EDITORIAL: Signs of optimism for action on climate change, despite the 'Trump in the room'

Quantum Commodity Intelligence - Donald Trump's second term as US president started on January 20 with a raft of executive orders bringing us all expected news, that the world's biggest economy is exiting the Paris Agreement on climate change, just has it had under his first presidency.

A White House document summarising various policies Trump is planning stated an end to the "climate extremism" of the previous incumbent Joe Biden. Trump also declared an "energy emergency" and an intention to "end leasing to massive wind farms that degrade our natural landscapes and fail to serve American energy consumers", ignoring the fact that onshore wind and solar voltaic power are some of the cheapest forms of electricity generation and easiest to deploy.

That's not me saying that, Bruce Usher, a professor at the Columbia Business School and Columbia Climate School and veteran of the carbon market, posted a slide this week produced by US utility NextEra Energy. The company has approximately 72GW of electricity capacity in operation in North America and so should know what it is talking about.

The slide was headed "We believe the most economic answer to America's power needs is to build renewables for energy storage and gas-fired generation for capacity". It quoted costs for "firmed generation resources" in 2030 of $25 to $50 a megawatt-hour (MWh) for onshore wind and $40-$60/MWh for new solar. These costs compared with $70-$95/MWh for new natural gas combined cycle and $115-$140/MWh for a small modular nuclear reactor in 2035. In addition, NextEra said renewables with storage is ready now and fast to deploy, unlike the other sources.

This probably tells us what we already know: there is no sound economic reason for Trump's energy policies, let alone reasoning behind his climate views. In fact, the White House statement on January 20 announcing the Paris exit says that the "United States' successful track record of advancing both economic and environmental objectives should be a model for other countries". 

Finance

The same document also goes on to say that the  US Ambassador to the UN, in "collaboration with the Secretary of State and Secretary of the Treasury, shall immediately cease or revoke any purported financial commitment made by the United States under the UN Framework Convention on Climate Change [UNFCCC]". At the time, this wasn't exactly good news for an already cash-strapped UN climate agency.

But in the days that followed this statement, the UN's climate arm was promised funding by business media billionaire Michael Bloomberg and other US-based organisations to fill the gap in contributions resulting from the Trump administration's withdrawal from previous government financial commitments.

"Bloomberg Philanthropies and other US climate funders will ensure the US meets its global climate obligations following the federal government's intent to withdraw from the Paris Agreement for the second time," a statement from Bloomberg's philanthropic arm said. "This includes covering the funding gap left by the United States to ... (the UNFCCC) and upholding the country's reporting commitments," the statement added.

There were more positive signs from elsewhere in the world. On January 24, the Nikkei publication in Japan reported a meeting between the country's Ministry of Environment and the main business federation in Japan, the Keidanren, an organisation not known for being particularly radical. The article stated that both shared the view that Japan, the world's third-biggest economy, should continue to cut greenhouse gas emissions, despite Trump.

And China's Vice-Premier Ding Xuexiang told the Davos World Economic Forum last week that "no matter how the international landscape may evolve, China's determination and action for proactive climate response will not change". Ding noted that the country would continue to make efforts to cut GHG emissions and "observe the goals and principles" of the UNFCCC.

So the rest of the world is going to have to try and mitigate the damage Trump's policies are going to do to the climate, but at least given the stance of the UNFCCC there aren't likely to be any US federal officials to stall potential progress over global climate talks in the next four years.