Trump Navigates around the Truth on Paris Agreement Costs

President Donald Trump justified his rejection of the Paris Agreement with a hot button political issue – jobs. The popular saying goes that the people vote with their wallets. So President Trump also framed his decision around prices. He claimed that “(1a) the escalating electricity prices attributable to the agreement (1b) would increase the cost of goods and services and (2a) put millions of American jobs at risk, (2b) particularly those in manufacturing and other energy-intensive industries”. To break these down, claim 1a is mostly true. Carbon caps or taxes to meet targets would increase carbon prices to sway consumption. The claim leaves out the important details that electricity can be provided efficiently and cleanly through renewable means. Also, fossil fuel prices will inevitably rise as scarcity makes their extraction less profitable.

From WikiCommons

Claim 1b is half true – in the short term, the claim is true but in the long term it is not. Trump’s claim about the price of goods and services is clarified in his assertion that national GDP would lose $2.5 trillion in ten years. This is factually incorrect – the projections that produced this number looked out over 20 years. Even with an accurate figure, the data is displayed in a misleading way. Typically, GDP change is shown as a rate (in this case, .55%) rather than a value ( These claims reflect the impact of a carbon tax on the economy, but research shows that they may be steep. Realistically, the US could meet its targets by 2025 while only reducing GDP by between .1% and .35% per year (Chen and Hafstead). So, in magnitude and connotation, Trump’s claim is wrong. But the point is fair. Certainly, the price of fossil fuels would increase under the Paris Agreement, relative to the recent record lows (Reuters). Since petroleum is an input in a wide range of products and transport of almost all goods relies on fossil fuels, these price changes would ripple through an economy. These are short term costs, though. That being said, the costs of inaction are significant and largely unknown. Ultimately, the economy is notoriously difficult to forecast. Some predict that global average GDP would decline by 23% by 2100, with dramatic variability around the world (Business Insider).The future of innovation remains in alternative energy, though, and the U.S. will lose its competitive edge in these areas if it does not take progressive action.

Explore global change in GDP from climate change here.

Claim 2a, that the agreement put millions of jobs at risk, is half true. President Trump expanded this claim in a speech to specify that changes in the energy sector after the Paris Agreement would cost the American economy 2.7 million jobs, including 440,000 fewer in the manufacturing sector. These losses are more realistically attributed to automation and new alternative energy sources. Claim 2b is mostly false. Coal employs only 160,000. To balance, jobs in these emerging sectors are rising – natural gas employs about 400,000, solar employs 374,000, and wind employs 102,000 (USA Today). Major corporations, including fossil fuel companies, endorsed US participation in the agreement (PBS). These growing sectors would expand, not contract, from participation in the Paris Agreement. The benefit of these new industries could be enormous.

From WikiCommons

President Trump’s claims are not patently false. With the communications and research capabilities of the White House, the President is able to add credibility to his spin. Outright lies on the campaign trail become blurrier when teams of staffers erode context. President Trump cites figures from conservative think tanks and fossil fuel lobbies to add authority. In perspective, President Trump’s justifications seem short sighted even if they are credible in the short term. The line between truth and lie is unclear. Reframing an issue can deceive in the guise of truth.

della Cava et al. “What the Paris Climate Agreement Withdrawal Means for US Economy” USA Today June 2, 2017

Pujol-Mazzini, Anna. “Could Companies be Made to Pay for Stoking Climate Change?” Reuters Sept. 8, 2017.

Rotman, David. “Climate Change is Going to be Very Bad for the Global Economy” Business Insider Jan. 1, 2017.

Schipani, Vanessa. “Trump on the Paris Agreement” June 7, 2017

Stavins, Robert. “The Economics (and politics) of Trump’s Paris Withdrawal” PBS June 6, 2017



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