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3 winners and 5 losers from Trump’s decision to pull out of the Paris climate agreement

A few coal executives are thrilled; 194 countries are not.

After months of waffling and reality show–style intrigue, President Donald Trump announced on Thursday that he’d decided to pull the United States out of the Paris climate agreement.

In a speech that was stunning in its deceptiveness, he argued the agreement is unfair to America, has damaged our economy, and will hasten other countries’ theft of US jobs. “This agreement is less about the climate and more about other countries gaining a financial advantage over the United States,” he said. Of course, none of this is true.

The agreement is nonbinding and flexible. The 195 countries that signed have plenty of room to chart their own courses within it. The US, and every other country that’s party, can change its commitments if it deems them a burden. The agreement, rather than a “legal liability” per Trump, is an international partnership to solve humanity’s most dangerous long-term problem.

While most countries are not yet on track to hit their commitments under the agreement, we are seeing a widespread resolve around the world to take responsibility for climate change and scale back greenhouse gas emissions. And the US and the world’s other leading emitters are likely to continue transitioning to cleaner energy regardless of the Paris accord. Trump may have even made others more determined to show leadership now that the US has decided it will not.

But Trump’s move is cruel in the message it sends about how America values the environment, how little it now cares about the risks climate change poses to the planet. And it’s likely to prove incredibly damaging to America’s strategic position in the world and its standing in international negotiations on a range of issues.

Here are the winners and losers from this major event.

Winner: coal executives (but not coal workers)

The US coal industry is collapsing — make no bones about it. But some coal companies, particularly ones operating in Kentucky and Wyoming, retain remarkable political influence and have long pushed Trump to exit the accord.

"This is a step to fulfilling some of the promises that he [President Trump] made," Tyler White, president of the Coal Association in Kentucky, told Fortune on Thursday.

As Vox has explained in depth many times, there is no way Trump will be able to bring coal back, despite his claims to the contrary. Between 2011 and 2016, US coal production dropped by 27 percent. The culprits, according to a report by the Columbia Center on Global Energy Policy, are:

  1. Natural gas: 49 percent
  2. Lower-than-expected demand: 26 percent
  3. Renewable energy: 18 percent
  4. Obama regulations: 3 to 5 percent

(The Paris agreement, ahem, is not on the list. This is about markets.)

Some coal companies are more in touch with the reality that they’re going to have to evolve past burning coal to stay in business, and the industry was reportedly divided on Paris. According to POLITICO, “The top three U.S. coal producers — Peabody Energy, Arch Coal and Cloud Peak Energy — indicated ... that they would not publicly object to sticking with the international accord, particularly if the administration can secure more financial support for technology to reduce pollution from the use of coal, according to industry officials and sources close to the administration.”

But coal company Murray Energy, and its friends at various conservative think tanks, helped convince Trump that Paris put the US “at a very, very big economic disadvantage.” So did the National Association of Manufacturers and the Industrial Energy Consumers of America, out of fears that their energy costs would increase. And according to Timmons Roberts at Brookings, in the past two weeks, the Competitive Enterprise Institute ran 70 ads against the agreement.

coal mining employment (CGEP)

But the efforts to fight Paris will do very little for coal miners: Their lost jobs aren’t coming back, and their communities won’t be saved by the pullout.

Winner: the GOP and the conservative movement

While the central storyline about the political figures who convinced Trump to pull out of Paris focused on Steve Bannon, Environmental Protection Agency Administrator Scott Pruitt, and White House counsel Don McGahn — all known to have vigorously opposed the agreement — there’s a lot more to it.

Many conservative and GOP leaders and influencers in Congress and the think tanks they listen to have also been pushing Trump hard to leave Paris. Twenty-two Republican senators, including Senate Majority Leader Mitch McConnell, sent a letter in May making a bogus argument that the US is could be sued if it doesn’t meet the Paris agreement’s emissions goals.

And it clearly worked.

As Vox’s Andrew Prokop writes, the Republican Party and the conservative movement have “adopted a rock-solid, widespread consensus in opposition to any serious action aimed at US reducing carbon emissions.”

There is a bipartisan House Climate Solutions Caucus. But as reporter Zack Colman found, there is really only lukewarm support for climate action among the Republicans on it. And this is the party that allowed Pruitt, a climate change denier and close pal of the oil and gas industry, to lead the EPA. With Paris, Trump stuck with the party line, and handed it a gleeful win.

