Trade Policy Clouds Obama’s Climate Legacy

“Climate change is no longer some far-off problem; it is happening here, it is happening now,” said President Obama during his memorable trip to the Arctic in August 2015, just months after approving Shell’s drilling off the coast of Alaska.

That contradiction captures the mixed record of our president on what has been described as the only issue that will matter 100and 10,000 – years out. Renewables have become the largest new source of electricity after federal tax credits were passed, state targets adopted, and costs decreased. The president had embraced an all-of-the-above climate-change strategy that included so-called “clean coal.” Nevertheless coal has experienced major setbacks. The president’s Clean Power Plan (recently stayed by the Supreme Court) and the moratorium on coal leases on federal lands, pending a comprehensive environmental review, may further weaken that polluting sector.

Nationally, a divided Congress has blocked cap-and-trade legislation and the phasing out of fossil fuel subsidies. Internationally, the president rejected the controversial Keystone XL pipeline ahead of the Paris Climate Talks, then advanced a global accord of voluntary, nonbinding commitments. If met, those commitments should limit warming to 2.7- to 3.5-degree Celsius versus longstanding, reaffirmed targets of 1.5 or 2 degrees. “By comparison to what it could have been, it’s a miracle. By comparison to what it should have been, it’s a disaster,” wrote the The Guardian’s George Monbiot. He, like others, highlighted the need to slow fossil fuel extraction (80 percent must stay in the ground to limit warming to two degrees.)

The president understands climate action will be a crucial part of his legacy. Climate change will devastate humanity by transforming agriculture, hunger, war zones, and clean water supplies. Cross-cutting policies must be marshalled to limit it.

Yet climate protections are being undermined in trade agreements. Strong efforts to include enforceable carbon targets in global climate talks have borne no fruit, even as trade agreements support unlimited monetary compensation for corporations affected by governmental climate action.

President Obama’s Trans-Pacific Partnership (TPP), which fails to mention climate change, provides an example of such an agreement. Under the TPP, Investor-State Dispute Settlements would be used to address multinational corporations’ claims that government regulations to prevent climate change (or other concerns) will reduce their profits. Banks and corporations would be able to use arbitration panels, whose members may harbor bias resulting from their corporate careers, to sue governments for billions when they act to protect their citizens.

The TPP also promotes the extraction of dirty fossil fuels. It requires the U.S. Department of Energy to approve heavily polluting liquefied natural gas exports to signatory nations. All for what, exactly? Several studies have found the agreement will produce minimal or negative growth, job losses, and greater inequality. Both Democratic candidates for president oppose the TPP, and Congress should not ratify it.

Other trade deals with provisions similar to the TPP’s are already being used to undermine climate action. TransCanada is suing the US for $15 billion under NAFTA investment provisions like those in the TPP, after the president rejected the Keystone XL Pipeline. This followed the largest environmental protests in decades aimed at stopping the transport of dirty energy. Earlier this week, the World Trade Organization ruled that “buy local” provisions of Indian law that have helped develop India’s fast-growing solar sector are illegal. Such provisions are being used in almost one-half of American states to grow renewable energy and create jobs but will face obstacles in the TPP. Trade deals, ironically, may seal the fate of the planet.

President Obama also plans to sign the Customs Bill, which contains a negotiating objective to keep the United States Trade Representative from addressing climate change in trade agreements that use the fast track process. Future trade agreements will likely contain enforceable sanctions, like increased tariffs or monetary damages. Why discourage their use in addressing this top priority?

Despite President Obama’s urgent warnings in Alaska that climate change could “condemn our children to a planet beyond their capacity to repair,” he seems to have curbed his climate ambition. The president should call for creating the renewable energy future that is possible, in parallel with keeping fossil fuels buried. He must call out the corporations that have undermined his climate goals through trade or politics. Such actions will strengthen his presidential legacy.

Veena Trehan
Social and Economic Justice Task Force

Leave a Reply