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Jackson, Ryan[jackson.ryan@epa.gov] Bloomberg BNA Fri 6/2/2017 8:19:40 PM June 2 - Daily Environment Report - Afternoon Briefing
Daily Environment Report
Afternoon Briefing - Your Preview of Today's News
The following news provides a snapshot of what Bloomberg BNA is working on today. Read the full version of all the stories in the final issue, published each night. The Bloomberg BNA Daily Environment Report is brought to you by EPA Libraries. Please note, these materials may be copyrighted and should not be forwarded outside of the U.S. EPA. If you have any questions or no longer wish to receive these messages, please contact Josue Rivera-Olds at riveraolds.iosue@epa.gov, 202-566-1558.
EPA Stuck in Neutral on Car Emissions, Official Says
Posted June 02, 2017, 11:31 A.M. ET By David Schultz
The EPA has made little to no progress on determining whether to relax greenhouse gas standards for cars, according to one of its senior career staffers, raising doubts that it will be able to act before a deadline next year locks in the current standards through 2025.
Additionally, the agency has made little effort to reach out to environmental regulators in California, which has the authority to set its own state vehicle standards. A California air regulator told Bloomberg BNA that the state has little desire to roll back its standards, potentially setting up a scenario in which car makers will need to manufacture different models for different states.
President Donald Trump announced at a March 15 rally in Detroit that his administration would reopen an Obama administration decision that maintained current automobile standards at a companywide average of 54.5 miles per gallon, or its equivalent, through 2025. The auto industry is seeking relaxed standards, arguing that the miles per gallon target is too difficult to achieve and would ultimately inflate the prices of their vehicles.
But in the nearly three months since then, the Environmental Protection Agency has taken few if any actions to begin formally reconsidering the decision, according to Chris Grundler, director of the EPA's Office of Transportation and Air Quality. Grundler told reporters at a May 31 EPA advisory council meeting that he hasn't briefed his agency's administrator, Scott Pruitt, on the issue and that his office has had no interaction with California officials or with the Department of Transportation, which has authority to regulate fuel efficiency.
April Deadline
The Obama administration surprised many when it announced in January, weeks before Trump's inauguration, that the EPA would not alter its current greenhouse gas standards. The regulations on vehicle emissions only required a decision on that by April 2018.
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After the Trump administration took office, the auto industry began lobbying the EPA to revisit its decision before the April 2018 deadline, which would lock the standards in place. The Alliance of Automobile Manufacturers, which counts Ford Motor Corp., General Motors Corp, and Volkswagen of America among its members, in February formally asked Pruitt to rescind the Obama-era determination to leave the standards in place.
With Trump's announcement in Detroit, the industry got its wish. And Gloria Bergquist, head of public affairs with the Alliance of Automobile Manufacturers, said she's still optimistic the EPA can meet its deadline.
"There is surely time to complete a robust evaluation by April 2018, which is important to automakers because of their long lead time in developing products," she told Bloomberg BNA.
The EPA's press office did not respond to a request for comment on how its effort to reconsider the standards is progressing.
Complex Process
But there is much to be done before then if the agency does plan on relaxing the automobile standards.
Janet McCabe, head of the EPA's air office during the Obama administration, said that when her team was making its decision to maintain the current standards it compiled voluminous data showing that car makers could achieve the target. If the current EPA wants to change the standards, it will need to compile equally compelling data that contradicts that determination, she told Bloomberg BNA.
"These are very detailed documents and reports and studies," McCabe said. "Technical staff at EPA would need to look at them.... It's not a quick matter."
Additionally, the agency will need to budget time to allow the public to comment on its decision and then process and respond to those comments, all before the April 2018 deadline.
California
Then there's the matter of California.
Because the state began regulating air pollution before the EPA was even created, its authority to set fuel efficiency standards for cars was grandfathered in to the Clean Air Act. The auto industry had asked federal authorities to work with the state to set a single, harmonized standard--something they accomplished back in 2012 when the current standards were first agreed to.
However, with the Trump administration now indicating it may want to diverge from that 2012 agreement, California has drawn a line in the sand. Alberto Ayala, deputy executive officer of the California Air Resources Board, said California would be happy to sit down with the EPA and DOT to discuss setting standards for 2026 and beyond.
"We're more than interested in that," he told Bloomberg BNA. "[But] if it's all about rolling back the current standards, we're not interested in that."
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Ayala said, aside from a letter Pruitt sent responding to the concerns of Gov. Jerry Brown (D), the EPA's political leadership has not reached out to his state on this issue in any way.
Grundler said that it wouldn't be in anyone's interest for the EPA, DOT and California to each go their own way on the vehicle standards.
"Chaos is not an option," Grundler said. "It's not good for business, not good for breathers."
CEOs, Politicians Unite on Paris Accord, Climate Change
Posted June 02, 2017, 10:36 A.M. ET By Jessica Shankleman and Joe Ryan
Donald Trump's plan to scrap U.S. involvement in the world's broadest deal on global warming may actually have the opposite effect, galvanizing countries, businesses and even U.S. states, to double down on stopping pollution.
