[Updated 6/2/17, 10:10 pm ET. See below.] President Donald Trump today announced the United States would withdraw from complying with what’s known as the Paris climate accord, a landmark international agreement to combat climate change. In December 2015, nearly all the countries in the world—195 of them—agreed to the pact, which aims to reduce emissions of greenhouse gases, which contribute to the warming of the planet.
We gathered responses to the decision from energy, technology, and innovation experts around the country:
Michael Webber, deputy director of the Energy Institute at the University of Texas at Austin:
“The big losers from a U.S. withdrawal are our national reputation and nuclear power. The markets have spoken, selecting natural gas, wind, and solar as their preferred options for new power plants, and I don’t think markets will change course.”
Alexander Rozenfeld, managing director and partner at Climate Impact Capital in Houston:
“USA will be the big loser, with innovation and market share going to China as they take a leadership role. At the same time, Trump looks to cut discretionary [Department of Energy] funding longterm so there will be a slowdown of innovation. Where will U.S. companies go? Overseas to hire and build companies, taking advantage of local currency offers for companies to move from the USA. Canada is already taking talent away and will become a leader in low carbon oil exports.”
Tim Healy, chairman and CEO of EnerNOC:
“As long as renewables and other clean technologies continue to reach cost parity with traditional power, state-level regulations continue to push for more responsible energy policy, businesses that operate in multiple countries continue to be accountable to the other Paris signatories, and millennials and other consumers continue to value sustainability, then ultimately businesses will make decisions based on overall economics and long-term risk. So the smart companies won’t slow down rethinking their energy strategies and the private sector will continue to innovate to address those needs.
“Climate policy will soon become less of a partisan issue, because policies that reduce carbon emissions are powerful engines for economic growth. Look no further than the advanced energy industry, which is one of the fastest growing sectors of our economy and employs three times as many people as coal, oil, and gas. An increasing number of leaders on both sides get it, which is why in the last six months we’ve seen states like Illinois, Michigan, and Nevada – all three with Republican governors – pass legislation that’s going to have a deep impact on carbon emissions and stimulate a clean energy economy.”
Microsoft president and chief legal officer Brad Smith tweeted on behalf of big companies in tech and other markets:
The Paris Agreement is good for the US economy & the environment. We & other US companies urge @Potus to stay in the Paris Agreement. pic.twitter.com/I8aaevxaew
— Brad Smith (@BradSmi) June 1, 2017
Pradeep Anand, president of Seeta Resources in Houston:
“Even if the U.S. administration pulls back from the Paris Climate accord, you can’t stop this innovation train that has already pulled out of the station. It may change tracks and move to places, people, and resources that are more farsighted than the myopic few who may respond to this hiccup. Nature and science and the rest of the world cannot be held hostage by U.S. politics and its blinkered, short-term approach to a serious issue!”
Dan Cohan, environmental engineering professor at Rice University in Houston:
“It’s ironic timing for this because all the surveys show that public concern for climate is at all times highs. It’s become clear that Trump and the Scott Pruitt-led EPA were going to be ruling back actions on climate. So how does everyone else outside of Washington respond to this move? California’s legislators are considering redirecting some of their carbon price revenue to fund energy innovation research in their state. From the business side, one of the biggest drivers of growth in wind and solar has been companies such as Google and Facebook buying up enormous amounts of clean energy contracts. Does this slow or speed up outside voluntary efforts?
“I don’t think I expect the big companies to shift their investments much because of this. … All these investment decisions are looking forward to what return are they going to earn two or three decades from now or longer. There is no guarantee at all that Trump pulling the US out of the Paris agreement now will mean there won’t be stronger climate policies in the future. These investment go beyond a presidential term.”
Matt Bell, president of Strategic Piece in Houston:
“As with many of Trump’s pronouncements and actions, I believe it will lead to confusion, distrust—both of the U.S. by other nations and of government by the people—and a further hesitation on the part of potential investors to do business with/in the USA.
“So, against that backdrop:
“Winners:
—Countries that continue to support carbon-intensive power generation and industrial base (China), which will remain globally competitive when they should not.
“Losers:
—U.S. industry, which will receive less investment and do less business because of uncertainty in what else the administration is capable of doing and changing.
—Oil and gas, ironically, because the industry’s tremendous investments in finding, producing, and processing hydrocarbons in a more environmentally friendly manner will go unrewarded (for now).
“Impact on innovation:
—Reduction in funding from government sources for R&D related to energy efficiency, emissions reduction, and carbon capture/storage/utilization.
—Consequential constriction in the pipeline of innovations reaching commercialization because insufficient funding is available for proof-of-concept and early-stage development.
