United States Leaving Paris Agreement – Consequences for the Economy

During the administration of President Barack Obama in 2015, a Paris, climate, agreement was signed by 195 nations. This agreement was meant to protect the world from global warming by cutting back carbon emissions. The agreement was focused on reducing carbon emissions, encouraging the use of renewable energy and conserving the climate globally.

The Paris Agreement and President Donald Trump’s views

President Donald Trump, however, had a different view on this agreement. He said that the United States was pulling out on the agreement because it was going to cost the country a lot of money. He based his argument on the fact that a lot of people would be left jobless and factories would be at risk. Trump insisted on the expansion of the manufacturing of fossil fuel and the implementation of the America First Energy Plan. The Plan focuses on the reduction of oil prices, energy independence and creating energy related jobs. Trump is also going to put an end to the funding towards United Nations Green Climate Fund claiming that it was a waste of money. He views all the above as an economic success to the United States.

The economists, however, perceived that this withdrawal would have a long term effect on the economy of the United States and the world as a whole. Drought, rising sea levels that could flood land and a shortage of water are likely to happen if carbon emission continues. The effect on the climate will soon catch up with the economy by reducing global incomes, earned through farming, losses in the food production industry and destruction of buildings by the rising seas. This will increase the economic inequality globally. The Department of Energy gave a statement that the renewable energy, solar and wind-generating, sectors were doing well in the United States. This, therefore, meant that the sector is creating many jobs that Trump could invest instead. These renewable energy jobs will conserve the environment and increase the economic turnover for the country.

The Economists giving consequences

From an economic perspective, shifting to renewable energy industries could be very beneficial for the economy in the long run since the resources used in this sector will not be exhausted. The people employed in the fossil fuel industries are likely to lose their jobs eventually once the resources are exhausted hence it is not entirely a solution for job creation. This would mean a reduction in the per capita income in the country and less tax as well. The fossil fuel industries did not mass hire even after the US dropped out of the Paris Agreement, hence no substantial economic benefits have been experienced this far. The economists also argued that coal could not compete with renewable energy in the long run. It would be a failure of creating technology that is environmentally friendly. Many renowned companies including Facebook, Microsoft, and ExxonMobil among others acknowledged that the Paris Agreement was a move in the right direction and pulling out was not a solution for improving the economy of the United States.

There is no clear cut line on whether other countries would be hesitant or willing to work with the United States in other businesses since they pulled out from working with them on the Paris Agreement but it is worth keeping an eye on.

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