(Bloomberg) -- Donald Trump's plan to scrap U.S. involvement in the world's broadest deal on global warming may actually have the opposite effect, galvanizing countries, businesses and even U.S. states, to double down on stopping pollution.
The U.S. president on Thursday sided with the interests of coal miners, who dig up the dirtiest fossil fuel, as he sought to make good on his election campaign promise to quit the landmark Paris Agreement on climate change.
That put him at odds with both world leaders and chief executive officers of almost every industry on the plant, including oil majors Exxon Mobil Corp., Total SA, the the airline owner Sir Richard Branson and financiers led by BlackRock Inc.'s Laurence D. Fink and Goldman Sachs Group Inc.'s Lloyd Blankfein. With Trump working to boost fossil fuels, the rest say they're determined to keep investing in clean energy regardless of U.S. policies.
“The anger and concern over Trump's withdrawal could soon give way to global resolve,” said Jonathan Pershing, a veteran climate negotiator, who served as Special Envoy for Climate Change at the U.S. Department of State until Trump's election in November. “The goad of disagreement sometimes can drive coalitions more strongly.”
Even as Trump branded the Paris deal “unfair,” state governors took to social media to confirm their support for the accord. The mayor of Pittsburgh, Pennsylvania -- a city Trump highlighted as a beneficiary of his decision to turn his back on the global pact -- vowed to abide by the Paris agreement.
California Opposition
California Governor Jerry Brown departs Friday for China, where he'll urge the world's most populous country and largest car market to take environmental cues from Sacramento instead of the Washington. While the Trump administration is seeking to relax fuel-mileage standards for 2022-2025, California is maintaining more strict rules.
“California will resist,” Brown said on a call with reporters. “This is an insane move by this president.”
Even Russia's Energy Minister said he was confident Trump couldn't topple the Paris deal, which seeks to limit global warming well below 2 degrees Celsius (3.6 degrees Fahrenheit). Russia hasn't yet ratified the Paris Agreement, and many in the government in Moscow view the deal as a threat to their oil and natural gas exports.
“Many countries have confirmed their commitment to the accord,” said Alexander Novak, Russia's Energy Minister, speaking at the St. Petersburg International Economic Forum on Friday. “Six G-7 countries maintain the commitment, and so does China. So I think in this case we don't see significant risks of other countries dropping their commitment in a domino effect.”
Solar vs Coal
While the Paris climate deal was seen as crucial to stopping catastrophic climate change, market forces play a key role in what technologies get new investment. Solar power is already cheaper than coal in some parts of the world. In less than a decade, it's likely to be the lowest-cost option almost everywhere, according to Bloomberg New Energy Finance.
Trump's decision hardly moved markets. The WilderHill New Energy Global Innovation Index tracking 99 clean-energy companies inched up for a third day, building on a 12 percent gain this year. The Stowe Global Coal Index of 27 companies in that index fell as much as 0.55 percent on Friday and is 1 percent higher than at the start of the year.
European oil majors BP Plc and Total SA said the transition to lower carbon fuel is inevitable regardless of Trump's decision. Both called for a global carbon price to shift the world away from the dirtiest energy sources and are pursuing more investments in natural gas, which has lower carbon emissions than oil or coal.
“In 20 years we will not be known as oil and gas companies, but as gas and oil companies," said Total Chief Executive Officer Patrick Pouyanne, also speaking at St. Petersburg International Economic Forum on Friday. "If we want to have the gas, despite the position of president Trump, we need to go to carbon pricing one way or another."
--With assistance from Jack Farchy John Lippert Ryan Beene and Anna Hirtenstein
To contact the reporters on this story: Jessica Shankleman in London at jshankleman@bloomberg.net, Joe Ryan in New York at jryan173@bloomberg.net.
To contact the editors responsible for this story: Reed Landberg at landberg@bloomberg.net, Jonathan Tirone
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