Prof. Ioannou opines on US withdrawal from Paris Agreement

If the multiple reports are confirmed, and President Trump pulls the U.S. out of the landmark Paris climate accord (thus joining Syria and Nicaragua as the only other two countries that declined to join), then this would be a tragic error of epic proportions and of unprecedented global consequences. Climate change is real and so are its effects despite what Trump himself or his ignorant advisers, or the 22 or so equally ignorant Republican senators might stubbornly, short-sightedly and nonsensically choose to believe. Indeed, that climate change is real and that is caused by human activity is no longer an issue up for debate. That time has long passed.

In case of withdrawal, history and the future generations will judge Trump’s administration harshly not only because of the implications for the efforts to combat climate change at a global scale (grave as they are) but also because such a decision will greatly diminish, if not eradicate, America’s moral leadership around the world, with far-reaching adverse implications across a range of foreign policy, national security, and economic issues. In effect, the U.S. will become an unreliable country run by an administration that explicitly prioritizes greed, short-termism, isolationism and nepotism over science, reason, inclusive growth and global sustainable prosperity.

Sadly though, a decision to withdraw from the Paris accord would be consistent with the Trump administration’s overall attack on fundamental American values and institutions such as healthcare and human rights, and consistent with attempts to neutralize institutions, like the EPA, that stand in the way of environmental destruction or, more broadly, that stand in the way of Trump’s (and his rich associates’) financial interests.

Nevertheless, and without a doubt, eliminating environmental regulations and withdrawing from Paris will not only fail to jumpstart the U.S. economy as President Trump ignorantly claims, but in fact, in the long-run, it will significantly undermine the U.S. economy’s competitiveness - already China and the EU are rising to the challenge to fill the gap left behind by the failing American leadership - and will greatly reduce its potential to generate new, innovative businesses. Even in the short-run, the economic effects will be detrimental: for example, the U.S. is likely to lose access to the growing markets for renewable energy while competitors such as India, China and the EU grow their own presence.

The response to such a senseless act by the Trump administration – in fact, against the will of the majority of the American people – should be a renewed and strengthened international commitment to combat climate change and the maintenance of a global climate governance regime that will be effective in keeping global warming below the critical 2 degrees Celsius. This should be done in close collaboration with U.S. states such as California and New York, that have shown an extraordinary level of leadership in their efforts to reduce carbon emissions but also, in close collaboration with companies and corporate leaders that have genuinely committed their organizations to a sustainable future. The role of business cannot be underestimated, and it is already remarkable that firms like BlackRock, Shell, and Goldman Sachs, as well as prominent business leaders, such as Elon Musk, have raised their voice in support of the Paris agreement. Business has also been instrumental in the energy sector by accelerating the transition towards clean energy through an incredible rate of innovation that resulted in significant reductions in the cost of wind and solar energy. These trends and developments cannot and will not be reversed by a single man alone.

Moreover, countries and transnational institutions should seriously consider and carefully evaluate potential sanctions or economic countermeasures (e.g. a tax or an import tariff on U.S.-made products and services, that would account for carbon emissions used in the manufacturing process or, more ambitiously, to urge leading companies to move their HQs out of the U.S.) against an administration that not only fails to grasp the existential threat that climate change poses for the entire planet but also, an administration that shamelessly and disgracefully tries to turn the clock back to the heyday of the fossil fuel industry so as to serve narrow economic or political (or even personal) interests.

President Trump’s recent trip to the Middle East and Europe transformed a national into an international embarrassment and revealed a growing rift between the U.S. and the rest of the world on a multiplicity of important and long-standing issues. Yet a withdrawal from the Paris agreement is not only embarrassing, but it is also a dangerous, irresponsible and immoral next step for an incapable administration, and a President, that are increasingly divorced from reality. As such, resistance to such policies through civil society, local grassroots and state action by concerned and engaged citizens in the U.S. and around the globe, visionary stewardship by the corporate world, and leadership by countries such as China, India, Germany as well as the EU, are imperative, and will undoubtedly prevent any derailment of the course towards a sustainable future. The time to act is now. The stakes are high. Facts do matter. We all owe it to the future generations that will inhabit this planet. Let’s start building the post post-truth world today.

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My Research

I am a strategy scholar whose research focuses on Sustainability and Corporate Social Responsibility (CSR). More specifically, I seek to understand whether, how, and the extent to which the modern business organization contributes towards building a sustainable future. My academic work evolves around two main themes: a) understanding how investment analysts, and the public equity markets, perceive, evaluate and react to corporate engagement with, and integration of, environmental and social issues into strategy and b) understanding the multiple factors (e.g. institutional, regulatory, behavioural) that may affect, drive or hinder, the corporate decision to adopt environmentally and socially responsible strategies.

Upcoming Events

February 27, 2018

Prof. Ioannou will be speaking at LBS HR Strategy Forum

April 27, 2018

Prof. Ioannou will be speaking at ESMT's Sustainable Business RoundTable

May 24, 2018

Prof. Ioannou will be speaking at LBS's Private Equity Symposium