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The biggest risk of all: financial world rebukes Trump on Paris Agreement withdrawal

Trump's decision to take the US out of the Paris Agreement has left world and business leaders stunned. In terms of risks, this is huge and has shocked business executives responsible for mitigating risks, from insurers to corporate financial risk officers looking to safeguard supply chains across the planet. France's president, Emmanuel Macron, said it best when he said “Make our planet great again”

World of finance drops collective jaw at Trump's Paris decision

Here are some of the reactions from prominent voices in the world of finance and business who have also criticised and commented on Trump's decision:

  • This Bloomberg editorial called the decision 'Trump's big Paris mistake' and opened with the lines: “Any rational, responsible business leader, faced with an existential threat to his enterprise, would take steps to manage the risk. With his decision to leave the Paris climate accord, President Donald Trump is putting the lie to one of his central claims: that he would run the country like a business.”
  • Goldman Sachs's chief executive Lloyd Blankfein tweeted: “Today's decision is a setback for the environment and for the US's leadership position in the world. #ParisAgreement"
  • JPMorgan's Jamie Dimon said: “I absolutely disagree with the administration on this issue, but we have a responsibility to engage our elected officials to work constructively and advocate for policies that improve people’s lives and protect our environment.”
  • And BlackRock's Larry Fink commented: “I do not agree with all of the President’s policies and decisions, including today's announcement to exit the US from the Paris Agreement which I believe is a critical step forward in addressing climate change.”
  • GE's chief executive Jeff Immelt wrote on Twitter: “Disappointed with today's decision on the Paris Agreement. Climate change is real. Industry must now lead and not depend on government.”
  • Cargill's chief executive David MacLennan said: “It is extremely disappointing. Exiting international accords like the Paris Agreement will negatively impact trade, economic vitality, the state of our environment and relationships amongst the world community.”

Support for Trump

But some voices from the US coal and energy industry were supportive of President Trump's move. Barry Worthington, the executive director at the US Energy Association said: “The US energy industry will continue to reduce emissions, Clean Power Plan or no Clean Power Plan, Paris accord, or no Paris accord. A renegotiated plan will be far superior to the poorly negotiated agreement. We are confident that President Trump took the right step today, putting US interests first.”

The Paris Accord and its weaknesses

The Paris Agreement is an agreement within the United Nations Framework Convention on Climate Change (UNFCCC) dealing with greenhouse gas emissions mitigation, adaptation and finance starting in the year 2020. It was a consensus that was hard-won after many rounds of talks. The final text of the accord has been criticised for lacking firm commitments from nations on the amount of emissions they will reduce to keep global warming below the target of 2 degrees C. The agreement lacks a binding enforcement mechanism to measure and control CO2 emissions, so reductions by each country are voluntary and climate experts say this won't be sufficient to ensure a slowdown in global warming. Trump says he can negotiate a better deal. Can he? Considering the difficulties of reaching consensus among 195 countries for the current Paris Agreement, this seems like an unlikely scenario.

Some hope

It's also interesting to note that Trump's decision is unlikely to increase his popularity at home, as almost 70 per cent of Americans (comprising a majority of people across 50 states) support the Paris climate agreement. Since the president made his decision known yesterday, a group of 10 states have pledged their support for the Paris Agreement objectives and have committed to upholding it within their borders. These 10 states (California, New York, Washington, Colorado, Connecticut, Hawaii, Massachusetts, Oregan, Rhode Island and Virginia) make up 30.1 per cent of the US population, 35.3 per cent of US GDP, and 17.8 per cent of US carbon dioxide emissions.

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