U.S. President Donald Trump’s intention to pull out of the multilateral Paris climate agreement won’t impact renewable growth. The Paris accord was adopted on 12 December 2015 and to-date has 195signatories and 170 parties, excluding only Syria and the U.S. Nevertheless, Trump began casting doubts about the reasons for climate change during his campaign trail last year. Trump would rather affiliate his energy policies closer to oil and coal and his administration is revising its role in the accord.
The non-partisan Government Accountability Office says U.S. costs associated with damage attributed to climate change could run up to $35 billion annually by 2050. Their calculation followed a report by the UN that stated it may be cheaper to invest in keeping climate change at bay rather than spending on disaster recovery.
However according to a recent report by U.S.-based Fitch Ratings, one of the “Big Three credit rating agencies,” Trump’s Paris decision won’t affect the global pace of growth for renewables. The report states that the generation of power from renewable resources has almost increase fourfold over the past decade and has expanded to more than 6X to 770 gigawatts by year-end 2016.
An agenda through 2020 aims for about 20% of the European Union budget to be directed towards climate-related issues. Eurostat’s (the EU’s record-keeping arm) initial EU bloc-wide estimate shows a 0.4% drop in CO2 emissions from fossil fuels compared to last year. Germany has one of the world’s greenest economies and the entire members’ bloc could spend as much as $225 billion on climate actions over a six-year period, which kicked-off in 2014. European officials have noted that their efforts to progress a low-carbon economy also had substantial economic backing.
Fitch Ratings said that financial profits in renewable energy had been buoyed by government grants and additional incentives, whereas renewables are gaining equality in terms of price when assessed against traditional power sources. The report states that this proposes that the growth of renewables is turning out to be self-sustaining. Also, sector growth will not be impacted by America’s plans to extract itself from the Paris climate agreement.
Fitch added that some renewable energy gains may be disproportionate, but cost progress and efficacy should continue: “The most disruptive changes are likely to come through advances in technology, and the speed at which changes occur may be much faster than anticipated. Game-changing events such as those caused by geopolitical factors or significant climate change events could also affect the industry.”