The Paris Agreement on Climate Change

Episode Notes

Transcript

Lawyer 2 Lawyer – Law News and Legal Topics

The Paris Agreement on Climate Change

06/09/2017

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Nicolas Loris: If it’s the doomsday scenario of the US getting out of Paris, I hear that from several groups who are opponents of getting out of Paris but then I hear that the market is going to drive this anyway and if the markets going to drive this anyway, then the United States doesn’t need to be in Paris to be an innovator and a global leader in the energy markets for conventional fuels, for nuclear fuels, or for renewable fuels.

Jeffrey Gracer: To withdraw from Paris, I think is to send a signal that a certain hostility to the process, the transition that’s underway, which I think is really in a sense a self-inflicted wound and an unnecessary step.

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Intro: Welcome to the award-winning podcast, Lawyer to Lawyer with J Craig Williams and Robert Ambrogi bringing you the latest legal news and observations with the leading experts in the legal profession. You’re listening to Legal Talk Network.

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Bob Ambrogi: Welcome to Lawyer 2 Lawyer on the Legal Talk Network. This is Bob Ambrogi coming to you from Massachusetts. I write a blog called LawSites. I also co-host another Legal Talk Network program called Law Technology Now that one with Monica Bay. My co-host for this program J. Craig Williams is in court today and unable to join us.

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On June 1st, President Trump accounted that the United States will withdraw from the Paris Climate Agreement. The court negotiated by 195 countries in 2015 to limit and reduce global warming, Nicaragua and Syria the only countries not currently involved in the Paris agreement.

Environmental organizations, scientists and many others have voiced their outrage over President Trump’s decision alleging that this move is a flat out denial of climate change that will eventually lead to the destruction of our environment. While supporters of withdrawal praised President Trump’s decision saying that it will save the taxpayers’ money, create domestic energy production, and jobs stateside.

Today on Lawyer 2 Lawyer, we’re going to take look at the two sides of this issue, the impact on the law on the climate, and our economy and the long-term implications of this decision.

To help us do that, we have two guests, who are extremely knowledgeable in this area. First of all, let me introduce to you attorney Jeffrey B. Gracer from the firm Sive, Paget & Riesel in New York City. Jeff has a vibrant domestic and international environmental law practice in addition to his domestic practice which includes representing a large multinational enterprise and the largest super fund matter in the US.

Jeff regularly represents non-US companies with respect to US environmental matters. His clients have included companies from Argentina, Brazil, Canada, China, Germany, India, Russia, and the UK. Welcome to Lawyer 2 Lawyer, Jeffrey Gracer.

Jeffrey Gracer: Thank you, good to be here.

Bob Ambrogi: Also joining us today is Nicholas Loris. Nick is an economist who focuses on energy, environmental and regulatory issues as the Herbert and Joyce Morgan fellow at the Heritage Foundation, Research Fellow at Heritage’s Roe Institute for Economic Policy Studies.

Nick studies and writes about energy supplies, energy prices, and other economic effects of environmental policies and regulations, including climate change legislation, energy efficiency mandates, and energy subsidies. He also covers oil, coal oil, natural gas, nuclear gas, and renewable energy policy and articulates the benefits of free-market environmentalism. Welcome to the show Nick Loris.

Nicolas Loris: Thank you for having me.

Bob Ambrogi: Well thanks to both of you for being with us today and Jeffrey I wonder if I might start with you and ask you, if you could just kind of give us an overview of what the Paris agreement really is? We’ve all heard an awful lot about it over the last couple of weeks and we’ve heard about various parameters of what it does and what it doesn’t do, but give us the kind of the thumbnail of what the Paris agreement is about?

(00:04:54)

Jeffrey Gracer: Sure. Well, the Paris agreement marked I think a very significant departure from the prior attempts to negotiate a global climate change agreement in that it’s really a bottom up agreement rather than a top-down agreement, meaning that each country brings its ambition to address the climate change issue with a nationally determined plan. In some ways you could liken it to a smorgasbord in that people bring what they’re going to bring for the meal and then you have a really good meal.

