Page 5 - Logistics News June 2017

Opinion

The Paris

Agreement Lives

by Ann Grackin, ChainLink Research

How will the formal withdrawal from the Paris Agreement affect the US growth industries?

Introduction
Whether we want it today or not, the role of the
USA has been one of international leadership
since Woodrow Wilson entered us into WWI.
That leadership was cemented after WWII into
covenants such as the UN, NATO, The World Bank,
and hundreds of trade agreements and treaties.
This is the second time the U.S. has formally
withdrawn from international agreements since the
Trump administration came to offi ce and there may
be more to come. Since we are most concerned
with ‘putting America fi rst,’ questions arise as to
what impact these moves will have on the U.S.’s
economic outlook. Though the motive of the current administration
is the reinvigoration of the coal industry, it remains
to be seen what the government can actually do to
achieve that goal. For any sector to be sustaining,
they have to have a profi table market. Yet, the
coal sector has been in decline for a number of
years, not due to regulations, but due to the fact
that it has become less and less competitive with
other sources of energy for electricity production,
especially natural gas.
In the early 2000s coal’s share of the US energy
market began to decline. Various initiatives at state
and national levels, which often had bipartisan
support, began to help catalyse new energy
sources. A decade later many power plants (major
purchasers of coal) have been reducing their
reliance on coal by converting to alternate sources,
and in some cases, have shut down. So the truth is
President Trump’s withdrawal from the United that the current level of production meets demand
Nations Framework Convention on Climate and that demand is likely to continue shrinking.
Change, informally known as the Paris Agreement, Moreover, even if emission standards are loosened
will turn off further fi nancial commitments3 to the at a national level, the states generally still dictate
fund set up to support poorer nations; but beyond what type of power sources reside in their domain.
that and more important to this discussion, it Climate change aside, we all remember that the
abandons a commitment to reduce greenhouse major concern from the late nineties onward was
gases and, de facto, a leading place at the table in more about supply—with oil prices gyrating and
the green-tech world trade. often at astronomically high rates—which severely
President Obama did not actually seek impacted other industries from transportation to
ratifi cation by the Senate for this treaty, since his housing. As well, there was/is an ongoing concern
and previous administrations’ policies had set the about national security and reliance on foreign oil
U.S. on the course to reduce greenhouse gases sources, which was also a driver in the focus on
with regulations and incentives for alternative renewables.
energy. Since then, new sources and methods (fracking,

18 June 2017 | Logistics News