Donald Trump: The United States will withdraw from the Paris Climate Accord. Thank you. Thank you. But begin negotiations to re-enter either the Paris Accord or in ... Really entirely new transaction on terms that are fair to the United States, it's businesses, it's workers, it's people, it's taxpayers. So we're getting out, but we will start to negotiate and we will see if we can make a deal that's fair. And if we can, that's great. And if we can't, that's fine.
Stephen Lacey: We all just became actors in Donald Trump's terrifying reality TV show. After an elaborate tease over the Paris Climate deal in recent weeks, the president finally said he's done. He is walking away from the historic agreement. Today's speech was a staggering piece of rose garden theater. A rhetorical exercise that doesn't actually mean a whole lot in practice right now, but that will have immediate symbolic, diplomatic consequences. This afternoon, literally the minute after the president finished his speech, Katherine, Jigar, and I turned on our microphones and recorded our reactions. As I record right now, it's nearly midnight. And in the hour since that speech, a lot has already happened, much of which we predicted or alluded to in our conversation. So I think it's helpful to mention some of them quickly. Firstly, the president's claim that he's going to re-negotiate the deal.
Donald Trump: I'm willing to immediately work with democratic leaders to either negotiate back into Paris under the terms that are fair to the United States and its workers, or to negotiate a new deal that protects our country and its taxpayers.
Stephen Lacey: Not long after Trump's speech, world leaders and officials tied to the negotiation process issued bold statements. "It's not going to happen." There is no renegotiation process. The deal is the deal.
It will take three years to initiate the withdrawal, and another year to finalize it. So that's really important to keep in mind. This potentially makes climate a central election issue. The withdrawal process kicks in one day after the 2020 election.
We also talked about the potential for other local or state actors to take a leadership role. It didn't take long for more than sixty mayors from around the country to adopt the Climate Accord. Meanwhile, leaders from every corner of the world have rebuked the president. They're trying to distinguish Trump from all the other allies who are standing by the agreement within the US. It was a clear signal that the move is extremely isolating for the president.
We also discussed the potential corporate fall out. Already Elon Musk and Disney's CEO, Bob Iger, have quit Trump's business advisory council. Other top executives have taken to social media to lambast the president. In fact, Goldman Sachs' CEO, Lloyd Blankfein's first tweet ever was to criticize the exit from the Paris agreement. The international and domestic consequences of this decision are still playing out. So what you'll hear us grapple with in the immediate aftermath of Trump's speech is what we should take seriously. And that can be hard with this president. Katherine started us off.
Katherine Hamilton: Yeah, I felt like he was trying to create a totally new narrative as to what it was. He was really in an alternative universe as to what the Paris Agreement is all about, how negotiation works, who benefits and who doesn't benefit. The US went through an extremely long process and brought people along with it, and he's basically reframing as, "I'm trying to make our country more environmentally friendly and a better environmental steward and not create these horrible economic things that are going to happen to us by staying in this agreement." And there is nothing in reality ... No numbers, no analysis, that show ... I have no idea where he got some of the numbers he cited. That shows that there's going to be a negative impact ... An economic impact.
In fact, the opposite will happen by staying in. So I thought he was trying to create a new narrative. It was very clever. He showed that he is keeping with the campaign promise, although 70 percent of the American public does actually like the Paris Agreement and thinks we should stick to it, but he made it really sound like he was doing something wonderful for the environment by getting out.
Stephen Lacey: Jigar, your thoughts?
Jigar Shah: Well, look. I think the first thing for me is that I don't think that anything that comes out of this guy's mouth is actually legitimate and I don't love talking about it, just because I honestly think he makes it up for ratings. I think that if you're going to try to analyze it, let's start from the fact that the Paris Agreement had no teeth. Right? There are no penalties to the Paris Agreement. All it is is a voluntary agreement that says that every country in the world, except for Syria and Nicaragua, are going to work together to share technology and share financing and share deployment of climate solutions to unlock the largest wealth creation opportunity on the planet. That's all it says. It doesn't actually ... Like, have the framing of Copenhagen, which was that shared sacrifice framing.
So we're getting out of basically helping our companies sell more of its goods and services to countries around the world. I don't see how else you can spin it. The rest of the conversation around the rhetorical flourish is really deluding yourself, right? Which Gary Cohn sort of inadvertently said in his comments on Air Force One a few days ago, where we're basically saying that we're blaming the Paris Agreement for steel industry or the coal industry's demise when they had nothing to do with it. They're still going to have demise. They're still going to have all the problems that they have. Trump is not going to be able to do anything to fix it. And, you know, at some point this all comes home to roost. This guy's only been a president for three or four months, and at some point people are not going to get their job back, and people are going to realize that he doesn't actually have a plan to get their job back.
