Guest essay by Marlo Lewis Jr. of the Competitive Enterprise Institute
They’re back! The same GOP elders who have been pushing what American Enterprise Institute economist Ben Zycher charitably calls “The Deeply Flawed Case for a Carbon Tax” are now urging President Trump to stay in the Paris Agreement.
Yesterday in the New York Times, former Reagan Secretary of State George P. Shultz and his Climate Leadership Council colleague Ted Halstead, who heads the organization, argue that staying in the pact will “spur new investment, strengthen American competitiveness, create jobs, ensure American access to global markets and help reduce future business risks associated with the changing climate” whereas exiting will “yield the opposite.”
Shultz and Halstead ignore the chief perils of remaining in the Paris Agreement:
- The Agreement is the legal framework for a permanent global campaign of political pressure and diplomatic blowback to “name and shame” leaders, like Trump, who dare to champion the American people’s freedom to develop the country’s vast energy resources.
- Remaining in the Agreement ensures that U.S. leaders will continually have to negotiate domestic energy policy with foreign governments, multilateral bureaucrats, and anti-growth advocacy groups—elites who do not put America’s interests first.
- If Trump is free to treat President Obama’s emission-reduction pledge—the U.S. “nationally determined contribution” (NDC)—as a retractable wish list rather than the official commitment it plainly is, the next progressive president will similarly be free to rescind Trump’s NDC and pick up where Obama left off. No revision of the U.S. NDC can secure the future of U.S. energy producers as well as exiting a pact designed to bankrupt them.
- Failing to repudiate a treaty adopted unilaterally, with the stroke of a presidential pen, without benefit of the Senate’s advice and consent, will set a dangerous precedent undermining one of the Constitution’s important checks and balances.
Shultz and Halstead write that, “Our companies are best served by a stable and predictable international framework that commits all nations to climate-change mitigation.” No so. Our companies are best served by an international framework that allows them to capitalize on comparative advantages. One of U.S. industry’s key advantages, so vital to the manufacturing renaissance on which Trump campaigned, is an abundance of affordable energy.
As Stephen Eule of the U.S. Chamber’s Institute for 21st Century Energy explains:
It is well understood that America’s abundance of affordable, reliable energy provides businesses a critical operating advantage in today’s intensely competitive global economy. IEA [International Energy Agency] data show a huge comparative energy advantage in natural gas, electricity, and coal prices for U.S. industry compared to its OECD competitors, with prices for these energy sources in the United States often two to four times less.
European Union environment minister Margot Wallström once said that the “Kyoto [Protocol] is about the economy, about leveling the playing field for big business around the world.” That goes in spades for the Paris Agreement. The only way to impose high European energy prices on U.S. firms is to pressure U.S. leaders to adopt European energy policies.
Humorless scolds never consider that candidate Trump might have been twisting their tails when he tweeted that “The concept of global warming was invented by and for the Chinese in order to make U.S. manufacturing non-competitive.” Eule notes that the marginal cost of carbon dioxide emission reductions under China’s mostly business-as-usual NDC is $0 per ton whereas the marginal cost under the U.S. NDC is $85 per ton. What I find in Trump’s funny tweet is a serious point: Global warming is the rationale for the Paris Agreement, which would handicap U.S. manufacturers much more than it would China’s.
Shultz and Halsteed warn there will be “repercussions” and damage to America’s “reputation and credibility” if “America fails to honor a global agreement that it helped forge.” However, the exact same can be said if America fails to implement the NDC on the basis of which the Obama administration negotiated the Agreement, and which he subsequently submitted as the official U.S. commitment. The Paris Agreement expressly provides two options for withdrawing, but provides no option to “adjust” an NDC to make it less stringent. By what logic is the former less kosher than the latter?
Shultz and Hallstead would have us believe that Article 4.11, which states that a party “may” adjust its NDC “with a view to enhancing the level of ambition” also implies the party may adjust the NDC to do just the reverse. Huh?