Pulling Out of Climate Accord Hurts American Industry

The Trump administration is pulling out of the Paris Climate Treaty. In addition, Trump's people are hamstringing the EPA and appear to be considering gutting emissions standards for automobiles and power plants:

The Trump administration gave notice it intends to relax the rules governing greenhouse gas emissions on new model cars Thursday, in its latest move to undo President Barack Obama’s climate policies.

In a notice on the federal register, the Environmental Protection Agency and the Transportation Department announced they were considering rewriting emissions standards for cars and light trucks made between 2021 and 2025.

While other climate-change initiatives spearheaded by President Obama — like the EPA strategy for reducing emissions from power plants, called the Clean Power Plan — received more scrutiny from industry and conservative critics, emissions standards for cars are just as consequential for curbing the buildup of atmosphere-warming gases, analysts said.

The problem with this plan is that the rest of the world is going forward with clean energy and reduced emissions. Germany is planning to have only electric cars by 2030, and other countries are considering similar moves.

If the United States doesn't have a domestic market for such automobiles, American companies won't build them. They won't develop the technology. They will fall behind and be taken over by foreign companies, much like Chrysler was.

The same thing is true for power generation: Americans pioneered semiconductors and solar cell technology. But we've lost out to the Chinese in photovoltaic technology. We have a fairly robust wind power market, especially in Texas, but European companies have the upper hand in wind technology, and the Chinese have 70% of the market for rare earth magnets used in wind turbines and all manner of electronic devices.

American car companies and electrical utilities are famously short-sighted: they have no incentive to plan for the future. CEOs get compensated for daily and hourly stock increases. Note the GM's big bold announcement in 2017 wasn't about new technology or new production lines, it was a $5 billion stock buyback program aimed at jacking up share prices.

The US auto industry has historically been more interested in selling high-end, high-profit gas guzzlers to fat and lazy Americans than increasing their world market share. But this is a doomed strategy: as economic inequality continues to grow in the United States Americans will be less and less able to afford expensive cars.

Tesla's electric cars are cool and everything, but they're pricey. Unless the US government does something to address growing gap between rich and poor Americans, or encourage domestic production of inexpensive cars, foreign companies will step in to sell their cheaper and more efficient vehicles to Americans.

The downward spiral Trump voters are worried about will only get worse as his policies (and lack of them) turn the United States into just another third-world country.