Friday / September 21.
HomeFT SelectGE’s Immelt urges Trump to remain in Paris climate accord

GE’s Immelt urges Trump to remain in Paris climate accord

Jeff Immelt, the GE chairman and chief executive, has called for Donald Trump to keep the US in the Paris climate accord, weighing into a debate inside the new administration over a campaign promise to withdraw from the landmark agreement.

“We are for staying in the treaty. I think global engagement is a good thing,” Mr Immelt told a Washington audience on Thursday. 

The business community “has kind of moved on in this debate” over climate change,” he told students at Georgetown University. “As a company we think that climate change is real. [Withdrawing from the Paris accord is] not going to change one thing that we do regarding energy efficiency . . . and I think all business is going to feel the same way.” 

Mr Immelt, who is a member of the new US president’s manufacturing advisory council and, as the head of a US company that derives almost 70 per cent of its revenues from overseas, is a leading defender of globalisation, also repeated a warning against taking the US down a protectionist path. 

The US needed to “level the playing field” for its companies globally by investing in infrastructure at home and pushing tax reform, including moving to a controversial “border-adjusted” territorial system, he said.

He also backed Mr Trump’s preference for negotiating bilateral trade agreements over multilateral ones, arguing that in a rapidly changing world such deals could be a more nimble way of expanding trading relationships. 

Global elites, he warned, needed to accept that globalisation had not worked for everyone and companies must move from a model built around chasing low-wage production centres around the world and invest at home. The consequences of past mistakes, he said, were that companies would now face more efforts by governments to control trade for some time.

“We are not going back to a pure free trade world,” Mr Immelt said. “We just aren’t.” 

But he warned that the Trump administration would be making a mistake by ripping up the North American Free Trade Agreement rather than improving it or resorting to other forms of protectionism. “We have the most to lose through protectionism. If leaders think people want to live without the many benefits economic integration has enabled, they’re in for a rude awakening. We need to fight for new technologies not old ones.” 

“Instead of moving backwards let’s compete for the world,” he said. 

Answering questions from the audience, Mr Immelt said the Paris accord represented a business opportunity as well as a reason to develop technology and pursue innovation. GE now had a $12bn renewable energy business that did not exist a decade ago, he noted.

Thursday’s intervention by Mr Immelt came as a debate over the Paris accord has divided Mr Trump’s White House.

Steve Bannon, the president’s chief strategist, and Scott Pruitt, the head of the Environmental Protection Agency, have argued that the US should withdraw, while Rick Perry, the energy secretary, and Rex Tillerson, secretary of state, have pushed to remain in the accord while adjusting US commitments. 

Ivanka Trump, the first daughter, and husband Jared Kushner, both influential advisers to Mr Trump, have reportedly argued in favour of remaining.

The issue was debated at two recent meetings, one last week and one on Monday, according to a person briefed on the discussions. 

At the meeting last week, Mr Bannon and Mr Pruitt were said to have been supported by Donald McGahn, the White House counsel, who has argued that the only way the US could back away from the commitments to cut emissions made by the Obama administration was to quit the accord completely.

That view was contrary to the view of state department lawyers and other legal experts. They point out that the agreement states that a party to the Paris accord “may at any time” adjust commitments “with a view to enhancing its level of ambition”, which in the view of some lawyers leaves open the option of scaling back US emissions cuts. 

However, at last week’s meeting, Mr Bannon’s demand for the US to leave the agreement altogether had the upper hand, the person briefed on the internal White House debate said, and the second meeting on Monday, held to thrash out the legal issues, ended by reiterating the conclusion that withdrawing from the accord was the only way the US could avoid having to implement the Obama administration’s pledges. 

Andrew Light, a former senior adviser to the US special envoy on climate change during the negotiations before and after Paris, suggested the Trump administration was deliberately misinterpreting the accord. 

“It is perfectly clear that the targets are not legally binding,” he said. “The whole thing has been imagined by the White House to give themselves some cover for whatever moves they are making.” 

Via FT