With the U.S. back in the Paris Agreement, the heavy lifting on emissions reduction is beginning

While on the 2020 campaign trail, Presidential candidate Joe Biden signaled his intent for the United States to rejoin the Paris Agreement, which the nation formally exited in November 2020. And now that candidate Biden is President Biden, the U.S. is moving forward on that front.  

The Paris Agreement by the United Nations Framework Convention on Climate Change (UNFCC) requires each of the 197 participating countries to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius. It also aims to strengthen the ability of countries to deal with the impacts of climate change. To reach these ambitious goals, appropriate financial flows, a new technology framework and an enhanced capacity building framework will be put in place, thus supporting action by developing countries and the most vulnerable countries, in line with their own national objectives. The nonbinding agreement also provides for enhanced transparency of action and support through a more robust transparency framework.

The U.S. announced its intention to exit the Paris Agreement in June 2017. At that time, former President Trump said that the U.S would begin negotiations to re-enter either the Paris Accord or an entirely new transaction on terms that are fair to the United States, its businesses, its workers, its people, and its taxpayers.  

That decision was panned, at the time, by many well-known, household name shippers.

In a letter sent to former President Trump on April 26, 2017, 16 companies, including Apple, DuPont, General Mills, Google, Intel, and Walmart, among others, pleaded their case for why the U.S. should remain in the agreement.

“Climate change presents U.S. companies with both business risks and business opportunities,” the letter stated. “U.S. business interests are best served by a stable and practical framework facilitating an effective and balanced response. We believe the Paris Network provides such a framework.”

As for steps taken on the climate front early into the Biden presidency, things are moving at a rapid clip, with the U.S. having rejoined The Paris Agreement in late January, as well as renewing the nation’s focus on climate change, issuing an executive order focused on addressing the climate crisis at home and abroad, while creating good-paying union jobs, building sustainable infrastructure, and delivering environmental justice.

“The stakes on climate change just simply couldn’t be any higher than they are right now,” said Special Presidential Envoy for Climate John Kerry earlier this year. “It is existential.  We use that word too easily, and we throw it away.  But we have a big agenda in front of us on a global basis, and President Biden is deeply committed — totally seized by this issue, as you can tell by this executive order and by the other — the initiative for getting back into Paris immediately.  That’s why he rejoined the Paris agreement so quickly, because he knows it is urgent. 

He also knows that Paris alone is not enough — not when almost 90 percent of all of the planet’s emissions — global emissions — come from outside of U.S. borders.  We could go to zero tomorrow and the problem isn’t solved.”

From a logistics perspective, many industry stakeholders view the Paris Agreement as being very important, due largely to its ambition, global scope and providing a very broad framework. And the timing of the U.S. re-entering the Paris Agreement is key, with the United Nations set to hold a climate meeting in December, which will focus on reviewing each participating nation’s commitment and status.

“The U.S. has been out of the Paris Agreement for four years, and, while we have been out, the interesting part is that no other countries but the U.S. have exited and some have ratcheted up their targets,” said David South, Sr. Principal, Energy & Utilities Practice and Lead, Sustainability Team at West Monroe Partners. “We are still off the trajectory of achieving its targets looking at it going out. Of the countries that have made the commitment based on where they are today, and the mission, we are going to be at 3 degrees Celsius, as opposed to 2 degrees Celsius.”

From an emissions reduction perspective, South also observed that there is an expectation that the U.S. is going to be looking at slashing CO2 emissions by between 45%-to-50% by 2030 compared to 2005 levels, which he described as substantial.

And South’s colleague, Jeremy Tancredi, Director, Operations Excellence/Supply Chain Management at West Monroe Partners, said that there are various approaches for logistics and supply chain stakeholders to take in terms of reducing emissions.

“Some ways you do that are by focusing on things like route optimization, delivery process improvements and things like that so you are actively taking miles off of the road, and are shortening the last mile of the supply chain and eliminating the need for some of these additional vehicles and additional operations in place,” he explained.