Donald Trump’s decision to withdraw the US from the 2015 Paris Agreement to reduce emissions and combat climate change sends the wrong signal to the world and could hand its competitors an upper hand in the clean energy race, experts have said.
It was an anticipated step by Mr Trump that comes despite heat records being shattered and scientists warning of more extreme weather events.
Market watchers have said that progress to tackle climate change will continue – although at a slower pace in the US.
Speaking to The National, Thomas Hohne-Sparborth, head of Sustainability Research, Lombard Odier Investment Managers, said that during Mr Trump's last administration, the energy transition continued despite a withdrawal from the Paris Agreement. “The cost of solar continued to fall, we had the quintupling of the number of electric vehicles on the road in the US,” Mr Hohne-Sparborth said.
The move, according to Karim Elgendy, climate expert and associate fellow at British think tank, Chatham House, “marks a dramatic reversal in US climate policy and an abdication of its global responsibility”.
“While the US currently accounts for 13 per cent of annual emissions, its historical emissions represent a quarter of accumulated atmospheric carbon from human activity to date. This weakens the United States' global standing and sends the wrong signals for some policymakers in developing countries that remained on the fence regarding climate commitments.”
Steven Okun, a member of former president Bill Clinton's administration and now chief executive of APAC Advisors, said the climate crisis would worsen regardless of Mr Trump’s decision “with devastating consequences for the environment, human rights and global stability”.
“The world will witness more frequent and severe extreme weather events, rising sea levels, economic disruption and melting of polar ice caps and glaciers,” Mr Okun told The National. “The US not being a party to the Paris Agreement will make this more challenging.”
Daniel Murray, deputy chief information officer and global head of research at Swiss private bank EFG International, told The National it was a “major setback for the climate change community”.
“It could encourage other countries to follow suit and will make it much more difficult for the targeted temperature change limits to be met, not least because the US ranks second behind only China in the world ranking of greenhouse gas emissions by country.”
It also potentially creates additional costs for businesses that might have to follow different rules and regulations dependent in which part of the world they are located.
Second time around
It is the second time Mr Trump has withdrawn America from the deal – to limit global temperature increases to 1.5ºC on pre-industrial levels – first in 2017 before Mr Biden rejoined.
“Every fraction of a degree matters,” Moustafa Bayoumi, climate change research fellow at the Anwar Gargash Diplomatic Academy in Abu Dhabi, told The National. “The world is not on track to keep the 1.5ºC target so this could make it even harder.”
Mr Bayoumi said it could slow US emissions cuts and lead to reduced funding for entities that tackle environmental issues. He said countries in the Middle East and other regions could be hit by climate finance cuts, while China and EU could play a bigger role globally. “The energy transition will happen but the pace could be affected,” he said. “It is quite worrying.”
However, coalitions of US states, cities and businesses that formed when Mr Trump pulled the US out the first time are making fresh commitments to shore up efforts to tackle climate change. “They still exist, are active and reiterating they will uphold targets,” Mr Bayoumi said. “For them nothing has changed.”
World has moved on
Analysis by the UK-based climate specialist website, Carbon Brief, has found that Mr Trump's second term could add four billion tonnes to US emissions by 2030 – equivalent to the combined annual emissions of the EU and Japan.
However, experts also said that the world is in a different place to 2017 when Mr Trump began his first term. Since then, countries have increased the clean energy transition with the International Energy Agency now forecasting the global market for such technologies to triple to more than $2 trillion by 2035. This is driven not so much through altruistic reasons but a desire for energy security and to develop future industries.
Mr Elgendy said the transition appears to have passed an “irreversible tipping point” that is being driven by increasing investments and declining costs in solar technology rather than policy commitments. “Solar photovoltaic costs have fallen by 15 per cent per cent annually between 2010 to 2020 and are set to become the cheapest source of electricity in 2027 in all but eight countries,” he said. “This technological and economic momentum exists independently of climate policies.”
Climate Analytics, a climate science and policy institute in Berlin, on Tuesday said Mr Trump’s decision could boost US competitors such as China and Europe in clean energy and technology. “Not only is US global leadership damaged but more significantly is its clean tech industry's competitive position in a growing global market, currently dominated by China,” said Mr Elgendy.
Will the US still attend climate talks?
The next annual climate gathering, Cop30, takes place in Brazil, but the US is still expected to take part in what is seen as a crucial meeting to stave off the worst effects of climate change. “What happens in those rooms does affect them,” said Mr Bayoumi. “They will not have the same obligations but they will definitely participate in the negotiations.”
Experts previously warned of much graver consequences should the US withdraw from the UN Framework Convention on Climate Change. Still, Mr Okun said governments and citizens across the world will “continue demanding climate action and sustainability” from businesses and investors. However, he cautioned that there could be more of a focus on climate adaptation and “less so on climate mitigation”. Adaptation refers to ways to deal with climate change such as building sea walls or using water more efficiently while mitigation refers to emissions cuts.
“Expect to see greater investment and focus on the former. The planet will only getting more dangerous as a result.”