The U.S. president June 1 sided with the interests of coal miners, who dig up the dirtiest fossil fuel, as he sought to make good on his election campaign promise to quit the landmark Paris Agreement on climate change.
That put him at odds both with world leaders and chief executive officers of almost every industry on the planet, including oil majors Exxon Mobil Corp, and Total SA; airline owner Sir Richard Branson; and financiers led by BlackRock Inc.'s Laurence D. Fink and Goldman Sachs Group Inc.'s Lloyd Blankfein. With Trump working to boost fossil fuels, the rest said they're determined to keep investing in clean energy regardless of U.S. policies.
"The anger and concern over Trump's withdrawal could soon give way to global resolve," said Jonathan Pershing, a veteran climate negotiator who served as special envoy for climate change at the U.S. Department of State until Trump's election last November. "The goad of disagreement sometimes can drive coalitions more strongly."
Even as Trump branded the Paris deal "unfair," state governors took to social media to confirm their support for the accord. The mayor of Pittsburgh--a Pennsylvania city Trump highlighted as a beneficiary of his decision to turn his back on the global pact--vowed to abide by the Paris Agreement.
California Opposition
California Gov. Jerry Brown departs June 2 for China, where he will urge the world's most populous country and largest car market to take environmental cues from Sacramento instead of Washington. While the Trump administration is seeking to relax fuel-mileage standards for 2022-2025, California is maintaining stricter rules.
"California will resist," Brown said on a call with reporters. "This is an insane move by this president."
Even Russia's Energy Minister said he was confident Trump couldn't topple the Paris deal, which seeks to limit global warming well below 2 degrees Celsius (3.6 degrees Fahrenheit). Russia hasn't
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yet ratified the Paris Agreement, and many in the government in Moscow view the deal as a threat to their oil and natural gas exports.
"Many countries have confirmed their commitment to the accord," Alexander Novak, Russia's energy minister, said June 2 at the St. Petersburg International Economic Forum. "Six G-7 countries maintain the commitment, and so does China. So I think in this case we don't see significant risks of other countries dropping their commitment in a domino effect."
Solar vs. Coal
While the Paris climate deal was seen as crucial to stopping catastrophic climate change, market forces play a key role in what technologies get new investment. Solar power is already cheaper than coal in some parts of the world. In less than a decade, it's likely to be the lowest cost option almost everywhere, according to Bloomberg New Energy Finance.
European oil majors BP and Total said the transition to lower carbon fuel is inevitable regardless of Trump's decision. Both called for a global carbon price to shift the world away from the dirtiest energy sources and are pursuing more investments in natural gas, which has lower carbon emissions than oil or coal.
"In 20 years, we will not be known as oil and gas companies, but as gas and oil companies," Total Chief Executive Officer Patrick Pouyanne said at the St. Petersburg forum June 2. "If we want to have the gas, despite the position of president Trump, we need to go to carbon pricing one way or another."
--With assistance from Jack Farchy, John Lippert, Ryan Beene and Anna Hirtenstein.
2017 Bloomberg L.P. All rights reserved. Used with permission
EU, China Show Common Climate Front After U.S. Shuns Global Pact
Posted June 02, 2017, 11:10 A.M. ET By Jonathan Stearns
The European Union and China displayed a united front over the need to fight climate change while revealing nagging differences over the path to deeper trade and investment ties.
Jean-Claude Juncker, president of the European Commission, the EU's executive arm, said Europe and China must lead the global transition to clean-energy technologies after the U.S. decided to withdraw from the landmark climate-protection accord reached by almost 200 countries in Paris two years ago.
"There is no backsliding on the Paris agreement," Juncker told an EU-China business conference June 2 in Brussels. Chinese Premier Li Keqiang told the same audience that EU-China ties help to counter "the growing uncertainties in the world."
The two leaders spoke less than 24 hours after U.S. President Donald Trump provoked worldwide disappointment and anger by announcing plans to withdraw from the Paris pact, which curbs fossil fuel production. Juncker said fighting climate change is "more important today than yesterday."
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2017 Bloomberg L.P. All rights reserved. Used with permission
Second Chemicals Rule at White House Keeping EPA on Track
Posted June 02, 2017, 03:06 P.M. ET By Pat Rizzuto
A final rule describing how the EPA will evaluate chemical risks is being reviewed by a White House office, positioning the agency to show it has done due diligence in trying to meet its statutory deadline.
The Environmental Protection Agency submitted its final rule to the Office of Management and Budget June 1.
The 2016 Toxic Substances Control Act amendments require the EPA to publish the chemical risk evaluation and two other implementation rules by June 22.
OMB has been reviewing a final rule describing the procedures the agency would use to select which chemicals would be high or low priorities for risk assessment since May 23.