Chinese leader Xi Jinping
Chinese leader Xi Jinping
Getty Images

Winner: China

So the US is no longer going to lead on climate change. That leaves other developed countries, and really China, to steer the ship. Like Europe, China has already emerged as a leader on green energy and technology. It’s expecting to reach its Paris target early.

Lately, Premier Li Keqiang, China’s second-in-command, has been pitching China, as Isaac Stone Fish writes for The Atlantic, as a “liberal, responsible, globalist power,” though it actually remains illiberal and authoritarian. The opportunity to step up on climate will help it reshape its image.

Conservatives have argued that Paris gave China and India an economic leg up on the United States, that their cheap coal puts US manufacturers at a competitive disadvantage. This is not accurate, but China does stand to emerge stronger in the realm of international diplomacy.

Leading on climate may not come easy to China, however. “There is still internal resistance in China by some powerful parties to policies cutting the use of coal and other fossil fuels,” Edward Wong notes in the New York Times. “Those interests include the state-owned energy companies.”

The other irony here is that Trump has been fearmongering about losing to China for a long time. “There are people who wish I wouldn’t refer to China as our enemy. But that’s exactly what they are,” Trump wrote in his campaign manifesto “Great Again: How To Fix Our Crippled America.”

But this is a move that lets China win.

Loser: Donald Trump

Trump, no doubt, is feeling like a winner today after his big speech on Paris. But history suggests this decision is going to make him a loser. He may be unaware, or simply dismissive, of the repercussions. But they could very likely be severe, not just to his presidency but to US diplomacy and to US companies that want to do business overseas for years to come.

As Rebecca Leber at Mother Jones pointed out, the aftermath of the Bush administration’s decision to withdraw from the Kyoto Protocol in 2001, the last time we effectively shirked international responsibility on climate change, offers some clues as to the backlash that’s in store.

"We suffered through this issue over the years: drawing that early line in the sand helped to establish our reputation for 'unilateralism.' We handled it badly," wrote then-National Security Adviser Condoleezza Rice in her 2011 memoir. Pulling out of Kyoto was a "self-inflicted wound that could have been avoided."

National security experts today say they are worried about how the decision creates a “strategic penalty” that will damage US national security in a number of ways.

“This ‘strategic penalty’ will come in terms of strained cooperation with our partners and allies who are dismayed and insulted by the move, as well as in terms of our strategic strength vis-à-vis our competitors and adversaries in the world,” said Francesco Femia, co-president of the Center for Climate and Security, a security think tank. “These competitors and adversaries will likely seize on this decision to expand their influence at our expense, whether that's in the Asia-Pacific, the Arctic, the Middle East and North Africa, or anywhere else the US is engaged. It's a blow to our leadership, and that will take time and great effort to recover from.”

These are not things that Trump is apparently worried about — but they may very well affect people close to him, like Secretary of State Rex Tillerson, in the near future. And more broadly, this move on Paris will be a stain on his presidency and could prevent his ability to do business and expand the Trump brand for years to come.

A girl whose home is threatened by river erosion and flooding in Karpasia village in Bangladesh.
Allison Joyce/Getty Images

Loser: the poor in developing countries around the world

As part of the Paris agreement, developed countries -- which have generated the lion’s share of the greenhouse gases that cause climate change — reaffirmed that they would give $100 billion by 2020 to the Green Climate Fund, to assist developing countries with their climate policy and adapt to climate impacts. As of June 2017, $10.3 billion had gone to the fund.

In his speech, Trump not only made clear that the US is done with the fund but also mocked it. “The so-called green climate fund, nice name,” is “costing the United States a vast fortune,” he said.

“In reality, the United States has contributed to date $1 billion out of a total pledge of $3 billion,” writes Matthew J. Kotchen, a Yale professor who served on the governing board of the Green Climate Fund, in the Washington Post. “Which is to say that what we’ve spent so far amounts to about .026 percent of the annual federal budget.” (Last year, President Obama contributed $500 million from the State Department’s budget.)

