President Trump announced the withdrawal of the US from the Paris climate agreement last week, arguing it was destroying American jobs. Though the US markets broadly reacted positively to the news, there were winners and losers. Coal stocks trended higher, but alternative energy stocks took a hit as markets digested the possibility of a government boost to domestic fossil fuels
There is widespread skepticism if the decision will actually benefit the Americans
By exiting the accord, Trump said he has made good on his campaign promise of restoring American jobs. The exit from the accord would bring back some jobs to the coal industry, but the industry as such is shrinking. On the other hand, clean energy is seeing tremendous growth from state-led mandates towards emissions and lower prices as compared to fossil fuels. Favoring the shrinking coal industry for political gains over an upcoming sector does not promise any long term benefits to the American economy. Further, exiting the accord could possibly subject the US to trade retaliation from member nations.
The sun has not yet set on alternative energy
Technically, US cannot quit the until 2019/2020, so the agreement is definitely not falling apart. But even if the US quits, it appears that the global trend towards cleaner sources is strong enough to survive the blow from Trump’s decision. Member countries remain committed to it and so do many states in the US, who will continue with state-level regulations towards emissions despite their leadership. Economics, and not politically motivated decisions will influence the future of alternative energy.
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