The third rule would establish the process by which the EPA and chemical manufacturers would update the TSCA inventory. The amended law requires the agency to update that inventory so it distinguishes between chemicals that are active in commerce and those that used to be.
Keith Matthews, chairman of the American Bar Association's Pesticides, Chemical Regulation, and Right-to-Know Committee, previously told Bloomberg BNA that the EPA's efforts may enable it to meet the law's June 22 deadline or at least allow it to publish the rules so close to the deadline that it could demonstrate it has made a good-faith effort.
Rules for 37 New Chemicals Aim to Protect Workers, Environment
Posted June 02, 2017, 02:32 PM. ET By Pat Rizzuto
The Environmental Protection Agency will be issuing direct final new use rules for 37 chemicals with workplace controls imposed on at least four, and environmental protection provisions in others.
The agency posted online an advance copy of the 37 significant new use rules, also called SNURs, with a notice saying they will be published in the Federal Register.
This is the third package of new use rules the agency has published since the Toxic Substances Control Act was amended on June 22, 2016. As in the previous two packages, the agency had completed its reviews of all the chemicals prior to the statute's revision.
The agency issues new use rules for new chemicals it already has determined can enter commerce if manufactured or imported under conditions--workers' use of respirators, for example--with which the original manufacture agreed to comply. The original manufacturer or importer agreed to those conditions either through its new chemical notice, called a premanufacture notice (PMN), or through its PMN combined with a consent order it signed.
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The new use rules impose those same conditions on any other company making or processing the same chemical. Any company wanting to make, import or process the new chemical in a different way must ask the agency whether it can do that at least 90 days before it intends to do so.
Exxon Citizen Suit With Record Penalty Difficult to Repeat
Posted June 02, 2017, 7:01 A.M. ET
By Renee Schoof
The $20 million fine recently levied against ExxonMobil Corp, is a record penalty for an air pollution lawsuit brought by a citizens' group, but attorneys say bringing other big cases like it will be difficult.
There are few targets as large as Exxon's Baytown Complex in Texas, one of the largest integrated refining and petrochemical facilities in the world. And environmental groups opposed to the Trump administration's policies are preparing to devote more of their time to defending Environmental Protection Agency regulations, sapping resources they might have used to sue industrial polluters.
While citizen suits in general are expected to increase, Clean Air Act cases like the Exxon suit are so complex that they stretch the bounds of what the groups can do, attorneys told Bloomberg BNA.
"We're not the federal government," Joshua Kratka, a senior attorney at the non-profit National Environmental Law Center who argued the case against the Baytown refinery, said. "There's no way we have those resources. There's really no substitute for a strong and effective EPA."
A U.S. District Court for the Southern District of Texas judge in April assessed penalties of more than $21 million for violations of Exxon's Clean Air Act permits based on self-reported "emissions events," or unauthorized pollution caused by equipment malfunctions or startup and shutdown. Since the company already had paid more than $1.4 million in state and local penalties, the net penalty was about $19.9 million. It appeared to be by far the largest citizen suit penalty based on records going back about 10 years, according to the Justice Department.
Exxon on May 24 filed a motion to alter the judgment, challenging the basis for the penalty and arguing that it should be eliminated. Kratka said plaintiffs would file a response arguing that Exxon's case was without merit.
Resource-Intensive Cases
The Clean Air Act allows citizens groups, such as environmental advocates, to bring enforcement challenges to industrial facilities believed to be violating federal air pollution standards. But the cases are expensive and time-consuming, attorneys said.
"There aren't that many Clean Air Act citizen suits in any given year," Eric Schaeffer, executive director of the Environmental Integrity Project and a former director of EPA's Office of Civil Enforcement, said. "They're difficult to bring."
Environmental groups will increasingly use their resources for suits against the federal government over rollbacks of environmental regulations on the fossil fuel industry, Kratka said. And "the more times citizen and environmental groups have to sue the government, the less capacity they have to sue the violators."
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The Baytown lawsuit succeeded because the environmental attorneys did a careful job of researching the facts of the violations, attorneys said. They had a boost because air emissions reports must be made available online in Texas, and the groups used those reports as evidence that Exxon had violated federal pollution limits. They also got four people who lived near the complex to testify.
Environment Texas Citizen Lobby Inc. and the Sierra Club sued Exxon in 2010. The Sierra Club has received funding from Bloomberg Philanthropies, the charitable organization founded by Michael Bloomberg, founder of Bloomberg L.P. Bloomberg BNA is an affiliate of Bloomberg L.P.
The suit claimed there were unauthorized air emissions of benzene, sulfur dioxide and other pollutants from Exxon's Baytown refining and petrochemical complex between October 2005 and September 2013. It cited State of Texas Environmental Electronic Reporting System (STEERS) reports to the Texas Commission on Environmental Quality documenting emissions of pollutants.
