By William D. Balgord
President Trump recently met with workers and management at the Snap-On Tool plant in Kenosha, Wis., where he signed an executive order directing federal agencies to purchase goods manufactured in the United States.
Along with some proposed tax changes, this initiative would help spur economic growth toward levels above the 2 percent average GDP increase during the previous eight years.
Plant construction and expansions – with abundant hiring – would particularly benefit the workforce of Western New York.
Sustaining the growth will require abundant low-cost energy and electricity, in turn dependent on available supplies of domestic petroleum, natural gas and coal, and alternative energy to a lesser extent.
Standing squarely in the way of increased usage of fossil fuels is the Paris climate change agreement. Compliance with the de facto treaty would sorely restrict energy choices by demanding a nearly 30 percent reduction in U.S. carbon dioxide emissions by 2025. Former President Barack Obama labeled it “an executive agreement” to avoid submitting it to the Senate for ratification. As a proposed treaty it would have been overwhelmingly rejected.
Trump met recently with Environmental Protection Agency Administrator Scott Pruitt and several advisers supportive of his promises to distance the United States from the Paris agreement. Participating also were Trump’s daughter Ivanka and Secretary of State Rex Tillerson, who reportedly favor remaining within the treaty structure.
The White House is expected to announce that the United States is pulling out of the agreement. That decision will help the U.S. economy exit its postrecession doldrums.
Economists further assert industrial output and jobs growth cannot advance the GDP above 3 percent without first changing the tax structure, reducing the corporate rate from its current 35 percent to 20 percent or less.
Independent studies using the EPA’s climate models and econometric models warn that advancing the Paris limitations at best yields de minimis reductions in global surface temperatures compared with outcomes exclusive of the CO2 restrictions.
But the real costs arising from direct compliance and from lost opportunity (redirecting resources away from productive investment), are staggering. No less than a trillion dollars per decade would be transferred from the private sector. That’s for the U.S. economy alone!
Even more harm will befall developing countries, where rural populations lack clean water and electricity. Without electricity becoming broadly available, prospects for making a dent in the massive poverty in those countries are dim.
The typical American worker, denied gains enjoyed by economic elites, also shares a dimmed prospect under the shadow of the Paris accord.
Keeping us involved in the climate agreement would turn out to be a very bad bargain for all.
William D. Balgord, Ph.D., heads Environmental & Resources Technology in Middleton, Wis.