'The door remains open'
Still, about half of Americans “somewhat” or “strongly” oppose US action to withdraw from the climate accord, according to a poll from the Associated Press-NORC Centre for Public Affairs Research. And even Mr Trump's Republicans are not overwhelmingly in favour. The move also comes after deadly fires in Los Angeles devastated large part parts of the city that scientists suggested climate change exacerbated.
Mr Murray predicted an increase in climate-related events, with a knock-on impact on the global insurance industry. “The recent Californian fires put this in sharp focus,” he said. Simon Stiell, the UN's climate chief on Tuesday, meanwhile, said embracing the global clean energy boom will mean “massive profits, millions of manufacturing jobs and clean air”.
“Ignoring it only sends all that vast wealth to competitor economies, while climate disasters like droughts, wildfires and superstorms keep getting worse, destroying property and businesses, hitting nationwide food production, and driving economywide price inflation,” said Mr Stiell in remarks carried by Reuters. “The door remains open to the Paris Agreement and we welcome constructive engagement from any and all countries.”
Donald Trump's first day back in office – in pictures
What is Reform?
Reform is a right-wing, populist party led by Nigel Farage, a former MEP who won a seat in the House of Commons last year at his eighth attempt and a prominent figure in the campaign for the UK to leave the European Union.
It was founded in 2018 and originally called the Brexit Party.
Many of its members previously belonged to UKIP or the mainstream Conservatives.
After Brexit took place, the party focused on the reformation of British democracy.
Former Tory deputy chairman Lee Anderson became its first MP after defecting in March 2024.
The party gained support from Elon Musk, and had hoped the tech billionaire would make a £100m donation. However, Mr Musk changed his mind and called for Mr Farage to step down as leader in a row involving the US tycoon's support for far-right figurehead Tommy Robinson who is in prison for contempt of court.
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Rating: 3/5
What vitamins do we know are beneficial for living in the UAE
Vitamin D: Highly relevant in the UAE due to limited sun exposure; supports bone health, immunity and mood.
Vitamin B12: Important for nerve health and energy production, especially for vegetarians, vegans and individuals with absorption issues.
Iron: Useful only when deficiency or anaemia is confirmed; helps reduce fatigue and support immunity.
Omega-3 (EPA/DHA): Supports heart health and reduces inflammation, especially for those who consume little fish.
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Real estate tokenisation project
Dubai launched the pilot phase of its real estate tokenisation project last month.
The initiative focuses on converting real estate assets into digital tokens recorded on blockchain technology and helps in streamlining the process of buying, selling and investing, the Dubai Land Department said.
Dubai’s real estate tokenisation market is projected to reach Dh60 billion ($16.33 billion) by 2033, representing 7 per cent of the emirate’s total property transactions, according to the DLD.
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Publisher: EA Sports
Consoles: PC, PlayStation 4/5, Xbox Series X/S
Rating: 3/5
White hydrogen: Naturally occurring hydrogen
Chromite: Hard, metallic mineral containing iron oxide and chromium oxide
Ultramafic rocks: Dark-coloured rocks rich in magnesium or iron with very low silica content
Ophiolite: A section of the earth’s crust, which is oceanic in nature that has since been uplifted and exposed on land
Olivine: A commonly occurring magnesium iron silicate mineral that derives its name for its olive-green yellow-green colour
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
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Company profile
Date started: Founded in May 2017 and operational since April 2018
Founders: co-founder and chief executive, Doaa Aref; Dr Rasha Rady, co-founder and chief operating officer.
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Investors: Flat6labs, 500 Falcons, three angel investors
Why it pays to compare
A comparison of sending Dh20,000 from the UAE using two different routes at the same time - the first direct from a UAE bank to a bank in Germany, and the second from the same UAE bank via an online platform to Germany - found key differences in cost and speed. The transfers were both initiated on January 30.
Route 1: bank transfer
The UAE bank charged Dh152.25 for the Dh20,000 transfer. On top of that, their exchange rate margin added a difference of around Dh415, compared with the mid-market rate.
Total cost: Dh567.25 - around 2.9 per cent of the total amount
Total received: €4,670.30
Route 2: online platform
The UAE bank’s charge for sending Dh20,000 to a UK dirham-denominated account was Dh2.10. The exchange rate margin cost was Dh60, plus a Dh12 fee.
Total cost: Dh74.10, around 0.4 per cent of the transaction
Total received: €4,756
The UAE bank transfer was far quicker – around two to three working days, while the online platform took around four to five days, but was considerably cheaper. In the online platform transfer, the funds were also exposed to currency risk during the period it took for them to arrive.
Three ways to boost your credit score
Marwan Lutfi says the core fundamentals that drive better payment behaviour and can improve your credit score are:
1. Make sure you make your payments on time;
2. Limit the number of products you borrow on: the more loans and credit cards you have, the more it will affect your credit score;
3. Don't max out all your debts: how much you maximise those credit facilities will have an impact. If you have five credit cards and utilise 90 per cent of that credit, it will negatively affect your score.
