For those following along over the past two years this will not come as a surprise. European manufacturers understand the entire foundation for the Paris Treaty was about economics, economic advantages and the transfer of economic strength away from the U.S., not climate. Specifically for Germany the outlook is especially troubling.
First, Germany will be the primary EU country to fill the financial void from the U.K. leaving the EU (Brexit); that financial hole is approximately €15 billion per year. Secondly, Germany will be faced with having to renegotiate trade deals with the U.S. while they remain encumbered with the regulatory burden of the Paris treaty, while the U.S. negotiators are not. This is a large advantage for Team America.
As such, today we see and immediate reaction. German auto manufacturers announce they are faced with losing a competitive advantage over the U.S. in the global market, and will now need to reassess their domestic production and manufacturing standards:
REUTERS – Germany’s powerful car industry said Europe would need to reassess its environmental standards to remain competitive after the United States said it would withdraw from the Paris climate pact.
President Donald Trump said on Thursday he would withdraw the United States from the landmark 2015 global agreement to fight climate change, drawing anger and condemnation from world leaders and heads of industry.
“The regrettable announcement by the USA makes it inevitable that Europe must facilitate a cost efficient and economically feasible climate policy to remain internationally competitive,” Matthias Wissmann, president of the German auto industry lobby group VDA, said in a statement on Friday.
“The preservation of our competitive position is the precondition for successful climate protection. This correlation is often underestimated,” Wissmann said, adding that the decision by the Unites States was disappointing.
The VDA said electricity and energy prices are already higher in Germany than in the United States, putting Germany at a disadvantage. (link)
Think about the underlying argument here.
Funny that. Apparently, when push comes to economic shove the German sensibilities are connected more to their economics than to any do-gooder need to save the planet.
It won’t stop with Germany either. Specifically by design of their negotiating teams, China and South-East Asia writ large are inoculated from the economic damage of the Paris Treaty. The EU and the U.S. were set-up by the global financial systems to fall hardest on the economic sword of redistribution. Other massive manufacturing growth economies did not have to meet the same level of intentional economic infliction.
Germany is merely responding to the predictable future.
We can anticipate many more industrialized nations accepting the looming financial burden and positioning themselves for the exits. Anticipate treaty exits coming faster than a fat kid playing dodge ball.