Part of the point of the fund is to help the least developed countries most at risk of catastrophic global warming — and it’s currently supporting 43 projects in Eastern Europe, Latin America, the Caribbean, Africa and the Asian Pacific region. The threats to many countries in these regions are very real and very scary. Bangladesh, for instance, is looking at a major refugee crisis in the coming years as sea level rise displaces millions of people living in coastal flood zones.

And we’re not just talking about people having to leave their homes because climate change will make them inhospitable or make it impossible to grow food or find water. The World Bank estimates climate effects could push 100 million people worldwide into poverty over the next 15 years.

As David Victor explained in a blog post for Brookings, Trump’s decision to withhold the additional promised contributions to the fund is a sign to developing countries “that America is unreliable and that the benefits of staying engaged in climate negotiations are fleeting.” We might also lose their good will for future negotiations. “While these countries are generally not large greenhouse gas emitters, having their support is essential to making formal decisions — including adoption of the Paris agreement,” Victor writes.

Loser: corporate America

Many of the biggest players in the US — including 69 Fortune 500 companies — saw the Paris agreement as a good deal for American enterprise. They sent letters and published ads in support of it. Their argument for Paris was that, as ConocoPhillips, one of the world’s largest oil companies, explained to Bloomberg: “It gives the U.S. the ability to participate in future climate discussions to safeguard its economic and environmental best interests.”

But even the CEO of Exxon Mobil, Darren Woods, who sent a letter to Trump in May advocating for the agreement, failed to sway him.

Now a number of business titans are pissed off with the result. Here’s what the chairman and CEO of General Electric had to say:

Mark Zuckerberg of Facebook also posted a message Thursday:

Withdrawing from the Paris climate agreement is bad for the environment, bad for the economy, and it puts our children's...

Posted by Mark Zuckerberg on Thursday, June 1, 2017

Elon Musk is angry too: He announced that he was quitting the presidential advisory committees he sits on over the decision.

Many companies already are well into a transition to lower-carbon forms of energy — and the global low-carbon economy is potentially a $1.4 trillion global business opportunity.

Which means that Trump’s decision is “a serious underestimation of American business ingenuity, and will be a drag on companies’ ability to respond to the new economy of the 21st century,” as Andrew Steer, president and CEO of the World Resources Institute, said in a statement.

Clearly corporations see supporting the goals of the Paris agreement as, at a minimum, good publicity for the climate goals and plans they already have. So now we have to ask: Will these corporations already committed to reducing emissions stick to those plans? We’ll have to see if CEOs and investors will take up the challenge. Many are already signaling that they will.

Loser: the 194 other countries that signed the agreement

The Paris agreement is not dead. In a statement Thursday, the European Union affirmed its commitment to the agreement, and to leading on climate change: “The world can continue to count on Europe for global leadership in the fight against climate change. Europe will lead through ambitious climate policies and through continued support to the poor and vulnerable.”

But losing the US is a serious blow — for how it could erode other countries’ motivation to push hard for emissions reductions. Countries that are still fully committed will now have to worry more about the possibility that less committed countries may take this as an opportunity to slack off.

As Andrew Light of WRI has said, “If the US pulls out altogether, the chances increase that developing countries like Brazil or India back away from their own commitments and say, ‘Why should we bother doing this if the world’s biggest historical emitter is completely out of the game now?’”

The risks of climate change — “reasons for concern” — include risks to unique and threatened systems and risks associated with extreme weather events, among others.
(Nature Climate Change)

Loser: all life on Earth

US participation in the Paris agreement wasn’t going to stop global warming from happening — the train has very much already left the station. But it helped concretize our commitment to slowing our contribution to it, and our collaboration with other countries toward that goal. Scientists have found that 0.8 of a degree of warming could be avoided if countries stuck to their commitments.

Climate change has already unleashed disruption on the world’s ecosystems and many human communities. Global warming is forcing plants and animals and insects — and all the other forms of life on Earth — to adjust to new conditions.

Some are adapting, or will find a way to in the future; others are already failing. The Great Barrier Reef, for instance, may not be able to recover from major recent bleaching events linked to climate change.

There are success stories of species saved and ecosystems restored in this new era of uncertainty, for sure. But the overall trajectory is very worrisome. We need to move very fast to prevent the worst effects, like the mass extinction and extreme weather events that are in store if we don’t.

Watch: How dead is the Great Barrier Reef?

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