So, it’s designed to be sensitive to the rights of different countries to determine what they’re going to do and how they’re going to do it and I think that’s a very important aspect of this agreement which distinguishes it from prior agreements in that it is designed to be quite flexible in how companies that are in that agreement can aspire to lower greenhouse gas emissions and to actually achieve that.

So everyone does their part but they don’t always do it in the same way and that allows economies that are in different stages of development to seek different outcomes and different opportunities.

Bob Ambrogi: What aspects of the Paris agreement are compulsory or not compulsory? You talked about the fact that companies can kind of set their own goals I guess, for greenhouse gas emissions under this agreement. Do I have that right and if that’s the case why didn’t the United States, why didn’t Trump administration simply decide to reduce its commitments under this agreement?

Jeffrey Gracer: Well that’s a very good question and just to clarify it’s countries can bring their own nationally determined plans, not companies.

Bob Ambrogi: If I said companies, I’m sorry.

Jeffrey Gracer: Yeah no problem, but the idea is that each country gets to set its course in this international framework and the agreement is actually designed to account for changes in administration.

It does have some provisions that govern the aspiration to get below, or ultimately to get below 1.5 degrees centigrade by taking more aggressive action in the future but it also in its structure and design, accounts for the fact that there could be a change in government with new leadership that might want to achieve the goals in a different way or even redefine the goals.

So my view anyway is under the Express design of Paris Agreement, the President had a lot of flexibility if he wanted to get to result in a different way or even change the goal, to do that and still remain in the Paris Agreement and he got that advice from a lot of people I believe within his administration as well as outside of it. So that is one of the central questions as to why withdrawal was deemed to be necessary.

There were some people, I believe, in the administration, I read reports arguing that it was compulsory but I just don’t think that’s the case and I think if you read the agreement and you look at its negotiating history, that’s just not borne out by the text of the agreement.

Bob Ambrogi: Let me, I’m going to turn to Nick in just a second, but before I do, I just want to ask you one other question, you’re an environmental lawyer, your firm says it was the first environmental law firm in the country, so obviously you’ve been at this for a long time. How would you describe the significance of this agreement as a device to reduce greenhouse gas emissions?

Jeffrey Gracer: Well I think that question will be answered in the future when people actually do what they said they were going to do, but I think the important component of the agreement is that it sets a tone and direction and creates a structure for an orderly process of transitioning from more polluting activities and sources of energy to less polluting activities and sources of energy. And it sent a very strong market signal that that was the direction that the global economy was going to go.

We are in the 21st Century and there are other sources of energy available now that are less polluting. The markets are already taking us in that direction but this was an effort which I believe will continue to be successful to set that tone and direction and we’re seeing now that even with the president’s announcement that there are very, very significant and powerful constituencies in the United States that are reaffirming their commitment to the reduction goals that were set forth in the Paris agreement.

(00:09:52)

Bob Ambrogi: Nicholas you’re an economist and you have said and written that the Paris Agreement was a truly bad deal for American taxpayers and American energy companies and others in the United States, why do you say that?

Nicolas Loris: Yeah it really gets to the costs and benefits of the agreement. I don’t think it’s just a bad deal for the United States. I think it’s a bad deal for Europe and other countries, maybe some that are benefiting from some of the Green Climate Fund will end up on the winning side of this deal, but in the large part, I think it comes down to costs and benefits.

And if you look at the regulations that were submitted as part of the United States’ nationally determined contributions, the clean power plan, the regulations on new coal-fired power plants, these regulations will drive up the cost of energy and that will have significant ripple effects throughout the economy because energy is a necessary component of everything we make and everything we do.

And so businesses will pass those higher costs on to consumers. If they absorb those costs that means they can invest and innovate less, so it really acts as an economic vice that squeezes both the production and consumption side of the economy and on the flip side even if every country were to follow through with these commitments to reduce greenhouse gas emissions, although some of them very vague about what they intend to do or when they intend to do it, you’re talking about mitigating global temperatures a few tenths of a degree Celsius by the turn of the century. And so I don’t think that’s really anything to be proud of.

