What Did Trump Just Do? The Paris Climate Withdrawal Explained

(Bloomberg) -- The U.S. departure from the Paris climate accord won't happen overnight, as President Donald Trump's announcement Thursday sets in motion a years-long process to withdraw from the landmark agreement -- and raises a host of questions about what comes next.

With his decision, Trump says he is protecting the U.S. economy from a deal that would cost American jobs. But he may be overstating how much it would have hurt the economy.

He also said he's open to renegotiating the deal on terms more favorable to America but it's not clear what that means or if any other country will take him up on that offer.

Likewise, despite environmentalists' concerns, the American exit is unlikely to have an immediate effect on global efforts to address climate change. Here's what you need to know.

Did Trump kill the Paris climate accord?

No. He set the U.S. on a course to withdraw from the deal. Almost 200 countries remain in the pact, which remains in effect regardless of the U.S. position. And Trump said he is open to negotiating new terms under Paris or a new accord, one that is better for American workers and force other nations to do more.

Trump could have instead pledged to withdraw from the underlying 1992 United Nations climate treaty, signed by President George H.W. Bush and ratified by the U.S. Senate. That would have made it harder to rejoin the deal later.

What's next?

Under the terms of the Paris accord, Trump must wait until November 2019 to formally submit his intention to withdraw. At that point, the U.S. enters a one-year waiting period before it's formally removed. The decision could be reversed by the next president -- or even Trump himself. As a result, the issue will be front and center during the 2020 presidential election campaign.

What's all this talk about renegotiating?

Trump spent much of his speech today saying he's willing to renegotiate the accord so that it's more fair to America. He didn't explain what he meant by that or what terms he would be willing to accept. Nor is it clear why other countries would reopen a deal that took years to reach. He said it would have to force deeper cuts from other countries. But the whole point of the deal was that each country was able to set its own targets -- meaning Trump could change U.S. targets on his own without formal negotiations.

But Trump didn't seem all that committed to opening up a new round of talks, saying of getting a deal, “if we can, that's great. And if we can't, that's fine.”

Who are the winners and losers?

Today's move could potentially boost carbon-intensive industries, such as coal companies and heavy manufacturers, while reducing demand for low-carbon alternatives. But that link is tenuous: Trump's domestic policies matter more than the Paris accord, which included no enforcement mechanism for countries that failed to meet their pledges.

U.S. companies that sell overseas could face new barriers to exports, if countries respond to an American withdrawal by imposing carbon-related tariffs or other penalties on American goods. Customers in other countries might also seek to boycott U.S. products in retaliation for Trump leaving Paris.

What does it mean for climate change?

Not much. U.S. emissions fell under Barack Obama but are projected to plateau because of Trump's policies, such as reversing Obama's regulations on power plants and methane leaks; today's decision doesn't directly affect those policies. Environmentalists argue that leaving Paris reduces the pressure on Trump to reconsider those policies.

More important will be whether Trump's withdrawal spurs other countries to do the same. There's little sign of that so far: Major emitters including China and India have shown strong support for Paris. Whether that support continues is hard to predict; if not, global emissions and temperatures could rise more quickly.

Is Trump right that India and China got off easy?

The Paris deal called for every country to set its own targets for cutting emissions. China promised its emissions would peak by 2030, while India said it would reduce the amount of carbon emitted for every dollar of economic output, but its emissions would continue to increase.

Those targets are less ambitious than the U.S. commitment, which called for cutting emissions 26 percent or more compared with 2005 levels. But India and China contended that their economies, which are less developed than the U.S., aren't yet ready to cut emissions in absolute terms.

Will it affect the U.S. economy?

Trump has cited U.S. jobs as a major reason for withdrawing from the climate accord. But studies funded by the solar industry show that more Americans now work building, installing and maintaining solar panels than are employed by coal companies. And even if coal output increased, that might not lead to more jobs, thanks to increases in automation.

Environmentalists, meanwhile, warn that leaving the agreement will create a drag on the U.S. economy, costing the country investment in clean energy and related industries.

Will my power bill go down?

The Heritage Foundation claimed that the steps required to meet the U.S. Paris commitments -- in particular, Obama's carbon regulations on power plants -- would have increased household electricity costs between 13 percent and 20 percent by 2035. But the U.S. Energy Information Administration found that improved energy efficiency would offset higher power costs, with household power bills spiking initially and then falling.

However, that argument is rendered moot by Trump's pledge to end the Obama regulations, a pledge that predated Thursday's announcement. By itself, leaving the Paris deal is unlikely to have any direct effect on household power costs.

To contact the reporter on this story: Christopher Flavelle in Washington at cflavelle@bloomberg.net.

To contact the editors responsible for this story: Jon Morgan at jmorgan97@bloomberg.net, Mark Drajem, Elizabeth Wasserman