Face it Paris partisans, the climate agreement was a shakedown

July 30, 2017 12:27 PM
A Modern Trader Editorial

On June  1,  the day that President Donald Trump withdrew the United States from the Paris Agreement, everyone from CNN panelists to the local bartender self-appointed themselves as experts on environmental economics and international climate policy.

The partisan reaction to the United States’ withdrawal from the Paris deal was so vitriolic, one would have thought the oceans had already swallowed us.

Few pundits seemed to have read the details of the deal. Their talking points made that obvious. Anyone who challenged this horribly designed policy was branded a denier of climate change. Opposing the nonsensical agreement meant you were an oil company shill, or meant you wished that the earth would drop dead. 

Days later, when the “Wikipedia diploma” on climate policy had been discarded for the next daily outrage, people who understood this deal’s politics and financing couldn’t get the alarmists to see the obvious: The United States is better off without this accord.

The Paris Agreement is a watered-down framework from the 2010 Copenhagen accord (or shakedown) that collapsed because no rational actors wanted to commit to massive emissions reductions at the expense of their own economic growth. The prisoner’s dilemma is real, but President Barack Obama seemed willing to choose the dominated strategy for the sake of “getting a deal done.”

Why was the accord bad for the United States? At the heart of these accords is the premise of “climate justice.” This movement started with a rational environmental message but quickly devolved into an argument that we must engage in a radical redistribution of wealth from rich nations to impoverished nations for clean energy technologies and climate reparations. 

Under Paris, each nation voluntarily committed its own selected cuts to global emissions. Wealthier nations announced plans to transfer up to $100 billion to poorer nations by 2020, with the United States taking the lead. Without money from the West, the poorer nations said they will keep polluting. And the end goal is comical: If all went perfectly to plan, temperatures on earth would only increase by 0.2% by 2100. 

The list of countries that would get money includes Yemen, Bolivia, Venezuela, Iran, South Sudan, Cuba, Egypt and the Central African Republic. These nations all rank very low on the Heritage Foundation’s Economic Freedom Index and have high levels of self-induced poverty; they all rank very high in corruption. Also, they all aren’t exactly on the best terms with the United States.  

For U.S. supporters of this deal, emotions and the need to do something trumped results, and history shows that big transfer schemes like this fail to accomplish their goals due to a lack of accountability. 

How is it that advocates can still argue in favor of a large international transfer of wealth when we have the example of $1 trillion in spending that failed to alleviate widespread African poverty, and the oil for food programs of yesteryear, which simply enriched tyrants? These advocates define insanity by trying the same thing over again and expecting different results. 

But the Obama Administration needed a legacy, so his team overcommitted on cuts and transfer payments. China did not commit to reducing emissions until 2030. 

If people want a deal that redistributes wealth, they should require a network to ensure the money is spent accordingly. More so, the United States should demand greater market liberalization and economic freedom in these countries to help lift people out of poverty. That would be a fair trade for technology. But writing a blank check – given the history of global transfer schemes – is as mindless as the shrill talking points from the self-appointed experts who are now howling about the Cuban embargo or “tax cuts for the rich” based on a few articles they read from a 20-something blogger on Buzzfeed. 

About the Author

Garrett Baldwin is the Managing Editor of the Alpha Pages and the Features Editor of Modern Trader. An author and Baltimore native, he earned a BS in journalism from the Medill School at Northwestern University, an MA in Economic Policy (Security Studies) from The Johns Hopkins University, an MS in Agricultural Economics from Purdue University.