U.S. Withdrawal from the Paris Accord: Implications for the Clean Energy Sector

In light of President Trump’s decision to withdraw the U.S. from the Paris climate accord (for more information, see Trump pulls US out of Paris climate accord and Trump Will Withdraw U.S. From Paris Climate Agreement), Stoel Rives attorneys Tim McMahan and Drew Moratzka provide their insights into what the decision may mean for states, local governments, energy and renewables industries, and others.

It is unclear at this time precisely how the United States’ withdrawal from the Paris Accord will impact emissions from the electric generation sector. The federal government’s decision may embolden states as well as local governments to continue enacting clean energy policies and incentivizing clean energy technology investments. For example, California Governor Brown has pledged that his state (standing alone, one of the world’s largest economies) will cooperate with other nations, including China, in the development and implementation of clean energy technologies and carbon controls to combat climate change. Stateside developments, as well as actions by international investment funds and other corporate entities will proceed notwithstanding either a withdrawal from the Paris Agreement or a potential end to the Clean Power Plan. Indeed, a withdrawal from the Paris Accord may well incentivize investments in clean technologies and stimulate significant new economic ties between the states and other nations. Finally, under Article 28 of the Paris Accord, it appears the earliest effective date of a withdrawal would be November 2020. There may be alternative, and potentially more drastic, options at the current administration’s disposal to remove the United States from the Accord. Stoel Rives will continue monitoring and covering developments on these important issues.

Stoel Rives LLP’s Climate Change Initiative. We understand the complexity facing businesses developing climate change strategies, and we have the knowledge and experience to reconcile the competing regulatory and market-driven forces. Our multi-disciplinary industry teams connect clients with lawyers who know their industry – including the energy, manufacturing, agribusiness, construction, financial, insurance, and retail sectors.