Elsevier

Energy Policy

Volume 118, July 2018, Pages 440-454
Energy Policy

Governing the global climate commons: The political economy of state and local action, after the U.S. flip-flop on the Paris Agreement

https://doi.org/10.1016/j.enpol.2018.03.037Get rights and content

Highlights

  • U.S. withdrawal from the Paris Agreement is an opportunity to build its legitimacy.

  • States likely to be in compliance are 40% of U.S. emissions despite the withdrawal.

  • Compliant states have strong economic and political reasons to seek observer status.

  • COP 23 participants reacted forcefully to reject the Trump administrations complaints.

  • Subnational entities have ramped up their participation.

Abstract

United States withdrawal from the Paris Agreement, which follows well-known principles of common pool resource management, poses a serious challenge, but it could provide a golden opportunity to cement and advance the efficacy and legitimacy of the Agreement. The Agreement encourages subnational units to participate in a polycentric, multistakeholder governance structure. As many as two dozen states have policies that could put them in compliance. These states represents over 40% of U.S. emissions, making them the 4th or 5th largest emitter. Subnational compliance would give the Agreement a major boost particularly if they seek observer status and are exempted from sanction. Even without such rewards, the states have strong reasons to follow this path. As non-fossil fuel producing states, they have clear interests in developing local resources as the basis for their electricity sector. As a large group, they gain economies of scale and network effects. As part of the American Federalist system, they would be defending their right of independent action. At COP 23, the U.S. subnational entities played a prominent role and the treaty participants reacted strongly against the Trump administration position, while embracing the activities of U.S. subnational entities. The U.S. presence was limited and isolated.

Introduction

After months of agonizing, frequently in very public debates between members of the administration, President Trump declared his intention to withdraw the U.S. from the Paris Agreement.1 The definitiveness of the decision was always clouded by the fact that the actual withdrawal could not take place for three years, so the U.S. could still participate in events, and hints that the administration might reconsider, if the U.S. got a better deal.

The reaction of the signatories to the Agreement was more decisive. There were strong and broad statements that supporters were unshaken in their resolve. In the U.S. units of local government (individual states and cities) affirmed their commitment to the goals of the agreement. California, which has the sixth largest economy in the world, seized the mantle of U.S. leadership in supporting the agreement.2 Many U.S. corporations also affirmed their commitment to the goals.3

This paper analyzes the policy actions and debates that developed both in the U.S. and globally around the decision of the Trump Administration to withdraw U.S. participation in the Agreement.4 This debate raised issue that touch key elements of the structure of the Agreement. First, it highlights the tension between national and local energy policy authority – under both American federalism and the subsidiarity principles of the Paris Agreement that encourage action by subnational entities. Second, it describes how these governance conflicts play out in the context of the unique institutional and governance structure of the Agreement. Third, it examines the underlying economic forces that drive groups of U.S. states and other subnational entities in opposite directions (potentially compliant v. non-compliant), which underscores the dramatically different economic interests that motivate policy choices.

The paper focuses on the actions leading up to the decision to withdraw to stress the underlying fundamentals at play. We also point out that the immediate actions after the decision to withdraw are consistent with those prior dispositions. For the purposes of the analysis, we consider the initial reaction to fall in the period from the announcement of the intention to withdraw until the first meeting of the parties after the announcement. Therefore, the entire period analyzed covers a little over a year with three subperiods of intense activity – the lobbying to influence the Administration’s decision (election day until June 2017), the announcement of the decision itself (early June 2017), and the meeting at which the U.S. was “on the way out” (November 2017). We focus on the first two subperiods to build a map of the political economy of the decision, then asses the actions in the third period as a reflection of the underlying political economy. The paper focuses on three sets of actors who will deeply affect the early phase of the development of the Agreement – the U.S. Federal level, the parties to the Agreement, and the U.S. subnational entities that are supporting the agreement.

Explaining and predicting actions of key players does not, however, predict an outcome. On the contrary, with complex and powerful forces pushing and pulling the implementation of the Agreement in different directions, even challenging its very existence, the outcome is uncertain. This paper argues that, ironically, an unintended consequence of the U.S. withdrawal could be to strengthen the Agreement.

The paper is divided into four parts. The first section outlines the contemporary debate and tension between two horns of the dilemma the Trump administration faced – participation vs. federalism.

Section 2 describes climate change as a common pool resource problem and discusses how the Paris Agreement is a response to this unique challenge. It also briefly describes how the analysis of the digital revolution can be applied to the electricity sector to support the conclusion that the Paris Agreement can be, and is, perhaps, the only, effective institutional response to climate change.

Section 3 shows why American Federalism may play a key role that reinforces the Agreement, even after the U.S. decision to formally withdraw from the Agreement because the subnational entities have strong economic interest and a significant amount of political independence to act on those interests.

The paper concludes in Section 4 with a brief discussion of the policy options for each of the main actors and the direction of policy development. Having taken the position that the U.S. withdrawal could have the ironically positive, unintended consequence of strengthening the Agreement, I evaluate the options/likely actions of the parties from the point of view of seizing on the moment to promote the success of the Agreement.

Section snippets

The Paris Agreement

Over the first half year of the Trump administration, arguably the most public, long running policy soap opera was the decision of whether to withdraw from the Paris Agreement or not.5

The Paris Agreement as common pool resource management

The Paris Agreement34 is an Addendum (hereafter Agreement) to the United Nations Framework Convention on Climate Change (UNFCCC) Report (hereafter Report) of the Conference of the Parties on its twenty-first session.35 The Report and the Agreement are roughly of equal length and deserve equal attention, since the former provides justifications for and fleshes out policy prescriptions in the latter.

Climate change is a global commons problem. Individual actions that

State actions in support of Paris and climate policy

As noted above, a dozen states immediately informed the White House that they believed the U. S. should remain in and comply with the Paris Agreement. In fact, shortly after the Agreement was adopted, ten of these states joined the Under2 Coalition, which was an immediate affirmation of the effort of the Agreement to engage organizations at a variety of levels.

The Under2 Coalition is a diverse group of governments around the world who set ambitious targets to combat climate change. Central to

Conclusion

A successful reaction to the threat of U.S. withdrawal from the treaty, or the steadfast resistance of subnational units to the effort of the Trump Administration to undermine the goals and collaborative model, might provide a critical test that enhances the efficacy and legitimacy of global climate policy. Looking back several decades, this could be seen as a critical juncture or a turning point on the path to a successful response to the challenge of climate change. Acemoglu and Robinson use

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