Months of uncertainty surrounding the U.S. administration’s position on the Paris climate accord have passed since the November 2016 election, culminating in yesterday’s announcement by Donald Trump that the country would prepare to exit the accord. Remarkably, this uncertainty has not slowed the rapid progress and advancement of global renewable energy. If anything, the activity has intensified, with strong engagement around climate action and decarbonization in particular.
The decision to exit the Paris Agreement has been highly controversial and hotly contested. As one of the largest global carbon emitters, the U.S. plays a key role in the achievement of the goals established by the accord, namely to limit global warming to no more than 2 degrees Celsius by century’s end. The impacts of warming beyond this threshold are expected to include extensive flooding, crop failure, and massive human migration and resettlement impacts — all of which threaten both U.S. security and the global value chain.
Withdrawal from the agreement will have far-reaching and global economic implications as well. Only two other nations (Nicaragua and Syria) are not participants in the accord. The other 196 countries are already moving towards embracing a low-carbon economy. Economists fear that by leaving the agreement, the U.S. will be left behind in this transition and weaken its bargaining power in other matters of state. Additional risks include potential job loss and “brain drain” of top U.S. climate scientists, particularly to clean energy leaders China, India and the EU, alongside export tariffs, and likely carbon regulations or taxation.
The U.S.’s leadership in the Paris agreement also had the potential to stabilize and reinforce commitments made by the other participants. There are concerns that U.S. withdrawal may result in a slow down or even stagnation in the development of global renewable energy markets, and insufficient funding for developing nations to leapfrog fossil fuels, a cornerstone of the agreement.
But those particular fears might be unfounded. Continued innovation and growth in the areas of renewable energy, energy efficiency and new energy technologies seem inevitable. The news has catalyzed an already passionate marketplace, and will create additional opportunities for corporations, municipalities, governments and schools to head the clean energy transition.
The highly public entreaty from corporations — even fossil-fuel-giant Exxon Mobil — that the U.S. should remain in the accord was striking. Twenty-five corporations, including Pacific Gas & Electric, one of the country’s largest energy companies, made media pleas via The New York Times and Wall Street Journal that Trump maintain U.S. involvement, while many others (including Schneider Electric) signed letters of support, and engaged the administration to communicate their positions via NGOs, television campaigns and social media.
“The path has been set and momentum is now on the side of sustainability. Businesses investing in sustainability and carbon-reducing initiatives find it helps the bottom line and customer loyalty, while also reducing emissions.” – Schneider Electric
The historic leadership already demonstrated by the private and public sectors has created clear momentum in recent years. Renewable energy has reached a global tipping point and only shows signs of acceleration, not retreat, thanks in no small part to the institutional buyer.
Moreover, rapid advancements in technology continue to drive down price and improve accessibility, removing any remaining barriers to renewable energy adoption. And a portfolio approach, combining energy attribute certificates, onsite generation and offsite power purchase agreements with energy efficiency to reduce electricity and fuel consumption, and battery storage to balance intermittency issues, pays significant dividends.
The right strategies allow organizations to reach ambitious 100 percent renewable energy commitments, while simultaneously reducing costs and increasing reliability. New energy opportunities like blockchain, microgrids, printable solar panels and more will continue to transform the electricity grid and, with it, the economy. Jobs in new industries are being created and the transformational opportunity is clear.
By taking bold action on climate — setting ambitious goals, improving efficiency and procuring renewable energy — organizations can ensure the U.S. maintains a position of leadership in the clean economy and spurs others to act. History will recognize this moment as an opportunity for the business community to rise and reach the audacious climate action accomplishments that are possible.
Learn more about Schneider Electric’s commitment to the power of business to transform energy in this CNBC interview with CEO Jean-Pascal Tricoire.