President Trump has expressed little interest in fighting climate change. One of his key cabinet officials is even asking to assess whether humanity will benefit from a warming climate in order to undermine environmental rules.
But even as he works to accelerate oil and gas production, Trump's economic approach could incorrectly reduce greenhouse gas emissions as consumption slows down in response to the world trade war.
However, the planet's reprieve will be short. In the long term, tanking the economy with harsh tariffs could hinder progress, as the volume of clean energy deployment depends on overseas supply chains and voters are unlikely to support climate policy when financially stressed.
Carbon emissions are primarily a by-product of making places and things that we go, and have always led to economic growth. Forecasters increasingly predict that Trump's aggressive use of tariffs could lead to the economy in a recession as businesses and consumers cut spending in the face of rising prices of imports.
“When you're talking about traditional recessions, there are fewer people, fewer things, fewer things, and fewer investments in capital goods,” said Alex Heil, senior economist at the conference committee. “And just slowing down economic activity could reduce carbon emissions.”
That's what happened in the last two recessions. The world's carbon emissions were subdued slightly before the upward march resumed. (Since 2008, US emissions continued to decline as cheap natural gas replaced coal. It is also possible that similar peaks are approaching elsewhere in the world.)
There are already signs of this event. Airlines are forecasting less traffic, with fewer homes being built. After completing panic pre-duty purchases, consumer-oriented companies expect sales to decline as customers paint their shopping lists. The end of the De Minimis exemption could result in much less flimsy yet trendy clothing across the ocean as shipments worth up to $800 could enter a country with no national tariffs.
There is a certain irony here. US environmentalists have long been asking to impose some sort of tax on carbon to discourage dirty products and encourage cleaner products. Tariffs prevent people from purchasing foreign products, many of them are carbon intensive. So, while carbon taxes will reduce emissions more directly, Europe is planning a new tariff system aimed at carbon-intensive products, from a climate standpoint, broad tariffs are better than anything else.
It is also true that globalization has driven a climate-warming gas explosion by allowing citizens of wealthy countries to fill large homes, furniture and cars at a low cost. As environmental regulations became more strict in Europe and the US, more contaminated factories moved to developing countries with more looser rules.
However, it is not clear that a trade war would reverse the process. For one thing, even if the US imposes tariffs, shipments of goods could simply be redirected rather than overall downward.
“The question is, are we really cutting cross-border trade significantly, or are we just looking at trade across different borders?” said Ethan Zindler, chief policy analyst at Bloombergnef. “If you get trade route A vs. trade route B, you can have a high emissions, which is why it's very difficult to know.”
Even if international transport decreases and tariffs redirect consumption on domestic goods, it does not necessarily help. Most emissions associated with global freight actually come from the port of entry to warehouses and retailers via trucks.
Furthermore, if we go back to the time when the world bought more within our own borders, and it's a big “what if” and build a new factory that may not work as efficiently as China's huge industrial zone, we can increase the carbon needed to produce sofas or pairs of shoes.
The bigger factor for emissions in the medium term is how trade restrictions and economic recession have affected new sources of electricity.
Recessions always lower gas prices. Concerns about the Trump administration's economic policy have already done so. Also, steel and aluminum tariffs have become more expensive to operate oil drilling rigs, slowing drilling.
However, tariffs cut both ways of energy, and renewable sources could suffer even more. Solar arrays, wind farms and electric vehicles are now built with products produced in other countries, such as batteries and turbines. Most of them are currently subject to at least 10% tariffs. (For solar panels, the duties are much higher.) Retaliation measures such as China's export control on rare earth minerals required by clean energy technologies will expand their effectiveness.
The Biden administration worked to build a domestic source of solar panels, batteries and other components needed to build renewable energy backed by billions of dollars of subsidies. We also used tariffs to protect some of these industries and planned more when they were up and running. But they are currently not producing enough to supply domestic demand.
“It's what we're building a factory right now. Now we need equipment to get it in, and it requires a lot of steel,” said Eric Vannostrand, whose tariffs on Joseph R. Biden Jr. has become hardened and difficult, and whose investment is already high and mitigating the potential of energy that is investing in.
Trade barriers also make it more difficult to adapt when climate-related disasters occur. If drought wipes out wheat and soy crops, moving to imports without paying exorbitant taxes could ease the blow. Reconstruction after a hurricane or wildfire is much more expensive without imported materials, cement and electrical appliances.
And recessions are difficult for the average consumer, and they lose their jobs and cut back on time. It will be even more difficult to invest in electric cars or heat pumps for their homes, even if they may have less laundry to save on energy bills (and even more so if Congress abolishes Biden-era subsidies for those items).
“We're excited to see you all knowing that we're a part of our energy-centric think tank,” said Brian Peirce, a fellow at Resources. By reducing the upgrade cycle, emissions could continue to decline even in healthy economies.
However, the more significant implications of the trade war and subsequent recession began in the long term, and none of them is good for the climate.
First, the pathway for decarbonization depends heavily on how quickly the technology progresses. As trade barriers rise, exports to other countries become more difficult. It reduces the markets available to entrepreneurs and reduces incentives to take risks and invest.
Second, even if Americans elect a more climate-friendly president and Congress in the coming years, the recession will not usually serve ambitious environmental policies. Jonas Meckling, a climate-wide fellow at Harvard Business School, said that relieving immediate economic pain tends to prioritize.
“If this brings a contraction in economic growth, we know that climate is not the best agenda item for voters, and everything is much more focused on just stimulating the economy,” Dr. Meckling said. It's already happening north. Faced with rising unemployment and high costs, Canada has retreated to its own consumer carbon tax.
This is also true at the international level. Economic anxiety focuses on the nation when international cooperation is needed to address climate change. Celebrating global conflicts also encourages leaders to concentrate resources on building their military forces, leaving them with little money to support the transition to low-carbon energy, industrial processes and agriculture.
So climate economists offer little comfort, even the carbon silver lining of an imminent recession.
“We've seen a lot of experience in economics at the University of British Columbia,” said Brian Copeland, professor of economics at the University of British Columbia. “But I think it simply makes the long-term transition to a carbon-intensive society even more difficult.”