Katherine Hamilton: Yeah, I think what he did today, though was that he showed that he was fulfilling a campaign promise and put it in words that a lot of people will probably believe and be okay with because he did say it in economic terms that he was doing ... Protecting the economy and that he was going to protect the environment, even though we know that's not true. I think the words were done in such a way that he got the job done today that he promised his people he would do.
Stephen Lacey: So I want to remind people that we are digesting this in real time. You are going to hear this recording a little bit later tonight. We are recording this at a bout 4:15 PM right after the president's speech. But what we know now is that the president said that we want to start to renegotiate the Paris climate deal. And this seems to give him some wiggle room. It tells his supporters that he's going to do something, but he could just very well say, "Hey, the United States isn't going to live up to its voluntary commitments and we'll kind of ride this out for the next few years and kick it over to the next administration."
Jigar Shah: I don't know why you even give him deference. I mean, there is no renegotiation. The vast majority of countries have already ratified it. There is no renegotiation. I mean, even though our Senate didn't ratify it, all these countries' legislatures actually ratified it. There is no potential for renegotiation.
Stephen Lacey: No, I totally get that. I think what this is is a smoke screen. What it does though is allow Donald Trump to be Donald Trump. He can come out as the negotiator and he can pretend to do something major when the administration very likely won't be doing anything major at all. What he has been able to do, as Katherine says, is live up to a campaign promise, even if that promise is hollow. Even if the administration doesn't actually do anything. They can just say, "Hey, we're not going to live up to our commitments at all." And they can claim a rhetorical win. And he said this is a reassertion of America's sovereignty, which is right out of the Bannon playbook. And that is speaking directly to his supporters, so whether or not there's an official process in place, Donald Trump is allowed to be the Donald Trump that he promised on the campaign trail.
Katherine Hamilton: Yeah, it's definitely a Steve Bannon and kind of combo with Americans for tax reform, the Grover Norquist some of those talking points. And I think what this does, though ... I think that people aren't stupid when they ... They watch the news, they can see what's going on. They can see on the ground what's happening in their communities. I think the optics of this, beyond what he wants to convey is that really he's abdicating global leadership by bringing us back into this isolationist space. He's really going to be putting us, as the United States, in jeopardy of being part of this global community with allies in a number of ways. Not the least of which, of course, is innovation and trade and really economic growth. So he's putting ... He's really putting a cost, that we know that there's a cost of climate change, but he's really increasing that based on the way he's trying to frame this. Now I think that the proof is going to be in, what is the actual green house gas impact of us pulling out? It's probably better that we pull out cleanly and not try to get back in and muck around because then we could really do some damage. So if we do have ... Let's see what happens in the States. Let's see what happens in real internal policies and actions. We know on the federal level he wants to take down anything that remotely reduces climate change, but the States are moving forward and industry's moving forward.
Jigar Shah: Can I level at this for a second. I just feel like we continue to give this guy some sort of legitimacy that he doesn't deserve. There's about five hundred appointed positions that matter, that are senior in the government. Four hundred and forty-two of them haven't even been named, let alone confirmed by the Senate. There isn't even staff in the US government by which to undermine the Paris Agreement if he wanted to. All he has is rhetorical flourish. The Europeans are laughing at us. They actually published two videos earlier today that basically said ... What did the one guy say? He said that, "Donald Trump can't even read the dossier that was prepared for him such that he doesn't even understand that the Paris Agreement doesn't allow him to get out of the agreement." Which, like, I just ... I don't even understand the conversation. I don't think Secretary Perry knows has to preempt state rights. I just don't see any of this meaning anything different except that now, the US government is basically telling US companies who have climate solutions, "We're no longer going to help you export them around the world."
Katherine Hamilton: But Jigar, we are the largest economy in the world and whether or not you believe our president has any validity, he still makes a huge impact on the globe. And I realize that a lot of people are looking at us like we are foolish and this is ridiculous and they don't know what to do with them. But it does make a difference. His decisions and his words make a difference, unfortunately. And he's basically said, "I no longer want to be part of this global community." He's said that in public. And it puts us at a huge moral and ethical disadvantage as the super power.
Jigar Shah: I agree.
Stephen Lacey: Right, so ... We can laugh at the president for talking about waving his hands and talking about renegotiating the deal, when the US has to be a party to this deal for another three years, for not really understanding the details, for just straight up pushing out falsehoods about what the deal does or does not do, and what industries are going to be saved. But what we have to remember is that this just destroys US standing in the world for a while. The diplomatic importance of this agreement cannot be understated. And so what this does ... I've had a number of conversations with folks who have formally been at the state department or who are working for intergovernmental organizations, all of them say, "This is so incredibly wrapped up in all diplomacy, that it just starts to make everything harder for the United States." And so ... Whether or not Trump can be taken seriously, the fact that the United States pulled out of this agreement should be taken seriously from a geo-political standpoint. This is so incredibly serious.