It took a lot of negotiating just to get to these voluntary pledges that again I think were very ambiguous and China doesn’t have to reduce its emissions until it peaks in 2030. India’s is based on emissions intensity or cuts on the ratio of CO2 emissions to GDP, so that ratio will go down as long as CO2 emissions rise less rapidly than GDP but CO2 emissions will continue to increase.

And so I think there’s still this tremendous divide between the developed country and the developing world that would actually get to any meaningful reductions in CO2 to mitigate global temperatures and keep it below that 2 degrees Celsius threshold. That was the original intent of the negotiating.

Bob Ambrogi: Why is it there? Isn’t some degree of mitigation even a small one preferable to the course we’re currently on or we’ve been on for quite a while now?

Nicolas Loris: Not at the cost that it would take. You’re talking about slicing trillions of dollars out of the global economy. You’re talking about slicing trillions of dollars just out of the US economy if these regulations were to go through.

So again I don’t think that two tenths of a degree Celsius by the year 2100, sacrificing enormous economic growth and keeping developing countries in lower levels of standards of living when more than a billion people don’t have access to affordable dependable energy sources and when more than 2 billion people are still using cook stoves and burning dung to basically live their lives to deprive them of a better standard of living when fossil fuels still provide the overwhelming majority of energy, meet our energy demands both in the United States and worldwide.

I don’t think it’s morally right to deprive developing countries of those resources and that’s not to say we have to use fossil fuels forever. I do think there is momentum for clean energy sources, for renewables, for nuclear power for more natural gas both as an electricity generating source but also as a transportation fuel but if the market is going to drive those things, then we shouldn’t worry about Paris anyway.

If it’s this doomsday scenario of the US getting out of Paris, I hear that from several groups who are opponents of getting out of Paris but then I hear that the market is going to drive this anyway and if the market is going to drive this anyway, then the United States doesn’t need to be in Paris to be an innovator and a global leader in the energy markets for conventional fuels, for nuclear fuels, or for renewable fuels.

Bob Ambrogi: Jeff that’s, is that sort of your position? I mean you wrote a piece last week recently for the Hill that talks about the fact that despite the administration’s back steps I guess on environmental regulation that in fact the horse is kind of already out of the gate in a lot of ways.

The corporations and governments are continuing to move forward to reduce greenhouse gas emissions and that there’s a lot of support for that among citizens of the United States, both political parties. So, is the market already driving what the Paris Agreement was striving for and if so, does that make the agreement unnecessary or redundant?

Jeffrey Gracer: Well, I agree that the market is a major driver here, but I don’t agree that it makes the Paris Agreement redundant and it would be perfectly acceptable to many people if the president, this administration stayed in Paris and said you know what we’re going to get there in a different way.

(00:15:01)

I would love to see the country stay in Paris and have a really meaningful debate about whether market-based mechanisms rather than regulation could get us to more meaningful greenhouse gas reductions in a more cost-effective way. That discussion that I think would be very productive and I was hoping that, that would be the approach taken by this administration.

You can find another way to get there. It could be market-based. It could be the Climate Leadership Council proposal by James Baker, Henry Paulson, George Shultz, and other respected conservative people who have significant government experience.

But to withdraw from Paris, I think is to send a signal that a certain hostility to the process, the transition that’s underway which I think is really in a sense a self-inflicted wound and an unnecessary step for the reasons I discussed earlier.

In terms of the economic interests behind the transition that we’re in, they’re very powerful. The “We Are Still In’ coalition which emerged right after the president’s announcement has 1400 entities, states, cities corporations, universities. They represent over 6.2 trillion dollars of the US economy, 120 million people. These aren’t just Ben and Jerry’s although that’s a significant company part of a larger corporation Unilever. It’s Amazon, it’s Mars, it’s Adobe, brand names that people recognize.

So, these are not just the environmental groups, although the environmental groups have valid perspectives on this, but these are states and cities, 143 cities at last count, I think nine states, over a thousand corporations that are saying, this is just not a good way to go and these companies are sending the world a message that they are going to continue this work.

