US Rejoins the Paris Climate Agreement, What does this mean?

Joe Biden took office as the 46th president of the United States on January 20, 2021. As part of his campaign, Biden signed an executive order that the United States will rejoin the Paris Climate Agreement and lead aggressive action. on climate change mitigation. But what does America’s re-entry into the Paris Agreement really mean for global organizations in 2021 and beyond?


The Paris Agreement was devised in 2014 and agreed to by nearly 200 countries in 2015 as a result of COP21, the largest and most comprehensive agreement of its kind ever negotiated. Under the agreement, each participating nation must establish emission reduction plans every five years with the goal of limiting the global temperature rise to below 2 degrees C. Additionally, the agreement requires developed nations (including the United States), major broadcasters, to financially help developing nations achieve their goals.

The non-binding agreement did not create specific mandates for countries to achieve this goal, nor did it include formal sanctions for non-participation / non-achievement, leading some parties to criticize the effectiveness of the agreement. As such, the agreement itself was largely iconic, leaving it up to individual nations to determine how to reduce their carbon emissions and what policies to implement in support of these efforts.

While the deal was a landmark achievement, albeit mostly symbolic, symbols can be incredibly powerful. In 2020 and 2021, we have seen the impact symbols can have, fueled by cries for social justice and the Black Lives Matter movement, as well as the results of the 2020 US elections and other global civil unrest.

The United States officially exited the Paris agreement in 2020, but there are still 188 participating countries that account for 79% of global emissions; The United States has been the only country to withdraw to date.

Many of these nations are working collaboratively to address climate change and reduce greenhouse gas emissions, with the European Union’s Green Deal as a prime example. While the United States continued to make progress toward fighting climate change through state and local initiatives, public-private partnerships, and corporate commitments, the departure of the US agreement sent a clear message to the rest of the world: that it would no longer lead efforts. international organizations or work in collaboration with other nations to this end.

Biden has pledged to rejoin the Paris Agreement the day he takes office, sending a clear message that his administration will aggressively address carbon emissions and support a national transition to a clean energy economy.

Rejoining the Paris Agreement

Although rejoining the Paris Agreement is mostly a gesture of goodwill, Biden has committed that “by 2050, the United States will be a 100 percent clean-energy economy with net-zero emissions,” with enforcement mechanisms in place by the end of his first term to make sure the U.S. stays on track to reach this goal. Biden is free to rejoin the agreement without Senate support; however, there is broad-based, bipartisan momentum for action, driven by the voluntary We Are Still In movement that began in 2017 as a result of Trump’s decision to leave the agreement.

Biden’s administration has also committed to decarbonizing the power sector by 2035, and aims to invest $1.7 trillion in clean energy initiatives. The administration may also implement more stringent standards for energy procurement to stimulate the economy, and local and federal governments are likely to see mandates for the increased adoption of performance contracting to increase resource efficiency. Biden has also promised to encourage electric vehicle (EV) adoption by installing 500,000 new public charging stations by the end of 2030, and will also likely support EV infrastructure expansion via legislative and regulatory measures.

Biden has also indicated that he will look at new standards in fuel economy to drive EV adoption, ensure that U.S. government buildings and facilities are more efficient and climate-ready, and require new green standards for appliances and building efficiency. Legislation requiring public companies to disclose climate risks and greenhouse gas emissions in their operations and supply chain is also on the horizon.

Globally, the United States’ re-entry into the Paris Agreement will “up” the expectations on climate action, spurring global competition, both in emission reductions and innovation/economic development. At COP26 in Glasgow in 2021, it is expected that countries—including the U.S. —will submit more ambitious targets, which will become binding under a new accord requirement on reporting and progress disclosure.

In anticipation of these increasing goals, and to remain competitive, global organizations and corporations or private businesses can plan for increased pressure to act on decarbonization and will likely need to look at Scope 3 emissions and disclosure, seeking to improve sustainability practices across their entire value chain. Socially and environmentally responsible business operations will become “table stakes” for all organizations seeking to be in compliance or to compete.

What to Expect?

America’s Clean Energy and Electrification Transition Will Create New Jobs

The transition to clean energy is already underway, but there are economic concerns for those whose jobs may be displaced as a result of lower demand and consumption of fossil fuels. Huge fluctuations in the oil market in 2020 have already caused the loss of more than 100,000 jobs, while coal jobs in the US have declined by 24% since 2016. Biden has stated that he will not ban the nationwide hydraulic fracturing of natural gas (“fracking”) without a transition plan, and he estimates that his clean energy plan will create more than 10 million jobs, placing the US at the center of the US economy. clean energy as part of post-pandemic recovery and growth. Globally, it is estimated that renewable energy could employ more than 40 million people by 2050.

To support these efforts, Biden has already begun filling his climate cabinet and his task force. The cabinet will focus on green energy and electrification as a means to facilitate economic recovery, employment, and aid to communities affected by the loss of fossil fuel generation in the United States, as well as to hold polluters accountable for damage to low-income communities and communities of color and to black lung disease contracted by coal company workers. Biden and his climate cabinet will also allocate R&D investments in clean energy technology to enable the United States to compete effectively as a leading exporter.

Global climate advancements will continue

The planned reentry to the Paris Agreement demonstrates that the world’s largest economy is redoubling investment in the clean energy transition as a means to “better rebuild” from the COVID-19 pandemic. This will not only bring the US in line with other world leaders in terms of its carbon neutral commitments (including the European Union, UK, Canada, Japan and China), but the resurgence of US leadership The US will also pressure other nations to take their commitments more seriously and act more aggressively on decarbonization and electrification.

Given the likely greater push from governments, corporations have an even bigger role to play in the global climate action effort. Meeting the goals of the Paris Agreement will require a “solution of all the above”, and corporations are often more agile than governments, able to transition to efficiency, clean energy, electrification and circularity more quickly without regulation . Additionally, corporations are historically more innovative and rich in subject matter expertise that will help advise and inform public policy, legislative and regulatory solutions that will surely expand and become law in even more countries in the coming years.

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