President Trump has long talked about how he wants to run the federal government like a business. Many of his Cabinet members came from the corporate world. On matters ranging from health care to taxes, he routinely solicits the advice of his business associates.
But when it comes to climate change, Trump has actively ignored corporate leaders’ calls to reduce greenhouse gas emissions. On Thursday afternoon, he announced his decision to pull out of the Paris climate deal — fulfilling a promise he made on the campaign trail, but breaking with some of the CEOs who have advised him. At least one of those CEOs, Elon Musk, said he would quit Trump’s advisory council as a result.
Many of America’s largest businesses and corporations have been vocal in their support for government policies meant to curb carbon emissions. More than 60 Fortune 500 companies signed a letter to the administration urging Trump to “re-affirm our deep commitment to addressing climate change” by staying in the Paris agreement. Industries that were once resistant to carbon emissions rules — such as the energy sector — have been investing more in renewable energy and natural gas production in recent years. And big corporations that consume tons of electricity say renewable energy sources are more affordable than ever.
But a smaller number of businesses — mostly US manufacturers and coal companies — have fiercely resisted the Paris deal, and their message apparently resonated more with Trump. They said that forcing businesses to curb their use of fossil fuels will cost too much money and lead to layoffs.
In the White House Rose Garden on Thursday, Trump echoed their language to describe the climate deal, saying it would lead to “lost jobs, lower wages, shuttered factories, and vastly diminished economic production.”
Corporate America increasingly sees climate change as a threat
Twenty years ago, US corporations were resistant to any suggestions to cut back on their consumption of fossil fuels. Renewable energy sources were expensive and harder to find. And scientific evidence that humans were making the planet warmer wasn’t as strong.
That started to change in 2007, when the United Nations Intergovernmental Panel on Climate Change published a groundbreaking report, authored by thousands of international scientists, showing overwhelming evidence that carbon emissions from human activity were increasing global temperatures.
“It ratcheted up the certainty of this being the issue, and we saw it as a real risk for our business,” said Kevin Rabinovitch, global sustainability director for Mars Inc., which owns brands like M&Ms, Skittles, and Pedigree pet food.
Corporations that rely heavily on agriculture — including Mars — also started to see the direct effects of increasing droughts and unpredictable weather patterns. Ruined cocoa and wheat crops caused prices to spike, and that affected the bottom line, says Rabinovitch. Corporations began creating sustainability offices, like the one he runs, to find ways to reduce their carbon footprint. They began investing more in wind power and other renewable energy sources. Now it’s rare to find a Fortune 500 company that doesn’t have staff dedicated to sustainability issues.
That change also reflects consumer preferences. A majority of Americans now believe humans are responsible for global warming, and think the federal government should regulate greenhouse gas emissions. Sustainability suddenly mattered to a lot more to people, so corporations had to address that as a way to attract the most talented workers.
Tech companies such as Apple and Google have pledged to reduce their carbon footprint in recent years, and retailers like Walmart and Staples joined them in signing the letter urging Trump not to back out of the deal.
In the end, they lost out to coal.
Manufacturers urged Trump to leave Paris deal
Economists say pulling out of the Paris accord will do nothing to bring back manufacturing and coal jobs, but Trump couched his decision in the language of job creation. He followed the lead of two of the largest manufacturing trade groups, the National Association of Manufacturers and the Industrial Energy Consumers of America, which said the goals of the Paris deal were too harsh and would cost too much for manufacturers.
The IECA sent its own strongly worded letter to the administration in recent weeks. The group warned that if energy costs rise — whether because of global markets or emissions regulations — manufacturers would move more jobs overseas.
“To avoid the perverse and economically damaging consequences … we must ensure that any climate policy does not tilt the playing field toward our global competitors and place the US at a competitive disadvantage,” Paul Cicio, the IECA president, wrote Trump last month.
Both groups declined to talk to Vox, and instead released statements praising Trump’s decision.
“As the President has acknowledged, certain elements of this deal were not equitable for U.S. manufacturers,” wrote Ross Eisenberg, vice president of energy and resources policy for NAM. “We look forward to working with the President as he negotiates a better deal to address this international policy challenge.”
Then he promised that manufacturers would reduce greenhouse gas emissions on their own.