Au Revoir, Baby: Why the US will Rejoin the Paris Agreement

President Trump’s recent Executive Order cites a requirement to make financial transfers to third countries as grounds for US withdrawal from the Paris Agreement.  It’s useful to fact-check this before catastrophising about the withdrawal’s impact on climate change.

In fact, Paris scarcely imposes binding obligations to make financial transfers. It refers only to a funding “goal” of USD300 billion per annum between all developed countries. The goal’s not even close to a binding number, because so many points are left unsettled. For example, there is no apportionment of goal-amount between developed (or developing) countries, no eligibility criteria and, although funding may take the form of loans, no defined cost of funds. Developed states need not even themselves provide the finance; this may come “from a wide variety of sources, public and private, bilateral and multilateral, including alternative sources.”

If payments to third counties aren’t the real withdrawal-rationale, what is the crux of it for the US, and what might that mean for climate change? One thesis relates to the US’ complicated relationship with multilateralism, an issue which is unique neither to climate issues nor the new administration. Look at Nixon’s ending of the Gold Standard in 1971 and Bush’s abandonment of Kyoto over 20 years ago. And recent, feeble multilateral outcomes, such as COP 29 in Baku, may be said to justify an America First approach; the same goes for multilateral initiatives which are not obviously pro-US interests, such as last October’s BRICS+ summit with its focus on, for example, the creation of a new interbank payments system as alternative to SWIFT.

But history shows that crisis will bring the return of multilateralism: The Global Financial Crisis of 2008 and global debt crisis of 1982-1983, for example, quickly saw international leadership forced into negotiations to mitigate contagion, often through US-sponsored institutions such as the IMF. As America First enters its “What Next?” phase, the question of how climate change can be mitigated unilaterally will weigh heavily: Going it alone will prove even more difficult with the weather than with financial markets.

When will climate chaos, in the domestic US, intensify sufficiently to bring about this re-engagement?  Tragically, a recent paper by the US National Oceanic and Atmospheric Administration indicates that this may not take too long: “In 2024, there were 27 individual weather and climate disasters with at least $1 billion in damages, trailing only the record-setting 28 events analyzed in 2023. These disasters caused at least 568 direct or indirect fatalities, which is the eighth-highest for these billion-dollar disasters over the last 45 years (1980-2024). The cost was approximately $182.7 billion.” (The southern California fires started several weeks later).