`Too Big to Comply'
Despite the hefty fine, Seth D. Jaffe, a partner at Foley Hoag LLP in Boston and coordinator of the firm's environmental practice group, who was not involved in the case, said the decision could be viewed as a victory for Exxon because the penalty covered years of violations and was small in comparison to the roughly $500 million the company spends on maintenance every year.
The maximum penalty could have reached $500 million, Jaffe wrote in a blog. Moreover, the federal judge denied the plaintiffs' request for injunctive relief.
"I think it's a win for Exxon because the law does not make any exceptions for facilities that are too big to comply," Jaffe told Bloomberg BNA. "The fact that it's impossible to comply doesn't mean you don't have to pay something if you're in violation."
Exxon Already Fined by Texas Regulator
An ExxonMobil spokesman said Texas regulators handled the case when the Texas Commission on Environmental Quality imposed the $1.4 million penalty on the basis of an agreed upon order. The state regulator also ordered Exxon to take corrective actions to reduce emissions. Exxon and the TCEQ agreed on the enforcement order in February 2012, two years after the environmental groups sued.
The spokesman, Todd Spitler, told Bloomberg BNA that aggregating volumes from emissions events over time, as the environmental groups did, "does not appropriately or accurately reflect the nature of the events or indicate an underlying issue at our integrated Baytown complex."
That's because the company reports emissions to federal and state regulators in a timely and consistent manner, complies with "all laws, regulations and permits, and has a robust compliance assurance system that enables workers to identify and report potential deviations from the company's Clean Air Act permit requirements, Spitler said.
"Baytown personnel dedicate thousands of hours every year monitoring, validating and documenting our compliance to these regulations and our permits," he said.
Spitler also said the Baytown complex had spent more than $1.3 billion since 2003 on
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environmental projects aimed at improving air quality and energy efficiency. Since 2005, the Baytown complex has reduced emissions from malfunctions and maintenance reported to the TCEQ by 90 percent, he said. Court records showed Exxon spent between $464 million and $685 million per year on maintenance of equipment at the complex.
Successful But Rare
The Baytown case is the third successful Clean Air Act citizen lawsuit filed by advocates against facilities in the Houston area over the past decade. During the trial, the Texas Oil & Gas Association raised fears that if the court validated the advocates' approach, it could lead to a "a cascade of citizen suits, seeking to relitigate years of past administrative enforcement."
But Environment Texas, one of the advocacy organizations involved in the Baytown litigation, can only handle one citizen lawsuit at a time, Luke Metzger, founding director of the group, told Bloomberg BNA.
Environment Texas is already involved in another Clean Air Act suit, this one against Pasadena Refining System Inc., which is owned by Petroleo Brasileiro S.A. (Petrobras). The lawsuit, filed in March, alleged the Houston-area refinery violated emissions limits thousands of times over the past five years.
Environment Texas and the Sierra Club filed two others since 2008--one against Chevron Phillips Chemical Co. and another against Shell Oil Co. Both were resolved with consent agreements. The groups said that the companies reduced emissions from their Gulf Coast plants by about 95 percent, or more than was required by their settlements.
Those cases, like the Exxon citizen suit, involved mainly "upset events," such as equipment breakdowns and malfunctions.
"The goal is to get plants to put money into maintenance and better design and training, so they don't break down and flare pollution into the community," Kratka said.
Texas has an affirmative defense for such upset emissions, meaning that if a company can prove that it satisfied conditions such as the events being unavoidable or not recurring, it has a defense against penalty.
Kratka, who argued the appeal before the Fifth Circuit, said that ExxonMobil said all the violations met those criteria.
"We challenged every one, and the judge this time said it was the defendant's burden to come up with proof," Kratka said.
N.Y. Says Exxon's Climate Change Proxy Costs May Be `Sham'
Posted June 02, 2017, 12:27 P.M. ET By Erik Larson
New York's top cop told a judge that his probe into Exxon Mobil Corp, uncovered "significant evidence" the oil giant may have misled investors about how it calculates the impact of climate change on assets and project decisions.
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New York Attorney General Eric Schneiderman said in a court filing June 2 that the investigation into Exxon's public statements about climate change revealed that for the last decade it may not have been pricing in the future impact of greenhouse gas emissions as it claimed.
"That evidence suggests not only that Exxon's public statements about its risk management practices were false and misleading, but also that Exxon may still be in the midst of perpetrating an ongoing fraudulent scheme on investors and the public," Schneiderman said.
If true, the allegations risk inflaming investors who this week backed a non-binding resolution urging the Irving, Texas-based company to consider whether it can prosper under strict greenhouse gas limits. While Exxon opposed the vote, it has accepted climate-change science and opposed President Donald Trump's decision to pull the U.S. out of the 2015 Paris Climate Accord.
Alan Jeffers, an Exxon spokesman, didn't immediately return a call for comment before regular business hours June 2. A message left with the company's media line wasn't immediately returned.
