Climate Change and Politics

Written by Enrique Lendo, Business Development Mexico Advisor.

The United States of America (US) is the second largest emitter of greenhouse gases after China. In 2018, it emitted 5.41 giga tones, contributing to 15% of global emissions. However, the relevance of the US is not limited to its emissions, it also has strategic roles in international negotiations, production and global trade, innovation, and capital markets. Had the US not come to an agreement with China in 2015, we might not have a Paris Agreement today.

It is for that reason that the Thump’s administration announcement to leave the Paris Agreement hindered the trust of contracting parties and worried many for the potential measures that the US would take at the national level with regards to climate change. Under the arguments of energy sovereignty and employment protection, the Trump´s administration has stood out for questioning climate science, reverting dozens of environmental laws and promoting oil and gas exploitation in public lands.

Despite being the largest economy in the world, the US is highly vulnerable to the effects of climate change. This year is expected to be the warmest in the history of the country and the state of California is currently experiencing a record intensity of wildfires with over 3.4 million acres affected, equivalent to 3% of its surface. Some weeks before, Huracan Laura left 25 billion worth of damages in southern US.

Increasingly, north Americans have become more sensitive to climate change and, even conservatives, are beginning to link some of the impacts in their surroundings with this global phenomenon. Two-thirds of U.S. adults say the federal government is doing too little to reduce the effects of global climate change and 64% say protecting the environment and dealing with global climate change should be top priorities for the president and Congress. Hence, climate change will have a more significant role in the upcoming presidential elections than in previous ones.

In order to set the path towards carbon neutrality in 2050, Joe Biden proposes to invest $1.7 trillion dollars in clean energy while creating 500 thousand new jobs. He has also promise to rejoin the Paris Agreement and to set a carbon tax in the US. While the Republicans´ proposal is ambiguous, they have realized that addressing climate change might look appealing to new generations and some private sector industries. It is for this reason that the Trump administration has proposed to plant a trillion trees and increase investment in carbon capture and storage without harming the fossil fuel industry.

Surprisingly, last week the Commodity Futures Trading Commission released the report “Managing Climate Risk in the Financial System” with concrete recommendations to measure, report and mitigate climate change risk. The announcement is worth noting for being the first time that a federal government appointed commission openly recognizes that climate change poses a systemic risk to the US financial markets.

As citizens, we have three options to influences decision making towards green and sustainable economic growth. On one hand, we can influence companies to produce sustainable goods and services through our purchasing power. On the other hand, we can propel capital markets by investing in low environmental impact funds. But the option with the greatest potential of influence rests on electoral processes.  The US presidential elections this coming November will define, among other things, the impact of that country to the global environment and the possibility to transit towards a low carbon global economy. I wander when will Mexico be ready place the environment among the top priorities within our political decisions.

Article originaly publised in Reforma news paper.

David Poveda