris
Accord as noted above, their voluntary efforts to reduce greenhouse gas emissions may not be stalled.
Even if the United States withdraws from the accord, the requirements for its effectuation (includingaccord participants’ share of global GHG emissions) will remain fulfilled, allowing the accord tostay in effect. However, there is a medium-term problem that the U.S. withdrawal could discourageother Paris Accord parties from toughening their GHG emission reduction targets when they revise
their voluntary targets for submission in 2020 under the accord.
The second impact is on the United States’ own GHG emission cuts and relevant initiatives.
President Trump in his June 1 address indicated that the withdrawal from the accord is required forAmerican industries, particularly the coal industry. This suggests that the withdrawal would lead tothe revival of the coal industry. However, coal’s share of U.S. power generation dropped
significantly from the past top position of around 50%, to be positioned as the second place after
natural gas in 2016 at last, because of price competition from natural gas of which prices plunged
under the shale gas revolution. Coal’s setback is attributable not to the Obama administration’senvironmental regulations or the Paris Accord but to pure market competition.
In this sense, it is difficult to expect coal’s revival even if the United States exits from theParis Accord. Given market realities, however, U.S. GHG emissions are expected to decline
naturally thanks to market forces irrespective of whether the United States withdraws from the ParisAccord, as natural gas replaces coal for power generation steadily. Also irrespective of thewithdrawal, renewable energy expansion will make progress in the United States thanks to policy
initiatives in more than 20 states. Anyway, U.S. GHG emissions will decline moderately. The offer towithdraw from the Paris Accord will not necessarily lead to an immediate increase in U.S. GHG2

IEEJ：June 2017○ｃIEEJ 2017emissions.
Given the two abovementioned points, President Trump’s decision to withdraw from theParis Accord may have no major immediate impact on global climate change measures. As warned
by those defending the accord, however, the decision’s adverse effects on American prestige and theUnited States’ isolation from the international community could seriously affect global governanceas a body blow. A decline in the prestige of the United States as global leader could shake global
governance and accelerate moves toward a new governance regime. From the viewpoint of spillover
effects on important issues beyond environmental and energy problems, we will have to pay
attention to future moves involving the United States.

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