Proxy Costs
The allegations center on Exxon's claim that it applies so-called proxy costs to greenhouse gas emissions, which the company says "reasonably approximates the range of potential future government actions with respect to climate change," according to the filing. The attorney general said Exxon regularly cites the proxy costs to "assure investors that none of Exxon's projects or assets will be materially affected by future climate change-related regulations."
That claim may be vastly exaggerated, Schneiderman said in his filing in state court in New York.
"Exxon has identified only a single, anomalous instance in which a proxy cost was actually applied," the attorney general said. "Exxon's documents reveal a widespread lack of awareness among employees of the proxy cost policy, or how it should be applied."
The use of proxy costs "may be a sham," and Exxon also has "secret internal versions of proxy costs," Schneiderman alleged. The company told an employee from its majority-owned Imperial Oil Ltd. not to apply it to its Canadian oil sands projects, according to the filing.
Exxon has refused to make the employee available to testify, "contending for the first time that it lacks control over its majority-owned subsidiary from which it has been producing documents for months," he said.
Exxon has repeatedly denied wrongdoing and claims the state probe was started in "bad faith" because the outcome had been predetermined based on ideological coordination with environmental groups and even former Vice President Al Gore, an outspoken opponent of climate change.
Schneiderman and his Massachusetts counterpart, Maura Healey, have been investigating since 2015 whether Exxon misled the public and investors by withholding information about how climate change could impact the company's finances. Exxon sued to block their subpoenas for millions of pages of documents, while Republicans in Washington have sought to derail the investigations from Capitol Hill.
Schneiderman also referenced for the first time the existence of a second alias email account that
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was discovered in the course of the investigation, months after he accused Exxon of failing to disclose former Chief Executive Officer Rex Tillerson's secondary email account. He used the alias Wayne Tracker to discuss sensitive topics with the board.
The identity of the owner of the new alias account, which has the name "J.E. Gray," wasn't disclosed in the June 2 filing.
Sworn testimony of Exxon's lawyers suggested the company may have withheld the existence of the alias accounts as a "test of whether the Attorney General's office is reading the documents," according to Schneiderman.
Schneiderman filed the additional material in support of his May 8 subpoena to Exxon. The case was transferred to Manhattan by a federal judge in Dallas who said it belonged in New York, effectively restarting the litigation from scratch. Schneiderman has used the opportunity to make fresh allegations.
2017 Bloomberg L.P. All rights reserved. Used with permission
Trump's Paris Exit Leaves Him Isolated From C-Suites to Capitals
Posted June 02, 2017, 9:49 A.M. ET By Jennifer A. Dlouhy
The response to President Donald Trump's announcement he was exiting the Paris climate accord and wanted to renegotiate on his terms was immediate: The leaders of France, Germany and Italy said no.
On Wall Street, corporate executives pilloried the businessman president. Goldman Sachs' CEO tweeted for the first time, calling the move a setback for the environment and U.S. leadership. Tesla Inc.'s Elon Musk and Bob Igerof Walt Disney Co. quit a White House advisory council in protest.
Even the mayor of Pittsburgh, Pennsylvania - a city Trump highlighted as a beneficiary of his decision to turn his back on the global pact - vowed to abide by the Paris agreement.
Trump's decision leaves him more alienated than ever, isolated on the world stage and increasingly embattled at home.
Coming against the backdrop of sprawling probes into ties between Russia and Trump's campaign, the backlash threatens to sap the president's power when he needs it most to advance domestic priorities such as tax reform and a health care overhaul while confronting an increasingly bellicose North Korea.
It's a dramatic change in fortunes for the president after just 133 days in office. Business leaders no longer seem to fear Trump's tweets; foreign leaders have moved from attempts to find rapport to direct confrontation.
Consider that in earlier days, a tweet about Ford Motor Co. shipping U.S. jobs to Mexico prompted the automaker to announce it was abandoning plans to build a $1.6 billion plant there.
Days after his election, Trump called the top executive of United Technologies Corp, and told him
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not to move jobs from a Carrier factory in Indianapolis to Mexico. Carrier partially relented, agreeing to keep 1,100 jobs in the U.S. in exchange for $7 million in tax breaks and incentives from the state. Even so, 1,300 jobs are still going to Mexico.
And in her first visit with Trump in Washington, German Chancellor Angela Merkel gamely tried to shake Trump's hand during a photo opportunity, offering an optimistic assessment of the meeting despite the president's persistent criticisms of her country.
"I've always said it's much, much better to talk to one another and not about one another, and I think our conversation proved this," she said afterwards.
There is none of that fear and trembling now.
After Trump's announcement on Paris, Ford issued a statement asserting that "we believe climate change is real and remain deeply committed to reducing greenhouse gas emissions." Company chairman Bill Ford, the man Trump once described as "my friend," broke with the president over his executive order on immigration. And Ford still employs more than 7,000 workers in Mexico.
Although Carrier hasn't announced a change to its plans, other companies are moving production south. And foreign leaders now game out how to try to one-up the president.
