By John Bickerman
President Donald Trump’s decision to have the U.S. withdraw from the Paris Climate Accord will undoubtedly have many repercussions in many different areas and industries, ranging from energy to environmental and well beyond. But, at its core, Thursday’s action can be boiled down to a deal negotiation. Below are a few basic alternative dispute resolution (ADR) principles, and how they apply to the U.S. Paris Accord pull-out:
Any analysis of negotiation strategy starts with identifying the ‘interests,’ not the positions of parties. One also must assume that parties behave rationally.
The President has two plausible interests that he was trying to vindicate. First, he could be trying to do what he said, which was protect American jobs; the second plausible interest is that he was trying to affirm and solidify his political base. The second appears to be the more rational explanation for his behavior. When the President returned from his European trip after failing to endorse fully NATO, his popularity ticked up, almost exclusively with his hard core Republican base. It wouldn’t be surprising if withdrawal from the Paris Accord further solidifies his base and marginally increases his popularity and affirms his promise to the voters he believes elected him.
A corollary would be that it gets the Russia investigation off the front pages, although based on the subsequent news cycles that seems highly unlikely. With respect to protecting American jobs, the better data suggests that this interest will not be achieved and employment in the U.S. could actually be harmed if foreign countries retaliate against the United States by enacting carbon taxes as some analysts have suggested they might. Moreover, there is a seemingly strong case that jobs are being created in the renewable energy sector that would surpass the jobs lost in the fossil fuel industry. The Washington Post reported that there was a fierce battle in the White House over the decision. The “withdrawal” side, led by Senior Advisor Steve Bannon, appear to have deluged the President with data that rejected the consensus view. Much of the data presented by the Bannon team was highly suspect, according to the Post.
Remember that only three countries are now not part of the Paris Accord — Syria, Nicaragua and the United States. It’s extremely rare, perhaps unprecedented, to have such worldwide unanimity on an issue.
A good negotiator also tries to understand how his counter-parties will react to his negotiating position.
The Administration, either misjudged or doesn’t care about International repercussions. Other countries, especially China, Germany and France will step into the vacuum created by the withdrawal of the U.S. As reported by the news media, China intends to ramp up its production of renewable energy products, potentially usurping a role that the United States could have.
The threat of an action often carries much greater leverage than the action itself.
There is no opportunity under the Paris Accord to withdraw from its terms until 2019. The President would have had much greater leverage if he had continued to threaten withdrawal between now and 2019 instead of playing his hand now. This line of thinking was apparently presented to the President by Secretary of State Tillerson and other according to news reports. Clearly, the federal government has lost its leverage in influencing further changes in the pact. Interestingly, 30 cities, 3 states, including California and 100 companies have formed an alliance that supports the Accord and will affirm their support to the U.N. This development further undermines the influence President Trump will have on this issue. It’s rare for a negotiator to dissipate his bargaining power in this manner.
The best negotiators are able to reach strategic and creative compromise with equal negotiation partners, and not only with weaker parties who are more easily pressured into action.
The President has not shown himself to be an especially good negotiator when there are other equal partners with which to negotiate. The strategy he employed in his business, when he was often negotiating with weaker counter-parties and could afford to stake out extreme positions, doesn’t work in International negotiations (or with the other branches of government) where parties are less likely to be “bullied” into agreement.
Time and again, since he took office, the President has staked out extreme positions or made ultimatums. When his bluff has been called, he has lost all ability to negotiate and has been ignored. That’s what seems to be happening with the Paris Accord. The rest of the world will continue to adhere to the agreement. The United States has squandered its leadership position and has no “fallback” position that would allow it to exert any influence in the future, unless it rejoined the Accord.
There is no art to “re-negotiating” completely voluntary, or multi-party, deals.
Despite the President’s avowed intent to re-negotiate the Paris Accord, that will not be possible. First, the Paris Accord has only voluntary commitments. There are no binding obligations, other than the promise of the first world countries to pay for environmental efforts in developing countries. (So far, the United States has paid $1 billion of the $3 billion it has promised to pay under the agreement.). Second, it’s not possible to renegotiate a multi-lateral agreement. There simply is no “one” party with which to negotiate.
John Bickerman is the Chair of the International Institute for Conflict Prevention & Resolution’s Environmental Committee, a lawyer and the founder of Bickerman Dispute Resolution, PLLC