The effectiveness of climate clubs under Donald Trump

Abstract

On 1 June 2017, President Trump announced that the US intends to leave the Paris Agreement if no alternative terms acceptable to his administration can be agreed upon. In this article, an agent-based model of bottom-up climate mitigation clubs is used to derive the impact that lack of US participation may have on the membership of such clubs and their emissions coverage. We systematically analyse the prospects for climate mitigation clubs, depending on which of three conceivable roles the US takes on: as a leader (for benchmarking), as a follower (i.e. willing to join climate mitigation clubs initiated by others if this is in its best interest) or as an outsider (i.e. staying outside of any climate mitigation club no matter what). We investigate these prospects for three types of incentives for becoming a member: club goods, conditional commitments and side-payments. Our results show that lack of US leadership significantly constrains climate clubs’ potential. Lack of US willingness to follow others’ lead is an additional, but smaller constraint. Only in a few cases will US withdrawal entail widespread departures by other countries. We conclude that climate mitigation clubs can function without the participation of an important GHG emitter, given that other major emitters show leadership, although these clubs will rarely cover more than 50% of global emissions. Key policy insights The US switching from being a leader to being a follower substantially reduces the emissions coverage of climate mitigation clubs. The US switching from being a follower to being an outsider sometimes reduces coverage further, but has a smaller impact than the switch from leader to follower. The switch from follower to outsider only occasionally results in widespread departures by other countries; in a few instances it even entices others to join. Climate mitigation clubs can function even without the participation of the US, provided that other major emitters show leadership; however, such clubs will typically be unable to cover more than 50% of global emissions. Climate mitigation clubs may complement the Paris Agreement and can also serve as an alternative in case Paris fails.