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U.S. Withdrawal from the Paris Climate Agreement: An Interview with Michael Hinton of Allegro Development.

Areg Bagdasarian's picture
Program Manager and Research Analyst DataCapable

Areg Bagdasarian is an energy analyst and program manager covering the world of alternative energy vehicles, energy efficiency and technological change in the utility and smart grid world. He's...

  • Member since 2012
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  • Jun 12, 2017

              It’s not often that the values of so many developing and developed nations seem to be in synch, on something of such global significance and gravitas. The Paris Climate Agreement (Accord de Paris) though, has shaped up to be just that type of agreement. Building on the United Nations Framework Convention on Climate Change (UNFCCC) and addressing “greenhouse gas emissions mitigation, and finance” starting in 2020, the overall thrust of the agreement is to hold the increase in global average temperature to well below 2 degrees Celsius above pre-industrial levels.  As extraordinary as it was to have 197 countries come to a consensus on climate change, the Trump Administration’s decision to unilaterally withdraw from the accord was equally unsettling.  After President Trump’s Rose Garden announcement, the key question at hand seems to be how climate policy reform will be altered with the world’s largest economy bowing out of the agreement.

                First, let’s indulge in some background. The Paris Climate Agreement provides signatory nations with the opportunity to individually choose how they’ll contribute to curbing emissions. These so called nationally determined contributions, (NDCs)  must be ambitious and “represent progression over time” but are not centrally mandated. Unlike the Kyoto Protocols , the Paris Climate Agreement is not legally binding and the agreement does not specifically dictate the contributions of developing vs. developed countries. With proponents of the plan livid with the US decision, and detractors feeling expectedly smug that the deal would have restricted job growth with minimal environmental gains, things can get a bit fuzzy. 

                 From the view of job growth, statistical projections seem to be the best tool at hand for a plan that according to former president Obama could take up to four years to fully withdraw from.  The Conservative Heritage Foundation argues that the agreement would have driven up electricity costs for the average American family of four by between “13 and 20 percent annually”.  In a study by the U.S. Chamber of Commerce, the agreement would have cost 1.1 million industrial jobs centered around cement, iron, steel and petroleum refining. From an environmental view however, a U.S. withdrawal would mean an “extra 3 billion tons of carbon dioxide in the air a year” according to Climate Interactive predictions.

                In the eyes of Michael Hinton, Chief Strategy and Customer Officer of Dallas Texas based commodity trading and risk management software firm Allegro Development, though the agreement may have lofty targets, it’s essential to future energy policy.  “The goal is really to reduce emissions from fossil fuels, and I agree some goals are really very ambitious, but it’s what you need to do to protect the environment. The 2 degree Celsius goal is itself key to improving the environment.”

                Those engulfed in the notion that the Paris Agreement would be a net job killer, would do well to consider the other side of the coin. Namely, the broad spectrum of renewable sources of energy that continue to sweep across the globe. Today more new energy sources are made up of renewable energy sources (as opposed to fossil fuel based). Commodities like coal may eventually become an endangered species in the energy mix not because of left-wing policy decisions but because of economics. Cleaner sources like natural gas are dropping in price to the tune of over 50% less today than where they stood in 2014.

                 With the United States dropping out of the agreement, some, like David Gergen, advisor to both Democratic and Republican Presidents claim the president perpetrated “one of the most shameful acts” in U.S. History.  Whether his opinion truly hold water, the move will likely make it more difficult for the United States to cooperate on future international agreements whether environmental in nature or otherwise. And in more evidence of the overwhelming support for remaining in the agreement, Fortune 500 industry CEOs from some of the more unlikely places including diversified oil and energy companies like Exxon Mobil and ConocoPhillips reiterated their support.

                Had the US remained, Hinton believes that some of the biggest beneficiaries of the deal would have been the solar industry and wind farms.  But many states and cities across the United States have pledged to remain in the agreement and to plow ahead with many renewable reforms already in play.

                Though no longer an international signatory to the deal, America’s cities and private enterprises are understanding the importance of a varied energy mix and the need to stay compliant with both environmental and financial standards.  A diverse energy mix that includes renewables and some fossil fuels is a fact of life and enterprises will continue to seek out efficient ways to remain compliant as they seek to manage their day to day operations.

                Hinton’s Allegro Development helps customer understand their whole customer portfolios, and their fleets. “We help clients manages costs, compliance and the energy sources their plants use so they can forecast and plan appropriately to comply with regulations in planning and compliance.” While the White House has taken the United States in another direction officially, American companies and municipalities realize the importance of business compliance, and increasingly that includes compliance with local and state energy standards.  

                “Our solutions help bring transparency in daily operations, to help customer understand the demand they’re going to meet and how to do so while ensuring a proper ratio of generation association with it as well as renewable energy certificates.”

                Still holding the crown as the largest economy in the world and one of the top three emitters of greenhouse gases in the World (along with China, and India) American participation in any energy accord would seem crucial to overall global reduction targets.  Michael Oppenheimer, co-editor of the peer-reviewed journal Climatic change has said if the U.S.” lags, the noose tightens.”  But thanks to individual, business and regional concern and accountability for our delicate ecosystem, the march towards a more sustainable planet will continue with or without a formal seat at the table in Paris.

Robert Peever's picture
Robert Peever on Jun 12, 2017

I think it's time we did that. It doesn't mean that we don't know that survival depends on clean systems and new technology and non-polluting ways to do things. People who have been around for a while need to be there to give input on how these things can be done. And moving out on the limb with unproven technology and designs completed in the cloud without experience in the way things are done is disastrous. Using work around solutions in different ways is extremely dangerous. Without this as a burden and able to support our own people and system and avoiding personal empires and prejudicial technology selection maybe we can succeed.

Areg Bagdasarian's picture
Areg Bagdasarian on Jun 26, 2017

There really needs to be a comprehensive approach to this movement and several different competing technologies and approaches can work in parallel. We're moving towards a cleaner future whether we're part of the Paris Climate Accords or not and I'm also glad that at the state and local level, there's flexibility to do what's right without being beholden to federal standards.

Areg Bagdasarian's picture
Thank Areg for the Post!
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