Trump's second withdrawal from Paris Agreement to have limited impact

Editor's note: The article, written by Zhao Xingshu, a research fellow at the Institute of American Studies, Chinese Academy of Social Sciences, reflects the author's opinions and not necessarily the views of CGTN. It has been translated from Chinese and edited for brevity and clarity. 

Immediately after his inauguration, US President Trump signed an executive order directing the United States to withdraw once again from the landmark 2015 Paris Agreement along with various other agreements and commitments under the United Nations Framework Convention on Climate Change (UNFCCC). It is expected that Trump will further ruin the "climate legacy" of earlier administrations, slow down the US's climate actions, support fossil fuel development and utilization and delay the US's transition to clean energy.

Trump has long been a "climate skeptic" and "climate nihilist." Under the powerful influence of lobbying by traditional fossil fuel interest groups and the mounting pressure from rising electricity demand driven by advancements in artificial intelligence, along with the increasingly complex dynamics of great-power competition and geopolitical conflicts, Trump's reversal of the US climate agenda for a second time comes as little surprise.

Trump's climate policies will have varying influences on global climate governance and the energy transition. First, they will obstruct the implementation of the Paris Agreement, which requires every signatory to periodically increase its ambitious climate targets. As per schedule, countries should set new climate targets by February 2025. Trump's second withdrawal from the Paris Agreement will have a negative "demonstration effect". Some countries may adopt a wait-and-see attitude, and their political willingness to advance climate actions may diminish in the short term.

Second, these policies will reduce climate financing and weaken developing countries' ability to deliver their commitments. Trump has announced the immediate cancellation and abolition of the US international climate finance plan. Currently, the US has contributed the largest amount of international climate funding in the world. As Trump refuses to provide climate funding, there will be a significant funding gap in this field that other developed countries will struggle to fill in the short term. As a result, this will reduce the investments developing countries are able to make in clean energy technologies and adaptation to climate change.

Although Trump's stance on climate change will affect the willingness and capacity of the parties to the Paris Agreement to fulfill their commitments, global climate governance processes, as represented by the Paris Agreement, will not be rendered ineffective by the US withdrawal, nor will the global transition to clean energy be reversed due to Trump's actions. As Fatih Birol, Executive Director of the International Energy Agency (IEA), stated, Trump presidency will not stop the energy transition.

This is because the global context surrounding "Trump's withdrawal" is vastly different from the situation during his first term. In 2015, countries worldwide had only reached an initial consensus and formed the Paris Agreement. However, by 2024, they have spent nearly a decade implementing domestic actions to reduce emissions and strengthen their national economies and competitiveness by promoting clean energy development. Over the past ten years, global investment in clean energy has continued to grow. According to the International Renewable Energy Agency (IRENA), the global installed renewable energy capacity was 1,985 GW in 2015, and by 2023, it had grown to 3,865 GW, nearly doubling. In addition, the cost of clean energy has been consistently decreasing globally. Between 2010 and 2023, the cost of electricity from photovoltaic power plants fell by 90 percent, from $0.460/kWh in 2010 to $0.044/kWh in 2023. The average generation cost of wind power plants also dropped by 70 percent, from $0.111/kWh in 2010 to $0.033/kWh in 2023. This demonstrates that apart from environmental and developmental benefits, clean energy technologies can also generate compelling economic benefits.

The economic motivations behind addressing climate change and the global clean energy transition have become unstoppable. Against this backdrop, Trump's withdrawal from the Paris Agreement and the policy uncertainty it brings will only lower the investment efficiency of US companies, placing them at a disadvantage in the clean energy transition. Ultimately, this will undermine the US's competitiveness and global influence.