Jigar Shah: The Paris Agreement is just one more place where he's decided that America doesn't have to lead, and "America first" means that America no longer leads in global affairs.
Katherine Hamilton: Yeah, I think there are a couple of other things that this points to. One is that all this chatter about how Ivanka has so much to say about what he does and she's going to be pushing on him, I mean, that's done. They're never going to be able to claim again that she has any impact at all or that she cares at all about climate change. The other thing is, this president pretends to be this amazing business man. He's going to renegotiate, which of course we don't believe is actually going to happen, but he's the big negotiator. Well, all the United States businesses were together in saying, "Do not do this. This will hurt us." And even just, if you look at basic risk and risk mitigation, any business person would not talk this decision. So all along the way he continues to undermine his own narrative.
Jigar Shah: Well, I thought it was interesting that Elon Musk was trying to fall on his sword, you know, on this particular issue. I mean, you know. I think this president time and time again shows that he has no regard for what these corporates actually believe, or these experts actually believe. It's just all friends of his from Mar-a-Lago that he listens to.
Stephen Lacey: Right. And as we documented a while back, most of the companies represented on his business council are some of the largest investors in renewable energy and some of the most outspoken on climate change. And just in the last week or two, we've seen the Exon CEO, Daren Woods, write a personal letter to Donald Trump asking him to stay in the agreement. Tim Cook, Apple's CEO, called the president reportedly. Elon Musk tweeted out that he had tried all he could and that he would leave the business advisory council if the president ended up pulling out of Paris, which he did. And dozens and dozens of other CEOs from the biggest companies in the world, from Berkshire Hathaway, Monsanto, PG&E. Every sort of major industrial, healthcare, and tech major asked the president to stay in the deal. So he is not listening to the business community at all. It's basically ... Every country in the world, except for Syria and Nicaragua, all the top CEOs in the world versus Steve Bannon, a handful of climate deniers, and the Heritage Foundation. That's really what we're looking at here.
Katherine Hamilton: Yeah, and if you look politically ... So, there was a letter from twenty-two Republican senators, all men, but guess who was not on the letter. Thirty other Republican letters were not on that letter. So there are a lot of people out there, I think politically there's going to be a lot of blow back. It'll probably first blow back on Congress before it blows back on the president regarding this issue. But it's something to pay attention to because not everybody is using the same words that the president is.
Jigar Shah: But I do think it's important for everyone to recognize that there were twenty-two senators who basically called this wrong, and they should get equal blame for this including Rand Paul, and John Cornyn from Texas, and you know, others. The one thing I would say is, there was a great piece I thought yesterday from former deputy director of Greenpeace, Ken Ward in the hill talking about this could end up being a good thing. And his take on it, which I thought was interesting, is basically that we all know that the Clean Power Plan was the lowest common denominator anyway, and we all know that the Paris Agreement was all voluntary. If this agreement makes the US states more emboldened to do more faster or cities to do more faster, or China to do more faster, then in some ways, it's better than Trump just being ambivalent.
Katherine Hamilton: Yeah, and I think cities and states are going to be stepping up and they're going to become the leader. So there was a great tweet from the mayor of Pittsburgh because Donald Trump mentioned Pittsburgh as one of those cities that he loved and wanted to protect, and the mayor said, "I can assure you that we will follow the guidelines of the Paris Agreement for our people, our economy, and future."
Jigar Shah: Well, the other thing that happened yesterday was that Exon Mobile had a shareholder resolution that passed with 62 percent of the vote basically calling for the two degree scenario. And so I think it's one of the reasons why Exon Mobile came out so in favor of the Paris Agreement. I was talking to an electric utility company who has shifted completely on shutting down their coal plants, and I asked them why, and they said, "Well, there were three shareholder resolutions that have been passed by other electric utility companies" and they didn't want to be targeted at their next shareholder resolution. So it feels like the level of action is moving away from liking something on a Facebook page and to doing more and the pressure is real on these companies to do more. So if that comes out of Trump's actions, that's a positive thing.
Stephen Lacey: I mean the one concrete thing that the president talked about was stopping spending on this hundred billion dollar Green Climate Fund that is going to help technology transfer and project development in developing countries. So that seems to be a first order of action. Does anyone kind of understand what could happen there?
Jigar Shah: Well, the Obama administration put in five hundred million dollars the day before he left office, which got the US's total contribution to a billion dollars into the Green Climate Fund of the three billion that it pledged. And so, there is real money from the United States in that fund already.
Stephen Lacey: So I guess I'm trying to figure out if there's any there, there. Obviously this has very severe diplomatic implications. And reducing spending to the Green Climate Fund has direct consequences for projects in developing countries. But this is a three year process, it's unclear what the president is actually talking about when he talks about renegotiation. So it seems like more optics than anything at this point.
