Climate Change, Energy and Environment
Nicholas Cain | Jun 2017

Exiting the Paris Accord

Applying giCompute Advanced Analytics Platform to Understand Trump's Decision

Overview

In March of 2017 Global Impact Strategies (giStrat.com) applied giCompute advanced decision analytics platform to anticipate the future of American commitment to the Paris Agreement. Our results revealed a 72% chance of the Trump administration withdrawing from the accord. The Paris Agreement is a multilateral treaty dedicated to reducing emissions of the pollutants that cause global climate change. It is the first multilateral agreement that requires all signatories to create national plans to reduce emissions of greenhouse gases (GHGs). The Paris Agreement is unique in that binds both advanced-industrial nations, such as those in the US and the European Union, and large developing countries, such as India and China, together in a single agreement. The treaty has also been widely and rapidly embraced: 147 of the 197 nations who are party to the underlying UN Framework on Climate Change have already signed the agreement. This list includes all the top-10 emitters of GHGs (except for the Russian Federation).

Statements made by President Trump calling climate change a “hoax” and threatening to “cancel” the Agreement, were precursors to the United States withdraw from the Paris Agreement. Given that the US is currently the second-largest emitter of Green House Gases (and the largest overall emitter over time), the decision to withdraw from the treaty could provide justification for other major polluters to delay domestic moves to reduce emissions.

Findings

·       In March of 2017, we estimated that the Trump administration was likely to withdraw from the Paris Agreement. Subsequent modeling runs found that there was a 72% chance Mr. Trump would withdraw from the Paris Agreement and a 28% chance of remaining committed. For Trump to have remained committed to the Paris Agreement, he would have had to go against his base of supporters, the high carbon emitting industries that have supported his Presidency, and the stated Republican Party position. For these reasons, we concluded the likelihood of Trump remaining committed to the Paris Accords would be low.

·       Based on a review of the literature and background research on the statements made by key Trump administration officials, we identified three key factors influencing the decision to pull out of the Paris Agreement: 1) Indifference toward alliances and diplomatic norms, 2) Skepticism about the causes of climate change and 3) Concerns of harm to certain sectors of the economy.

·       Our research shows certain businesses who support the Trump administration perceive the Paris Agreement as a threat to their ability to remain competitive. These businesses are primarily high carbon emitters and include most of the US coal industry, petrochemical producers, and some manufacturers. Stricter regulations of carbon pollution may increase costs or reduce profits, requiring these businesses to make significant changes to their business models.

·       Second, President Trump and many of his supporters, do not believe climate change is caused by human activity—or doubt the severity of the effects. According to public statements, the Bannon wing of the White House believes that climate change is not a serious threat to the US.

·       In addition, given the growing threat posed by investigations of Russian interference in the presidential election, Mr. Trump needs the continued support of his most ardent partisans. Pulling out of the Paris Accord creates a symbolic victory, demonstrating Mr. Trump’s commitment to an “America first” foreign policy. This has a high signal value to his most passionate domestic supporters.

·       Lastly, the Trump Administration has shown less interest in adhering to diplomatic norms or international agreements. According to public statements, Trump supporters such as Steven Bannon believe multilateral agreements impinge on national sovereignty. As such the Trump administration seeks to repeal and renegotiate the agreements made by previous administrations. Even if the changes are minor, the act of rejecting the agreement and renegotiating demonstrates President Trump’s commitment to his stated campaign goals.

·       Approximately one week after we ran the initial simulations, the administration signed an executive agreement asking the US Environmental Protection Agency (EPA) to withdraw the Clean Power Plan and “unwind” other key initiatives put into place by President Obama to meet US obligations under the Paris Agreement.

Key Result

Description: The graphs below depict results from the Monte Carlo simulations. The Monte Carlo method uses repeat random sampling to solve problems or obtain numerical results. giCompute uses Monte Carlo simulations to allow users to test how the outputs react to randomly generated inputs over many trials. Users can direct the platform to run between one and forty randomized alternative futures. Users can also determine how many factors and factor options to randomize. The chart shows the percentage the model results in each outcome over the specified number of simulations. An outcome is more likely when it has a higher win percentage.

Results: giStrat conducted Monte Carlo simulations across 40 alternative futures with a 90% variance probability and a change of ±15% in stakeholder influence. In each simulated alternative future, we randomized one factor and one factor option while keeping the remaining factors constant. The results indicated Trump would pull out of the Paris Agreement.

 

 

About giCompute

giCompute is an advanced decision analytics platform that aggregate preference data of stakeholders and groups involved in any particular issue of concern. We used giCompute to aggregate key stakeholder dispositions  integrated into game theory based simulations and statistical tests to determine whether the Trump administration would remain committed to the Paris Agreement. giCompute incorporates the principles of game theory and decision science to calculate the positions leaders adopt and, more importantly, the impact of their actions on the outcome.

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