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G20 Economies Must Lead on Climate Despite U.S. Position on Paris Agreement

When President Donald Trump announced on June 1 that the United States would withdraw from the Paris Agreement on climate change, he claimed that staying in would cost the economy trillions of dollars and millions of jobs. His decision was based on bad advice and bad economics. More rigorous, dynamic analysis shows that smart climate policies can boost growth and jobs. When G20 leaders meet in Hamburg July 7-8 they have an opportunity and responsibility to send a clear message that Trump’s position on Paris – and the idea that economic growth and action on climate are at odds – are simply wrong.

Why the G20?

G20 countries account for roughly 80 percent of global GDP and 80 percent of greenhouse gas emissions. In addition to the group’s role in harmonizing policy on economic issues, it has helped shape and reinforce the direction of international political will and ultimately global decision-making on climate change. Since 2009, when the parties agreed to phase out fossil fuel subsidies ahead of the Copenhagen climate summit, the G20 has sought to ramp-up action on climate change and clean energy (albeit with mixed results).

Once again, climate change and clean energy are on the agenda for the G20 leaders’ summit. Just as the G7 parties – minus the United States -- did in Italy the week before Trump’s announcement, all other parties of the G20 must now stand together to once again embrace the Paris Agreement and the economic progress it makes possible. It is critically important that the remaining G20 parties send the message that the world views the climate challenge in a starkly different way than the current U.S. administration.

What to Look for in a Climate Outcome

The G20 parties must continue their vocal support of the Paris Agreement and the unprecedented collective commitment to tackling climate change that it represents. By publicly highlighting their disagreement with the U.S. over Paris, the other parties of the G7 signaled that climate change is now an issue of international importance on par with trade, security and economic stability. The US decision has reinforced the determination of other parties like China, India and the EU: they have called the Paris Agreement “irreversible” and “an article of faith” and their commitments steadfast and “unwavering.” This sets the stage for a broader rejection of Trump’s position on Paris by this larger, more diverse collection of countries.

Parties must rally behind the proposed German G20 Action Plan on Climate and Energy Growth, the most comprehensive statement yet by the G20 parties on an integrated set of climate and energy priorities. Designed to facilitate the implementation of the Paris Agreement and the 2030 Agenda for Sustainable Development, it lays out a suite of actions and measures, including implementation of Paris pledges (and helping other countries to do the same), creation of Long-Term Greenhouse Gas Emission Development Strategies, clean energy RD&D, promotion of energy efficiency, access to modern energy services for all, enhanced adaptation, advancing finance flows on energy and climate, continuing to phase out fossil fuel subsidies, and encouraging non-state actors -- such as states, cities and the private sector -- to work toward implementing the Paris Agreement.

A full-throated endorsement of this plan by most of the G20 countries would show that they have not just a vision but a concrete set of priorities to build on the momentum coming from Paris and the global markets.

The Crucial Role of Major Emerging Economies

Demonstrating global solidarity on Paris is even more important because of the major emerging economies included in this G20 forum, especially India and China. In addition to endorsing the German Action Plan, it is critical that the developing country members of the G20 signal their action on the ground and commitment to delivering on Paris. They know climate change poses fundamental challenges to their development objectives, and at the same time represents unique opportunities to drive innovation and spur sustainable and inclusive growth.

Trump mistakenly believes these parties “won” the negotiations in Paris, by getting an agreement that supposedly allows them to do nothing for the next 13 years. Nothing could be further from the truth. For example, China has exceeded one of its four 2020 ambitious climate goals under the Paris Agreement; India added 5.5 gigawatts of new wind capacity in FY 2017, exceeding its 4 GW annual target, and Mexico has taken steps to establish comprehensive carbon pricing.

By announcing and demonstrating their intent to lead in the fight against climate change, these emerging economies will also send a clear signal that they want to capture global markets the Paris Agreement has opened up, an opportunity worth an estimated $23 trillion. Trump’s Paris pull-out ensures that China will lead the global clean energy market into the future, just as German Chancellor Angela Merkel predicted at the G7, and capture the influence that comes along with it.

Moving Forward

G20 leaders need to clearly articulate what the American people will lose from Trump’s determination to be a climate loner: job growth, minimized costs and risks to American businesses, and global competitiveness through sound investment opportunities.

With or without the United States, the Paris Agreement and the broader international regime that serves civility and stability will survive this stress test of the U.S. withdrawal and be all the stronger for it. But this only happens if the other leaders continue to stand firm in their strong commitment to their intertwined goals of climate action and sustainable economic development.

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