Paris Unbound

Why would the United States, a nation that claims to be “the world’s leader in environmental protection,” withdraw from a global forum that would showcase its impressive success?

Is it because its President doesn’t really believe that the United States leads the world in environmental protection? That’s not a plausible explanation. President Trump made that statement very convincingly when he announced his decision to withdraw from the Paris Accord. He then elaborated by saying:

“The United States, under the Trump Administration, will continue to be the cleanest and most environmentally friendly country on Earth. We’ll be the cleanest. We’re going to have the cleanest air. We’re going to have the cleanest water. We will be environmentally friendly …”

So why would he withdraw? Is it because the Agreement would legally bind the United States to economically disadvantageous obligations? He did make those claims, but he also referred to those very constraints as non-binding in nature.

Oddly enough, “non-binding” wasn’t the word that Republican Senator Mike Lee of Utah employed to explain why he supported President Trump’s withdrawal decision. To the contrary, Lee said that “… we can’t give excessive, unfettered power to a president to act alone, to bind an entire country to a set of principles, a set of rules that the president … makes.”

Lee was actually referring to former President Obama and not President Trump. He was arguing that Obama inappropriately signed the Paris agreement, and bound the United States to its terms, without the approval of the Republican Congress. According to Lee, “… we have to get back to the fact that this power, the power to enter into binding international agreements, this is a shared power.”

Clearly, there is a fundamental contradiction between Lee’s description of the Paris pact as binding and Trump’s description of it as non-binding. And making this contradiction even more confusing is the fact that the European Commission — which strongly supports the Paris Accord — also refers to it as a legally binding agreement.

So which is correct? Does the Paris agreement bind its signatory nations to its terms? If it does, then even a nation that considers itself “the world’s leader in environmental protection” may feel justified in withdrawing if those binding requirements are onerous in nature.

The answer to this question can be found in the European Commission’s description of the Agreement. Apparently, the Paris Accord binds all nations to set long-term goals, to report to each other on their progress, to strengthen their societies, and to acknowledge the need to cooperate with the international community. But it contains no verification, enforcement, or punishment mechanisms at all.

In other words, the Paris Accord only binds nations to act in good faith while attempting to reduce their greenhouse gas emissions. It doesn’t otherwise bind any one to any particular course of action. That’s why many experts refer to each nation’s greenhouse gas reduction goal as a “… voluntary pledge to reduce emissions …”

With this in mind, let’s return to our central question. On PBS NewsHour, Senator Lee proudly promised that the United States “… will proceed … as a global leader in environmental regulation. We are a global leader in the rule of law. We have brought down emissions in this country through our legal system and through technological innovation.”

So why would America walk away from an international forum that would recognize its success? A pact that isn’t legally binding in any meaningful sense, other than the sense that it binds the United States to continue to try to maintain its position as a global leader?

If the true underlying rationale for withdrawal is not legally motivated, or economically motivated, or environmentally motivated, it may well be politically motivated. In other words, America’s toxic political system may be the driving force behind its President’s decision to “unbind” the nation from the non-binding Paris Accords.

GE Applies The Pressure

How far should American firms go when playing economic hardball with government officials? Is there a point where “tough but fair” corporate behavior crosses the line into inappropriate ethical behavior?

For instance, consider General Electric (GE), which has been rolling up its sleeves and engaging in hard nosed negotiations lately. A few months ago, it announced that it was interested in moving its corporate headquarters out of its long time Connecticut home because of its state tax burden.

State government leaders might have been nonplussed by GE’s position, given that the global goliath only pays Connecticut $250 per year in state income taxes. But Governor Malloy is negotiating with the firm any way, offering additional incentives to keep its headquarters in the Nutmeg State.

Texas, well known for its low tax, light regulation, business friendly tradition, has also entered the fray. The city of Dallas met with GE executives in an attempt to attract their corporate headquarters to the Lone Star State.

But then GE announced that it was no longer interested in moving to Dallas. Its reason? Apparently, Texas’ senators and representatives in the federal Congress oppose the continued existence of the national Export Import (Exim) Bank, a governmental fiscal entity that helps GE structure financing packages for its global customers.

Is it fair to punish Dallas’ municipal government and citizens because its federal representatives oppose what CNBC calls one of hundreds of obscure federal agencies you don’t usually hear much about ? Whether or not you believe so, perhaps we can all agree that GE is politically even-handed in its hardball tactics. After all, Texas is one of the reddest of all red Republican states, while Connecticut is one of the bluest of all blue Democratic states.

And GE hasn’t stopped there. Last month, it announced that it is moving hundreds of jobs out of the United States entirely because of the possible expiration of the Exim Bank. And last week, GE declared that it is ending its clean-up of toxic pollutants in the Hudson River, even though women of childbearing age and children under 15 are still advised to avoid eating fish caught in its waters.

To be sure, no one has accused GE of doing anything illegal regarding these matters. It is simply choosing to play hardball in a manner that benefits the financial position of the firm.

But is it possible that such perfectly legal behavior can simultaneously represent ethically inappropriate activities? If you believe that corporations bear some responsibility to their human neighbors and their natural environments, it is a question well worth pondering.