—Increase in private equity/venture capital directed toward climate-change related innovation in lieu of government-backed funding.
—Paradoxically, a potential increase in climate-related R&D and innovation because investigators and backers want to visibly ignore national policy and act in the best interests of the wider stakeholder group.
—Corporate investment in climate-related R&D and innovation will remain largely unchanged because they are acting in response to shareholder (and employee) drivers, not government—even if they collect fewer tax breaks along the way.”
“Amazon continues to support the Paris climate agreement and action on climate change,” the Seattle-based commerce and tech giant tweeted Thursday afternoon, adding: “We believe that robust clean energy and climate policies can support American competitiveness, innovation, and job growth. We remain committed to putting our scale and inventive culture to work in ways that are good for the environment and our customers.”
Elon Musk said on Twitter he is making good on his promise to disengage from the Trump administration as a result of the decision:
Am departing presidential councils. Climate change is real. Leaving Paris is not good for America or the world.
— Elon Musk (@elonmusk) June 1, 2017
Kirk Washington, a veteran Pacific Northwest clean technology innovator and investor, says the U.S. withdrawal provides another reason for innovators and entrepreneurs to look to China and Canada for customers and investors.
“Indigenous markets for innovation just suffered today and that puts a tremendous burden on small companies to go abroad to find adoption for their solution,” Washington says.
Two of the five companies for which he’s a board director are already heading to China for business development.
“It’s one thing when you’ve built a base business and you want to expand, but if you’re looking for your initial, formative customers and you have to go that far from home, that’s hard,” Washington says. “That breaks your back. It takes that much longer. It costs that much more. And it’s that much more fraught with risk for something that was already risky.”
Canada and the government of Prime Minister Justin Trudeau is also attracting clean energy innovation.
The Canadian government “has put a high priority on greenhouse gas emissions reductions, and has actually put significant capital behind a variety of government programs to invest, specifically, in technologies that reduce emissions,” says Washington, who was a co-founder and general partner with Vancouver, Canada-based Yaletown Venture Partners, and was reached in Vancouver on Thursday.
He adds that private capital isn’t following suit—“yet.”
Washington adds that the withdrawal from the Paris accord is sad and embarassing, but he’s optimistic that corporations, states, and cities will continue to move the U.S. toward greenhouse gas reductions.
Marc Benioff, CEO of San Francisco-based Salesforce, had joined his voice with a roster of high-profile companies including Apple, Google, Facebook, Intel, and Microsoft that urged Trump to keep the U.S. a party to the Paris agreement. After Trump announced he would not do so, Benioff tweeted, “Deeply disappointed by President’s decision to withdraw from ParisAgreement. We will double our efforts to fight climate change.”
Salesforce also issued a company statement: “We are disappointed by the Administration’s decision to withdraw from the Paris Agreement, as climate change continues to threaten our planet and global economies. As powerful platforms for change, businesses must step up to protect the planet for future generations. Salesforce is committed to reducing the impact of climate change by embracing sustainability across every aspect of our business—including reaching net-zero greenhouse gas emissions, delivering a carbon neutral cloud and achieving 100% renewable energy.”
Bryce Smith, founder and CEO of LevelTen Energy, a Seattle-based startup helping corporations contract for renewable energy, says there could be a silver lining in the withdrawal: It may prompt people to redouble their efforts to reduce greenhouse gas emissions.
While the Trump administration was expected to pull out of the Paris agreement, until Thursday there was some hope that perhaps it was a ruse or Trump’s unpredictability meant he might keep the U.S. in the agreement after all.
“Corporate America and multi-nationals across the world have been stepping up to the plate in a really big way in the face of this leadership vacuum,” Smith says. “And now that we have formally lost the support of the U.S. government—as melodramatic as it sounds—humanity will be leaning very heavily on the efforts of corporations.”
Smith says that corporations have come to understand the economic benefits of wind and solar energy, which in many markets competes with polluting power sources and offers the added benefit of long-term price stability. Now, he says, corporate power buyers are focusing more on the “moral aspect of it”—a trend he expects to increase against the backdrop of the federal government’s reversal on climate policy.
“They can really see directly how their actions are part of a broader movement and how their purchases are transforming the grid, and literally decarbonizing the grid in a very real way,” Smith says.
He adds: “People are resilient and creative. How are you going to stop fighting for a planet to live on? It’s not going to happen.”
[Responses below were added after initial publication—Eds.]
Katie Mehnert, founder and CEO of Pink Petro, hosts former Houston Mayor Annise Parker—who was part of the group of mayors to found the Climate Mayors initiative—in an online discussion about Houston’s role in combating climate change.
Xconomy’s editors contributed to this report.