So I think it’s unfortunate. I don’t think it’s the end of the world in the sense that everything’s going to unravel but I think it’s going to make it harder to harness the markets and as I said when I just started my comments, I would really like to see a discussion of conservative solutions to climate change and market-based mechanisms, that would be a step forward.

Bob Ambrogi: Before we continue our discussion, we need to take a short break. Please stay with us and we will be back in just a few months.

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Bob Ambrogi: Welcome back to Lawyer 2 Lawyer. This is Bob Ambrogi. My co-host J Craig Williams is away today. Joining us as guests are attorney Jeffrey B. Gracer from the law firm Sive, Paget & Riesel in New York City, Nick Loris, an economist, who focuses on energy, environment and regulatory issues as the Herbert and Joyce Morgan fellow at the Heritage Foundation in Washington DC.

We are talking about President Trump’s decision to withdraw from the Paris Agreement. Nick, President Trump has said that he has perhaps as interest in renegotiating the agreement. Jeffrey was just commenting on wanting to know what the perhaps conservative approach to this would be. What do you see as an appropriate approach to this? What might a renegotiated agreement look like that you think would be both economically productive and environmentally productive?

(00:19:53)

Nicolas Loris: Yeah, well, I do think we need to start from the realization that while renewables and natural gas are penetrating the market in significant ways, there are vast majority of developing nations who are continuing to pursue and build coal-fired power plants. A climate action tracker report from 2015, estimated that more than 2400 would be built by the year 2030 and maybe not all of those will be built but it’s still a significant amount.

I bring all that up because again I think it’s going to be very difficult to reduce greenhouse gas emissions in a significant way that actually mitigates global temperatures. So what I would like to see the focus on is actually finding solutions that if you are concerned about climate change, will help people better adapt to a changing climate and we see time and time again economic growth allows people to have more resources and more wealth to deal with all sorts of problems but also especially environmental problems.

And having the developed world have better standards of living and access to energy will give them more heat when it’s cool, will give them air conditioning when we’re facing heats or droughts whether they’re caused by man-made emissions or not, we can have resources to build higher and stronger sea walls and better and stronger buildings. Those activities and investments make a lot of sense to me.

The other thing I think, we can do when talking about conservative solutions is get the government out of picking winners and losers among energy sources and technologies. The reality is we spend way too much taxpayer money both here in the United States and abroad trying to pick what’s going to be the next future energy source or trying to keep old ones on board.

So we need to get rid of subsidies for renewables, for natural gas, for oil, and nuclear and let the market truly drive our energy future while making sure we reduce those criterion pollutants that are known to have adverse effects to human health and the environment and that’s really I think where the priority is for a lot of these developing nations which they’ve tended to ignore.

Look at China their air and water quality problems have nothing to do with CO2 emissions. They have to do with the fact that they’re not addressing the black carbon and the smog issues that really are known to have those adverse impacts. So I think we need to talk about having those environmental improvements be part of the discussion as well and not just make this about climate.

Bob Ambrogi: Jeff, I one thing that I find very confusing in reading about this issue is the question of at what point the United States actually can withdraw from this agreement. I’ve read different reports saying anywhere from a year to four years before the US can actually withdraw from it. Do you know, legally speaking, what are the commitments of the United States in terms of providing notice and going through the process for withdrawing from this agreement?

Jeffrey Gracer: So the basic answer to that in terms of the path the president has identified is three years after the agreement goes into effect you can serve notice of an intent to withdraw and then a year after that you can actually withdraw. So when you look at the calendar and I don’t have the dates in front of me but when you look at the calendar, it basically puts the date when the president could withdraw. I believe it’s one day after the next presidential election. So it’s four years out.

Bob Ambrogi: So he’s stuck with it during the term of his presidency.

Jeffrey Gracer: Yeah, the country will be in the agreement. The question will be whether the United States does anything to implement the commitment it had previously made and I think it appears that will not happen, which is unfortunate and again I would say if the president has a different view, he should come forward with other ways to do it.

I wanted to talk a little bit about some of the earlier comments about the extent to which this agreement would actually make a difference and what’s happening in China and India an adaptation if I might if that’s okay.

Bob Ambrogi: Please go ahead.

