Pitting the U.S. Economy Against Climate Change Is Not a New Tactic

Article ID: 676010

Released: 6-Jun-2017 6:05 PM EDT

Source Newsroom: Arizona State University (ASU)

Expert Pitch

Lily Hsueh is an assistant professor of public policy and economics in the College of Public Service and Community Solutions at Arizona State University. She can be reached at Lily.Hsueh@asu.edu.

To schedule a television or radio interview with Hsueh from ASU's professional recording studio, contact Leslie Minton at Leslie.Minton@asu.edu or 480-727-4294. 

On the civic and economic impacts of the U.S. leaving the Paris agreement, Hsueh says:

On June 1, 2017, President Trump pulled the U.S. out of the Paris Climate Agreement. There have been news commentaries, notably a recent Wall Street Journal editorial, which contends that the best climate change insurance is 'a large and a growing economy so that the future generations can afford to adapt to whatever they may confront.'

Pitting the economy against climate change is not new: It is an extension of the perennial debate about economic growth versus the environment. New research shows that these realities can co-exist when the political and economic will of multiple stakeholders intersect.

States and cities are eager and ready to fill the leadership void on climate change governance and solutions. My colleagues and I recently conducted a national survey of finance, public works and environmental directors across U.S. cities. In a preliminary analysis of the data, we learned that cities most vulnerable to climate change, such as the City of Phoenix, have proactively implemented citywide policies and practices—namely, policies on water and energy conservation, green purchasing and goals and targets for environmental performance—which can cut cost and save money on energy, water and fuel for local governments, and stimulate an increase in the production of green products and services, spurring economic growth and reducing environmental impacts and carbon footprints.

Firms have also invested in climate friendly solutions and built internal capacity. My research shows that businesses are more likely to be proactive in climate change if they manage climate risks, set carbon emission targets, and manufacture or sell products geared toward consumers, including technology companies (L. Hsueh 2017a).

The impending threat of Obama’s Clean Power Plan becoming compulsory back in 2013-15 motivated U.S. firms to engage more intensively in climate action (L. Hsueh 2017b). This suggests that national resolve and commitments to combating climate change spur technological innovation that are positive for the economy.

Finally, by pulling out of the Paris Agreement, Trump has ceded our economic and political leadership on technological innovation, economic growth and environmental leadership to other advanced economies and China. Denmark and Germany have integrated pro-growth and pro-earth national policies: There is a dynamic mix of economic incentives and direct government investments in renewable energy sources and low carbon technologies.

The question is out whether China will exert leadership; that said, China began to develop technological capacity in renewables and other strategic sectors through state and market-building efforts beginning twenty years ago (R. Hsueh 2011, 2015).

The one silver lining is that by Paris Climate Agreement rules the U.S. cannot actually leave the Agreement until November 2020, the day after the next presidential election. There is a chance—the American electorate must decide—the U.S. may never leave the Paris Climate Agreement after all, which would be a win for the economy and the environment.


Hsueh, Lily. 2017a. “Transnational Climate Governance and the Global 500: Examining Private Actor Participation by Firm-Level Factors and Dynamics.” International Interactions 43 (1): 48–75. doi:10.1080/03050629.2016.1223929.

———. 2017b. “What Explains Participation and Effort in Voluntary Climate Action by Businesses?: Evidence from the Carbon Disclosure Project.” https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2980329.

Hsueh, Roselyn. 2011. China’s Regulatory State: A New Strategy for Globalization. Cornell University Press.

———. 2015. “Nations or Sectors in the Age of Globalization: China’s Policy Toward Foreign Direct Investment in Telecommunications.” Review of Policy Research 32 (6): 627–48. doi:10.1111/ropr.12149.


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