Attention Democrats: UK Elections Not Only Cautionary Tale from Europe

President Trump’s threat to pull the United States out of international efforts to combat climate change has created a major vacuum of leadership.

By Jason Gold, Senior Fellow, Progressive Policy Institute

As Democratic presidential hopefuls gather in Los Angeles this week for the last debate of 2019, candidates should look across the Atlantic for a cautionary tale.

No, I’m not just talking about last week’s UK elections, which saw Labour’s far left-wing leader, Jeremy Corbyn, get crushed by Brexiteer Boris Johnson. Democrats can also draw useful lessons from the United Nations Conference of Parties (COP25) in Madrid, which by all accounts failed to kickstart progress toward implementing the Paris Climate Accords.

The culprit here, of course, is President Trump. His threat to pull the United States out of international efforts to combat climate change has created a major vacuum of leadership. What happened in Madrid underscores the folly of relying mainly on governments to tackle the climate crisis. Democratic presidential hopefuls should promise not only to re-exert U.S. leadership but to engage the private sector in efforts to reduce greenhouse gas emissions — regardless of which way the political winds happen to be blowing.

Consider this: In the very same months leading up to the Madrid meetings, a slew of announcements in business and financial markets marked progress on the goals meant to address the climate crisis. For example:

• Goldman Sachs announced its unwillingness to lend on Arctic oil-and-gas exploration, most new coal-fired power plants, or new mines for coal used in electricity. In addition, the investment giant has pledged $750 billion to finance and invest in climate-related initiatives. This is an expansion of Goldman’s 2005 Environmental Policy Framework that guides the company’s investments and financing in the energy space.
• At the United Nations annual summit in New York this fall, financial institutions worth the equivalent of $47 trillion widely adopted the United Nations backed “responsible banking principles” to fight climate change. These banks, including Citigroup and Barclay’s, adopted the framework intended to shift lending away from the fossil fuel industry.
• Earlier this fall, the Business Roundtable, an association of CEOs of American corporations that employ 15 million workers released their “Statement on the Purpose of a Corporation”. This ushers in an era of a new corporate mission that includes a broadening of stakeholders. BRT cited this in its statement: “Supporting the communities in which we work. We respect the people in our communities and protect the environment by embracing sustainable practices across our businesses”.

The timing of some announcements was not random of course, and most likely released to coincide with the Madrid and UN meetings and maximize public relations. Additionally, the good of humanity is not the only consideration for investors and corporations. A recent report highlights 2.3 trillion other reasons, pointing to the possible risk of loss in economic value that these firms face from extreme weather conditions. It does, however, accentuate the leadership position business has been trying to establish in a healthy society and climate’s role in our future.

This evolving shift in market forces for social good and a broader corporate mission continues to provide the blueprint, capital, and perhaps most importantly, global leadership required to keep the great energy transition moving from coal-based sources to cleaner, more sustainable solutions to combat climate change. But as trillions of dollars and almost undivided efforts by markets and businesses organize to be better citizens, they ultimately can’t do it alone.

And neither can any future President.