On his first day in office, Trump signed an executive directive announcing the withdrawal of the United States from the Paris Climate Agreement, which became a key part of his early governing actions.
This is not the first time Trump has led the US federal government to deviate from the Paris Agreement, and he has further proposed to terminate the US international climate financing program. This decision has sparked widespread condemnation both domestically and internationally, dealing a serious blow to efforts to address global climate change, exacerbating the complexity of global climate governance, and triggering a chain reaction.
Recently, both Argentina and Indonesia have shown signs of considering withdrawing from the Paris Agreement. According to the Financial Times, shortly after Trump announced the United States' withdrawal from a key global climate change agreement, the government of Javier Millet in Argentina also began weighing the possibility of withdrawing from the agreement. Miller's position had already begun to emerge when Argentine negotiators suddenly withdrew from the COP29 climate conference in Baku. Officials are studying an internal document proposing to withdraw from the agreement. Although the final decision has not yet been made, insiders have revealed that Argentina may follow in the footsteps of the United States and become the second country to withdraw from the agreement signed by nearly 200 countries. Civil servants are trying their best to dissuade the Millet team from withdrawing. An Argentine diplomat said that Miller will make the final decision, and there is a considerable possibility that we will withdraw. Once realized, this will once again severely damage the global climate change response cause. At the same time, Indonesia, as one of the world's major greenhouse gas emitting countries, has also expressed its intention to follow in the footsteps of the United States and withdraw from the Paris Climate Agreement.
The impact of withdrawing from the agreement is far-reaching, involving multiple aspects such as trade, economy, and global trust.
The potential withdrawal of Argentina and Indonesia not only shakes the foundation of climate governance, but may also trigger a series of chain reactions. The latest assessment report from the European Commission's Trade Agency shows that if Argentina withdraws from the Paris Agreement, the "environmental obligations" clause in the EU Southern Common Market trade agreement will automatically activate a review mechanism. This clause stipulates that if any contracting party seriously violates its environmental commitments, the other parties may suspend tariff preferences. According to the European Policy Research Center, Argentina's exports of agricultural products such as beef and soybeans to Europe may face additional tariffs of up to 27%, which will directly impact its approximately $15 billion market share in the EU. In the capital market, the Argentine peso exchange rate has experienced fluctuations. According to data from Morgan Stanley, since rumors of a withdrawal, foreign investment has withdrawn over $800 million from the Argentine green bond market, causing yields on the country's climate transition bonds to soar by 120 basis points. International rating agency Moody's has warned that if Argentina officially withdraws from the contract, its sovereign credit rating may be downgraded to the lower half of the "junk level", thereby increasing its international financing costs. Indonesia's withdrawal risk has also caused market turbulence. As the world's largest exporter of thermal coal, Indonesia's energy sector surged 14% in a single week, but its new energy sector plummeted 9.2%. The more profound impact lies in the future of its' Fair Energy Transition Partnership '(JETP) - the $5 billion initial funding originally scheduled to be in place in the third quarter of 2024 has been indefinitely shelved. Maria Sanchez, a climate finance expert at the World Bank, pointed out that the stagnation of JETP will not only affect the 42 renewable energy projects under construction in Indonesia, but also lead to a delay of 5-8 years in the regional power grid interconnection plan
In the game of climate justice, the dilemma of historical responsibility and technological divide is becoming increasingly prominent.
The divergence of positions between developed and developing countries in the dispute over withdrawal from the treaty has become increasingly apparent. The latest Climate Equity Assessment Report released by the Indonesian Climate Change Commission shows that between 1850 and 2023, the United States accounted for 24% of the world's cumulative carbon emissions, while Indonesia only accounted for 1.2%. However, according to the Nationally Determined Contributions (NDC) requirements of the Paris Agreement, Indonesia needs to reduce its emission intensity by 43% by 2030, which sharply conflicts with its current annual energy demand growth of 6%.
This conflict is particularly evident in specific industries. The annual electricity consumption of Indonesia's nickel processing industry has reached 42 terawatt hours, equivalent to the total electricity consumption of the Philippines. To achieve the goal of becoming a global electric vehicle battery supply center by 2045, the 36 nickel industrial parks under construction still need to add 12 gigawatts of coal-fired power generation capacity, which directly impacts their emission reduction commitments. The Institute for Energy Economics and Financial Analysis (IEEFA) has pointed out that if Indonesia fully complies with its climate commitments, the strategic cost of electric vehicles will increase by 47%, thereby losing its cost advantage over Chinese companies. The current situation of insufficient funds has intensified the questioning of fairness. Although developed countries have pledged to achieve $100 billion in climate financing annually by 2025, data from the Organisation for Economic Co operation and Development (OECD) shows that only $68.3 billion will actually be available in 2023, with only 12% going to the least developed countries. Indonesian Finance Minister Seri Mulyani revealed that 78% of the $3.1 billion climate financing received by the country is commercial loans that require guarantees, which is far from the expected grant ratio. This structural imbalance is giving rise to a "climate skepticism" alliance - emerging economies such as Brazil and South Africa jointly demand renegotiation of financing mechanisms at the G20 finance ministers' meeting.
In the competition for technological sovereignty, many countries have begun to explore the third path of energy transformation.
Faced with the dual challenges of climate commitments and economic development, many countries have begun to seek a middle ground. The government of Millais, Argentina is promoting a "shale gas first" strategy, planning to increase the production of the Vaca Muerta shale field from the current 600000 barrels of oil equivalent per day to 2 million barrels by 2027, and promising to allocate 20% of the oil and gas revenue to the research and development of carbon capture technology. This "emission first, treatment later" model has sparked fierce controversy in academia. The MIT Energy Initiative report warns that if multiple Latin American countries follow this model, an additional 12 billion tons of CO ₂ equivalent could be released by 2040. Indonesia is attempting to break through its predicament through a carbon credit mechanism. The new regulations of the Ministry of Environment and Forestry allow coal-fired power plants to obtain carbon offset credits by investing in tropical rainforest conservation projects, thereby theoretically extending the operating life of the power plants by 10-15 years. However, international carbon credit rating agency BeZero downgraded the rating of such projects from AA to BB, citing a "significant risk of leakage". More controversially, Indonesia is lobbying to include nickel smelting in the "strategic industry exemption clause" of the Paris Agreement. If the proposal is passed, it may open up institutional backdoors for high energy consuming industries.
As climate action shifts from scientific consensus to a game of interests, the global governance system is facing unprecedented pressure tests. The choices made by the United States, Argentina, and Indonesia reflect the structural contradiction between the declining emission reduction willingness of developed countries and the squeezed living space of developing countries. Whether a fair and ambitious new order can be established by 2025 will determine whether the Paris Agreement can become a life raft for human destiny or just an ideal declaration shattered by reality.