In his first meeting with Trump, French President Emmanuel Macron squeezed Trump's hand so hard that the American's knuckles turned white. And when the two chatted before cameras, Macron spoke only French. He switched to English for his remarks with U.K. Prime Minister Theresa May.
After Trump's announcement on Paris, Macron tweeted, "Make our planet great again," and assured American scientists, engineers, entrepreneurs and "responsible citizens" they could find "a second homeland" in France.
Trump's first foreign trip as president left fellow members of the North Atlantic Treaty Organization unsettled and wary, as well. Trump omitted any clear commitment to the alliance's pledge of collective defense, leaving allies uncertain whether the U.S. would come to their aid if attacked.
Afterwards, unlike her White House visit, Merkel didn't extol the benefits of discussion.
She told a beer-hall rally in Munich that Europe "really must take our fate into our own hands," adding "this is what I have experienced in the last few days."
Former Defense Secretary Leon Panetta said the combined weight of Trump's NATO speech and his decision to leave the Paris agreement mark "the sad demise of a 70-year era of American global leadership."
`"America First' policies are threatening our strategic interests and eroding our moral standing in the world," Panetta said in a statement.
To be sure, the Republican voters that elected Trump to the White House have not turned away from the president. Among Republicans, 87 percent say they approve of the job Trump is doing, according to Gallup's most recent weekly poll. Trump's job approval has fallen just slightly, from 45 percent just after his inauguration to 41 percent.
And congressional leaders upon whom Trump depends to advance his agenda endorsed his action.
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House Speaker Paul Ryan (R-Wis.) called the Paris agreement "a raw deal for America" and commended the decision. And Senate Majority Leader Mitch McConnell (R-Ky.) was more blunt: "I applaud President Trump and his administration for dealing yet another significant blow to the Obama administration's assault on domestic energy production and jobs."
The tone of Trump's Rose Garden speech Thursday was unapologetic, evoking the inaugural address in which the president angrily lashed out at other countries playing the U.S. for a fool and vowed that "from this day forward, it's going to be only America first."
"The Paris agreement handicaps the United States economy in order to win praise from the very foreign capitals and global activists that have long sought to gain wealth at our country's expense," Trump said. "We don't want other leaders and other countries laughing at us anymore."
Trump did make an offer to renegotiate the Paris accord, but that was quickly rejected. Merkel, Macron and Italian President Sergio Mattarella issued a statement insisting that the agreement was "irreversible" and "cannot be renegotiated."
And after the president said he was taking action to put the interests of Youngstown, Ohio; Detroit, Michigan; and Pittsburgh above those of Paris, Bill Peduto, Pittsburgh's mayor, shot back that the city needed no such help: "I can assure you that we will follow the guidelines of the Paris agreement for our people, our economy and future."
--With assistance from Shannon Pettypiece
2017 Bloomberg L.P. All rights reserved. Used with permission
Japan Voices Paris Climate Pact Support Despite U.S. Stance
Posted June 02, 2017, 11:00 A.M. ET By Chisaki Watanabe
Japan, one of the world's biggest polluters, resolved June 2 to remain committed to efforts to tackle global warming despite President Donald Trump's decision to pull the U.S. from the Paris Agreement on climate change.
"Japan believes the leadership of the developed countries to be of great importance, and the steady implementation of the Paris Agreement is critical in this regard," the Ministry of Foreign Affairs said in an emailed statement.
The nation's engagement with the rest of the world on climate change is critical, given Japan's contribution to carbon emissions. While China is the world's biggest polluter in terms of how much carbon dioxide it produces in absolute terms, Japan is the third-largest emitter on a per capita basis behind the U.S. and Russia.
"Climate change requires a concerted effort by the whole of the international community," the foreign ministry statement said.
Japan's environment minister, Koichi Yamamoto, extended support for the Paris accord even further, telling reporters at a morning briefing that the nation is "greatly disappointed" in Trump's decision and as the the world's third-biggest economy, it remains committed to Paris.
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Trump's decision to leave Paris "is equal to turning our back on human wisdom after we have made so much progress," Yamamoto said. "On top of being disappointed, I am outraged."
Strong words from Yamamoto aside, environmental groups said Japan must still do its share to convince the world of its seriousness about climate change.
Though Japan is a signatory to the Paris accord, environmental groups and lobbyists said the country's commitments are weak. Japan also has come under criticism for its continued funding of coal projects, especially abroad in places like Indonesia and at home where a slew of new coal-fired power projects are being planned.
Coal Projects
"Japan is contradicting itself," Hisayo Takada, Greenpeace Japan's energy project leader, said by phone. "While the country tells the outside world it will work hard to reduce greenhouse gas emissions, the Japanese government is tolerating new coal projects."
The Paris Agreement, reached in December 2015, is broader than any previous climate accord. It calls for reducing carbon dioxide emissions in hopes of limiting global warming to 2 degrees Celsius (3.6 degrees Fahrenheit) above pre-industrial temperatures.