Katherine Hamilton: Yeah, I definitely think it's about keeping his campaign promises and I think we're going to continue internally to move forward. Business are going to continue, corporates are going to continue. And I do agree that this is really more of a risk globally. And I think that Secretary Tillerson is going to have a much harder time dealing with other nations.
Stephen Lacey: Wrapping up, I think that it's probably helpful to kind of talk about what has happened in the last week or two, because this has been a reality TV show saga. We had this international trip where Trump talked to a number of world leaders, all of whom were pressuring the president on the Paris Agreement. Including the pope. The pope even gave him is encyclical on the environment and, you know, he gave Trump the stink eye while he gave it to him. I'm sure Trump did not read that. Then we had Gary Cohn's slip up on coal and renewables that you mentioned, Jigar. Gary Cohn is, of course, Donald Trump's top economic advisor. And he said that coal doesn't even make sense as a feed stock anymore and that the US can be a manufacturing powerhouse and be environmentally friendly with wind and solar, which was a radical departure from what the administration has been saying. And then when the president got back, we had this news tease, this breaking news tease. First, a bunch of reporters with anonymous sources, I think it was Axios first, then the New York Times, then Washington Post and Reuters. They all said that the president would be walking away and making an announcement this week. And then all of a sudden, people thought it would be a trial balloon. And they were like, "Wait a second. This could be Bannon's cadre. They're trying to sway the president publicly because they all know that the president reads these newspapers. And it could be that they're just trying to talk to him through the media." Then we had a bunch of CEOs, as a I mentioned, Elon Musk, Tim Cook, all these other big companies reach out to the president through social media, or direct phone calls, or full-page ads in newspapers. And then we had reports that Scott Pruitt was meeting with Donald Trump, and the EPA staff were actually working with Pruitt to publish anti-Paris op-eds in newspapers around the country.Directly after that, China and India came in reiterating their commitments. We had this leaked communication this afternoon showing the EU and China working closely together, and then that led us up to President Trump's final announcement where he said he was going to "renegotiate the deal," whatever that means. So it has been a crazy two weeks around climate.
Katherine Hamilton: Yeah, and I feel like he really was working to put the words together. He wanted to do this all along and just had to get the right words to frame it as, this is about American jobs ... His action is about American jobs and consumers. Industry first and all those forgotten men and women out there. That was the language he used about, "I'm a leader for all Americans. I'm going to make us better." And the sad truth is that what he's doing is only going to harm everybody in this country and everybody in the world.
Jigar Shah: I only have one thing to say. Covfefe.
Katherine Hamilton: The sweet smell of covfefe in the morning.
Stephen Lacey: Absolutely.
Jigar Shah: Oh, lord. I mean just the whole thing.
Stephen Lacey: We're in a whole world of covfefe.
Jigar Shah: I mean, the whole thing is just ridiculous. I mean the other thing we didn't talk about, of course, was the WTO filing by the US ITC warning that we're probably going to put tariffs on solar panels entering the United States.
Stephen Lacey: Yeah, we've got a really good conversation we just published this afternoon. Shayle Kann and I broke it down, so listen to The Interchange podcast. And that is just a whole other ball of wax. My God. Jigar mentioned it at the end of last week's live show, but we're going to get into that in more detail probably in the coming weeks. It could be a nasty, nasty outcome for the solar industry here. So a ton of headwinds. What are you both going to be looking out for in the days, weeks, and months after this announcement. Is there anything in particular you're keeping your eyes on?
Katherine Hamilton: I'm going to be watching states. I'm going to watch what the governors and mayors do and ... I think we're going to see people doubling down on their commitments to become ... Have more flexible, modern, innovative grids and more clean technology. So I'm going to be watching states and mayors.
Jigar Shah: Yeah, I mean I'm going to look more to international players. I'm really watching carefully what the EU and China and India are doing. It just feels like this void that the US has created really gives them this big opening to really assert global leadership and I really do hope that they take that prompt and assert that leadership.
Stephen Lacey: So there you have it, that's our initial breakdown. We again are posting this the night of Trump's speech, and we'll probably have more context next week and we'll have more topics on what's going on in the business of clean tech and energy and the environmental realm. Jigar, great to talk to you. Have a great week.
Jigar Shah: Yeah. It'll have to be fantastic to cancel out this press conference.
Stephen Lacey: Katherine, did you plan anything in preparation for this Thursday afternoon press conference? Something nice with your family?
Katherine Hamilton: Building an ark. Building an ark, my friend.
Stephen Lacey: All right. With Katherine Hamilton and Jigar Shah, I'm Steven Lacey. We are the Energy Gang. We will catch you next week.