Jeffrey Gracer: First of all, this notion that the agreement would only make a minor difference in terms of two tenths of a degree at some point far down the road, it has been disputed by a lot of serious analysis including the authors of the report that at MIT that have been cited according to the author’s improperly for that proposition.

It’s hard to know exactly what the impact would be because you have to wait until people take the action but I think that the more reliable information that I’ve seen is that it could be anywhere from six tenths of a degree to a full degree and that doesn’t sound like a lot but actually when you look at the science that can have a very, very big impact on global temperature and carbon emissions and the stability of the environment.

(00:24:56)

So, I think that’s a little bit overstated at least based on. I haven’t done the analysis myself. I’m not a scientist or an economist, but there’s definitely significant debate about that.

In terms of China and India, I mean what we see, and Nick is absolutely right, China has a very, very serious pollution issue and India has many, many people who don’t have access to electricity but what we’re seeing in China is that they are a very centrally planned economy and when they decide they’re going to do something, they actually do it and can do it much more rapidly than other and other economies can. And so they’re slated to be way ahead of their commitments at this juncture and there’s quite a bit more transparency.

In the past, there has been some shading of the facts, but they appear to really to understand that it’s in their self-interest and frankly that it’s a matter of survival for them to solve the problems, the conventional pollution problems and also the greenhouse gas problems that they have in order to serve their people. And in India Prime Minister, Modi, is embracing solar in a very big way and solar, he views solar as the answer for access to electricity, so there are different ways to do it.

I don’t think that complying with this agreement means that people are condemned to sit in the dark and poverty. In fact, I would say that if you want a better standard of living and do what’s morally right, you change the way you bring wealth and a better standard of living to people in those countries. In China, they’re not going to have a better standard of living if they can’t breathe, so they’re going to have to do something about it.

And the other point is I agree adaptation is important but you also have to try and mitigate the impact. There is no way to build walls around the environment that we live in. There’s only so much that you can do to adapt and at a certain point, you won’t be able to adapt your way out of it.

So, I think it’s critical that we get control of these emissions that we reverse engineer how we generate, how we use energy and the other point is that companies are saving not just millions but billions of dollars by saving energy and by doing things differently and being more efficient. So, it’s actually good for business, not bad for business and it’s creating new jobs, hundreds of thousands of new jobs.

Bob Ambrogi: Nick I’ll give you an opportunity if you want to respond to any of that.

Nicolas Loris: Well I would just say if it’s good for business and they’re going to save money, they’re going to invest in those technologies anyway. Businesses and people inherently like saving money and so you don’t need regulations to force people to save money. You don’t need regulations to force businesses to save money.

I will push back a little bit on the impact of what these regulations and what Paris would do. I don’t think it was just the MIT study that demonstrated that Paris would have a negligible impact on climate and you can play around with these numbers yourselves.

There’s this model for the assessment of greenhouse gas-induced climate change or the magic model that was developed by scientists at the National Center for Atmospheric Research under funding from our own Environmental Protection Agency and you can choose which climate sensitivity you want. You can choose how aggressive you want the carbon cuts and greenhouse gas emissions cuts to be for not just the United States but the industrialized world in the developing world.

And you can have some pretty significant assumptions in terms of where the climate is headed and choose towards the 4.5 degrees Celsius end of the climate sensitivity and still have very deep emissions cuts and you’re not really mitigating global temperatures very much.

And so again I don’t mean to be a complete naysayer but I really do believe that this attempt that we can actually do something and have enough hubris to think that we can mitigate global temperatures and somehow fix this collective action problem while still gaining access to affordable, reliable energy for both the developed world and the developing world is just a very much near impossible task.

The other thing I will say with regards to your initial question about getting out of Paris so the other thing the Trump administration could do and get us out of Paris in a year is to withdraw from the entire United Nations Framework Convention on Climate Change which is what we recommended because President Obama submitted this through as a sole executive agreement and it was done so through this framework, we could leave the UNFCCC and everything we’re a party to which would include Paris within a year that would be the fastest way to get out which I think is why you’re hearing some confusion as to whether it’s one year or four years.