"Climate change measures taken by the U.S., the world's second-largest emitter, are very important," Sadayuki Sakakibara, chairman of business lobby Keidanren, said in a statement. "We would like the U.S. to keep fulfilling its responsibility in the international community. Japan should continue calling on the U.S. while keeping close cooperation with international society." 2017 Bloomberg L.P. All rights reserved. Used with permission
Brazil Plots Steady Clean-Energy Course Amid Political Turmoil
Posted June 02, 2017, 11:24 A.M. ET By Vanessa Dezem
Brazil is taking steps to promote new renewable-energy projects as the government seeks to reassure the industry that political turmoil won't threaten current power policies.
The country will organize at least one power auction for clean-energy projects this year, according to Eduardo Azevedo, secretary of energy planning and development at the Ministry of Mines and Energy. A second auction is also being considered that would be open to all energy sources.
The move reflects growing interest in clean energy as the country seeks to meet its commitments under the global Paris climate agreement signed in 2015. The plans also show that Brazil is seeking to move forward with its energy plans and assuage concerns that an expanding political crisis would crimp efforts to boost wind and solar energy.
"There is room for energy auctions this year," Azevedo said at an event in Sao Paulo June 1. Brazil's carbon emissions targets "make it clear the necessity of expanding renewables, which will represent two-thirds of the country's investments in the power sector over the next 10 years."
Brazilian stocks, bonds and currency all slumped last month after President Michel Temer was
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accused of helping obstruct the ongoing Carwash corruption probe. Amid the turmoil, Minister for Energy and Mines Fernando Coelho said he has no plans to revisit his energy strategy and would not be stepping down, despite calls to do so from his party.
"We're moving forward with reforms and our policy like nothing else is happening," Azevedo said.
Canceled Auction
The ministry canceled in December what would have been 2016's only auction for wind and solar power, as the worst recession in decades drags down electricity demand. Some companies are exiting contracts they won in previous auctions.
That may clear the way for the next auction, which is expected by September. While there's little need for new power plants now, there may be in a few years when demand growth resumes, Azevedo said.
Wind and solar developers have signed no long-term supply contracts since November 2015. The lack of new projects is threatening the supply chain and has the potential to leave wind-turbine factories empty and drag down the country's nascent photovoltaic industry.
"It is important to have auctions planned and it is a good start," said Jean Claude Robert, wind power director for Latin America at General Electric Co. "But we need volume. Today, GE is executing four projects, but 2018 will be a hard year as the industry doesn't have more contracts."
Political Turmoil
Brazil's energy agencies have not been untouched by the political upheaval. Maria Silvia Bastos, president of the country's development bank BNDES, stepped down last week citing personal reasons, which was seen as a setback to Temer.
Banco National de Desenvolvimento Economico & Social, as the development bank is formally known, is the world's biggest provider of funding for renewable energy. The agency is reviewing its lending strategy and negotiating with multilateral banks like International Finance Corp, and Inter American Development Bank to take on some of the risk for financing renewable projects, according to Carla Primavera, BNDES's head of energy.
BNDES is seeking to scale back financing for some technologies while encouraging more borrowing from banks, an effort aimed at reducing developers' reliance on its low-cost financing. For others, such as renewables, it will continue to offer cheap loans, said Primavera.
"We have supported the expansion of wind energy in Brazil since the beginning," said Primavera. "We are figuring out new financing structures with multilateral banks and capital markets, and that demonstrates that the confidence in the sector has grown."
2017 Bloomberg L.P. All rights reserved. Used with permission
Germany Promises to Press Ahead on Climate Pact Despite U.S. Pullout
Posted June 02, 2017, 11:18 A.M. ET By Arne Pelfs and Rainer Buergin
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German Chancellor Angela Merkel said she will rally Europe and the world behind the Paris climate accord, calling it "irreversible" even after President Donald Trump's pullout.
Merkel, who has signaled that she's losing faith in the U.S. as a dependable ally, vowed to press ahead "more decisively than ever" with combating climate change and praised Americans who support her cause.
"We need this Paris Agreement to protect creation," she told reporters June 2 in Berlin in her first public comments on Trump's decision. "Nothing can or will stop us."
The announcement by Trump, who said the climate pact favors other nations at the expense of American workers, is prompting dismay among European governments and prominent U.S. business leaders. For Merkel, a Lutheran pastor's daughter who holds a Ph.D. in physics, it also offers a chance to burnish her environmental credentials as she seeks a fourth term as chancellor in September.
Trump's suggestion that the almost 200-nation agreement could be renegotiated was rejected by the chancellor's chief of staff, Peter Altmaier.
"We were not just sad but disappointed that a very important partner on climate change would drop out with the stroke of a pen," Altmaier told German broadcaster ARD. "Personally, I believe that renegotiation is the wrong approach."
Merkel, who presided over an early United Nations global-warming conference in Berlin in 1995 when she was Helmut Kohl's environment minister, said she will keep fighting.
