This is not another post lambasting Donald Trump - there seems to be quite a few people doing that already. I had been chatting about the impact of the USA President to leave the Paris Agreement with a friend and the its potential impact. This was a historic agreement between 190 countries to collectively reduce emissions to manageable levels and helping re-right the balance between human industry and environmental sustainability. Its successful completion was seen as a huge victory in the fight to try and slow down the harmful effects of several centuries of disregard for our dear planet.
Then, of late, Mr Trump decided to pull America out of the agreement citing protecting American jobs & economy as something he wanted to protect. This provoked a huge backlash, as would be expected, and whilst it is most definitely a setback, it may not be as bad as we all think.
Ultimately, government policy acts like a guide - investing money or changing a country's framework to encourage, incentivise & promote certain behaviours and, of course, certain results. For example, when we wanted to promote better road safety, the government installed more road traffic cameras, ran multiple safety awareness campaigns and increased the number of traffic police. It was successful.
However, government policy can only be successful when the actors involved are on the same page. There was a collective win for everyone to listen and heed these road safety warnings - reduced fatalities & better road safety. The opposite can be said for Mr Trump's brash move.
Indeed, the experts believe that regardless of government policy, fossil fuels are headed for an inevitable decline. So, the jobs which Trump wishes to protect will be adversely affected by any and all moves to not reduce carbon emissions. "Instead of helping our economy, as the Administration contends, withdrawing from the Paris Agreement will put us behind our major global competitors," said Thomas Vonier, President of the American Institute of Architects.
A bit closer to home, the UK and Ireland are both in incredibly strong positions to capitalise on not only the declarations of the Paris Agreement, but to also be a role model for other emerging countries and economies on the benefits of sustainability.
With energy & sustainability thought leaders like David Symons of WSP predicting that the low-carbon economy could make up 13% of the UK economy by 2050 (it constitutes only 2% at present), it is clear that there are enormous opportunities to be had. As their co-authored piece in the Guardian elucidates, the UK is a world-leading economy in terms of "manufacturing ultra-low emission vehicles and offshore wind turbines, piloting innovative ideas in energy, water and resource efficiency and providing financial and legal services for clean energy projects worldwide."
The great thing about this is that both the UK & Irish governments can now secure long-term economic growth whilst also drastically improving the environment we live in. Given the exciting opportunity ahead, one would hope that the UK government would push to create the conditions to let the green economy flourish. It will be interesting to see what their next steps will be.
Morgan Stanley equity strategist Eva Zlotnicka said the job losses in fossil fuels would likely accelerate regardless of Trump's policies. "As we've noted, economics are still driving, not regulation," said Zlotnicka in a note to clients after Trump's announcement. "Our energy commodities team's fundamental analysis of power generation economics shows that longer term coal cannot compete with natural gas or renewables (even on an unsubsidized basis)."