June 1, 2017
The president is expected to formally announce this week that the U.S. will exit the Paris climate agreement, a move that will have negligible impact on the environment but will have major benefits for the U.S. economy.
The Paris climate agreement was deeply flawed from its start. It was legally and constitutionally suspect, based on politics rather than science, and contained unrealistic goals. It promised not only a dramatic expansion of the administrative state and a huge increase in the regulatory burden on American businesses, it threatened to put the brakes on U.S. economic output at a time when most economists think the U.S. will struggle to achieve even a meager two percent growth.
It’s likely that it was already acting as a drag on the U.S. economy. After President Barack Obama unofficially committed the U.S. to the Paris agreement, businesses began preparing for its impact. Knowing that it would diminish U.S. economic output, businesses invested less and directed more investment toward less-productive technology to meet the climate deal’s mandates. Banks and financier withdrew capital from sectors expected to suffer under the climate deal and pushed it toward those expected to benefit. A classic example of regulation-driven malinvestment.
The Paris climate agreement was adopted on December 12, 2015 at the conclusion of the United Nation’s Climate Change Conference. Parties to the agreement are expected to begin taking measures to reduce emissions in 2020, mainly by enacting rules that sharply reduce carbon emissions. Countries are supposed to publicly announce “Intended Nationally Determined Contributions” to combat climate change and periodically report on their progress. The Obama administration announced the U.S. would commit to reduce emissions by 26 to 28 percent below 2005 levels by 2025, a quarter of which was supposedly achievable by the implementation of the previous administration’s legally-questionable Clean Power Plan.
This article was posted: Thursday, June 1, 2017 at 6:14 am