(00:30:02)

Bob Ambrogi: All right thanks. We’re just about out of time here and I want to give each of you an opportunity to give us your closing thoughts on this and I would also invite you to share any contact information with our listeners, so they could follow up with you if you want to do that. So Jeff Gracer, let me start with you, your closing thoughts.

Jeffrey Gracer: Well I think that it’s very easy to talk about doomsday scenarios and the fact that this just can’t get done and what I’m seeing and I think what many people in the business community are seeing is that it can get done.

There are a lot of success stories out there and we should be building on that and I think that one can have a debate about whether regulation, a particular regulation, is the best way to go but being in an international framework where everyone in the world is trying to be smarter and to do more with less and to emit less pollution, just can’t be a bad thing.

We have to try and I think that a lot of the doubt about the science is we’re past that at this point for many people. I think about 20% of America doesn’t believe the science but 80% either believes it or is strongly inclined to believe it. And we see all around us the evidence of what the models have been telling us would happen.

So it’s right now, it’s happening right now. So, let’s get to work and get it done and use the markets and use business savvy and build on success and have some assistance from state and local government, corporations, and hopefully eventually people in Washington.

Bob Ambrogi: Thanks a lot. I know your firm is sprlaw.com. Is there any other information you want to share in terms of how people could follow up with you?

Jeffrey Gracer: My email is on our website, so that would be fine and my telephone number. Thank you.

Bob Ambrogi: Sounds good, all right. Nick Loris you get to have the last word today.

Nicolas Loris: Well, thank you for having me and I would say that whatever one thinks about climate change and the science behind it and I do believe the climate is changing and that yes man-made emissions are certainly playing a role, although I don’t think we’re headed towards catastrophic warming.

And if you look at some of the findings from the Intergovernmental Panel on Climate Change, even they suggest we’re not really seeing any type of trend in terms of intensity or frequency of natural disasters whether it’s heat waves or tornadoes, droughts, floods, hurricanes.

That said the climate is changing and yes we’ve seen warming because of man-made emissions but this is a costly ineffective approach in terms of coming up with a solution to any problem even if it is a problem and there’s nothing about leaving this agreement that it prevents all these businesses that were supportive of Paris from continuing to invest in new energy technologies because the reality is the market for energy is six trillion dollars and projected to grow one-third by the year 2040 and we have more than 1.3 billion people that don’t have access to electricity, let alone reliable affordable energy.

So, there’s a huge market incentive for the private sector to pursue those next energy technologies without the aid of the taxpayer. We should make sure that we’re not subsidizing energy sources but also ensuring that we’re not driving out energy sources through regulatory diktat or the devoid of any meaningful environmental benefit. And you can check out my work at the Heritage Foundation. It’s heritage.org. My email address is on that website as well.

Bob Ambrogi: Well thank you very much to both of you for taking the time to be with us and share your insights on this issue. We’ve been talking with Jeffrey B. Gracer from the law firm Sive, Paget & Riesel in New York City and Nick Loris, an economist, with the Heritage Foundation in Washington DC. Thanks to both of you for your time.

Jeffrey Gracer: Thank you.

Nicolas Loris: Thank you.

Bob Ambrogi: And that brings us to the end of our show today. This is Bob Ambrogi. Thanks for listening. Join us next time for another great legal topic when you want legal think Lawyer 2 Lawyer.

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The views expressed by the participants of this program are their own, and do not represent the views of nor are they endorsed by Legal Talk Network, its officers, directors, employees, agents, representatives, shareholders, and subsidiaries. None of the content should be considered legal advice. As always, consult a lawyer.

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Thanks for listening to Lawyer 2 Lawyer produced by the broadcast professionals at Legal Talk Network. Join J Craig Williams and Robert Ambrogi for their next podcast covering the latest legal topic. Subscribe to the RSS feed on legaltalknetwork.com or in iTunes. The views expressed by the participants of this program are their own and do not represent the views of nor are they endorsed by Legal Talk Network, its officers, directors, employees, agents, representatives, shareholders, and subsidiaries. None of the content should be considered legal advice. As always consult a lawyer

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