"There's no doubt that the road will be rocky--I've experienced that again and again since I entered politics," she said June 2. "But when I look back at the last 20 years, I'm also convinced that the path is irreversible."
2017 Bloomberg L.P. All rights reserved. Used with permission
Top Russian Oil Boss Scorns Tesla, Electric Cars as Overrated
Posted June 02, 2017, 11:28 A.M. ET By Ksenia Galouchko and Stephen Bierman
The day after President Donald Trump said the U.S. will exit from the Paris climate deal, the Russian chief of the world's largest listed oil producer by output is taking on electric cars.
Igor Sechin, chief executive officer of Rosneft PJSC, called manufacturers including Elon Musk's Tesla Inc. overvalued and said electric cars are "not as popular as had been expected" in Europe's biggest economies. He challenged Tesla's valuation and business model in particular, citing "extremely aggressive" sales growth plans and criticizing the car maker's capital expenditures.
"The market's assessment of the prospects of electric car producers, in our view, is significantly overestimated," Sechin said in a June 2 speech at the St. Petersburg International Economic Forum. "The unconditional truth remains in the fact that the hydrocarbon power industry has been and will be in demand."
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Major oil companies have been trimming their long-term forecasts for oil demand as electric cars start to compete with gasoline models on both price and performance.
Musk, a tech industry icon whose ventures also include space travel, said June 1 that he'd leave White House advisory councils after the U.S. president's decision to withdraw from the climate accord.
"Until the electric transport industry becomes as user-friendly and attractive for consumers as the cars with internal combustion engines, the prospects for electric vehicles remain largely uncertain," Sechin said.
--With assistance from Srinivasan Sivabalan.
2017 Bloomberg L.P. All rights reserved. Used with permission
Trump's Plan to Renegotiate Climate Deal Unlikely to Succeed
Posted June 02, 2017, 9:24 A.M. ET By Eric J. Lyman
President Donald Trump's offer to renegotiate the U.S. re-entry into the Paris Agreement or to produce a "new transaction on terms fair to the United States" is probably a non-starter, according to key observers and parties to the Paris deal.
Major supporters of the Paris Agreement quickly indicated that they are not open to revisiting the landmark 2015 agreement reached by nearly 200 countries.
In an unusual move, the three largest continental European economies--France, Germany, and Italy--issued a joint statement in the wake of Trump's remarks saying, "We firmly believe that the Paris Agreement cannot be renegotiated since it is a vital instrument for our planet, societies, and economies."
According to a senior United Nations source, who asked not to be further identified, it makes little sense for the U.S. to withdraw from the Paris deal if its goal was simply to renegotiate U.S. obligations under the agreement.
"Each country's NDC [nationally determined contribution, or pledge for climate action that is part of the Paris Agreement] is established by that country, and a country has the right to adjust its emissions reduction target or its financial commitments," the U.N. source told Bloomberg BNA. "There is no need to withdraw from the Paris deal and then try to re-enter if that is the goal."
The source admitted that other countries would have been critical of any party looking to "backslide" on its Paris Agreement targets, "but that is nothing compared to how critical countries are now."
Formally, the secretariat for the U.N. Framework Convention on Climate Change said it is open to U.S. renegotiations, according to a statement issued following Trump's remarks.
"The secretariat notes the announced intention to renegotiate the modalities for the U.S. participation in the agreement," it said. "In this regard, it stands ready to engage in dialogue with the
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United States government regarding the implications of this announcement."
But as a pact "signed by 194 countries and ratified by 147 countries," the Paris Agreement "cannot be renegotiated based on the request of a single party," the UNFCCC said.
Kyoto Comparison
"This idea that the U.S. will renegotiate some kind of alternative is really dead before it gets started," said Niklas Hohne, a founding partner of the NewClimate Institute, a group that scientifically analyzes climate data. "The Paris Agreement was a culmination of 20 years of negotiation and I doubt countries will be willing to undo that, and even if they did, I don't think Donald Trump is someone who could lead such a charge."
In 2001, when the U.S. announced that it would withdraw from the Kyoto Protocol--the smaller scale predecessor to the Paris Agreement--President George W. Bush also vowed to produce an alternative to the Kyoto document.
That plan never gained traction, and ultimately, it was reduced to a 2002 proposal, which was never implemented, for the U.S. to reduce greenhouse gas emissions per unit of gross domestic product. The U.S. remained the only party to the Kyoto Protocol not to ratify it.
"I think the same thing will happen with the Trump idea of creating a something new or renegotiating the Paris deal," Hohne said.
The senior U.N. source agreed: "I suspect the talk about renegotiating the Paris deal or creating a new alternative is probably a small concession to the White House figures who had been pushing Trump to stay in" the Paris Agreement, the source said.
Trump's June 1 remarks about renegotiating what he called "a deal that is fair" illustrated that his own commitment to that strategy might be limited. "If we can, that's great," the president said. "And if we can't, that's fine."
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