The real story behind Trump's claim that Paris would kill 2.7 million jobs

Debunking Trump's economic claims on climate change
Debunking Trump's economic claims on climate change

Massive job losses. Lower wages. Shuttered factories. Brownouts and blackouts.

That's the grim future that President Trump said he was trying to avoid when he announced that the United States will withdraw from the Paris climate change deal.

"Compliance with the terms of the Paris Accord and the onerous energy restrictions it has placed on the United States could cost America as much as 2.7 million lost jobs by 2025," he said, citing a study from NERA Economic Consultants.

NERA is a well known economic research firm that is part of Marsh & McLennan, an insurance brokerage and risk management firm.

The study was done on behalf of a conservative public interest group, the the American Council for Capital Formation.

But the author of the study says the conclusions of the report are its own, and were not dictated by the sponsor.

"We never rely on [sponsors] to say what the results will be," said Sugandha Tuladhar, the study's primary author.

Related: Top CEOs tell the CEO president - You're wrong on Paris

NERA's study looked at a variety of scenarios. Trump cited what the report calls the most likely outcome, which was the one that would hurt the economy the most.

For example, according to the report's best-case scenario, the Paris Treaty would wipe out 12,000 manufacturing jobs by 2025 along with 2.3 million jobs overall. Trump had cited the worst outlook -- a loss of 440,000 and 2.7 million overall.

The NERA study doesn't say anything about widespread blackouts and brownouts that would shut down factories.

Related: Trump takes credit for 1 million jobs. Not true

Trump's view of what the Paris deal would cost is in stark contrast to that of many major business leaders. They argue that the economy will be hurt by Trump's decision. Many leading CEOs voiced disappointment.

Environmental experts also say the NERA study overestimates how much it will cost to cut carbon emissions.

The problem, these critics argue, is that the study assumes that efforts to cut emissions would fall almost exclusively on heavy industry, such as autos, chemicals, iron and steel and petroleum.

"Those are expensive sectors to get the emissions reductions." said Marc Hafstead, a fellow at Resources for the Future, a think tank that concentrates on energy issues. "There are costs to reducing emissions. And there will be winners and losers. But when those costs are distributed equally, there's a lot less job losses."

Hafstead conducted his own study, which found that the Paris deal wouldn't cause much of a net change in jobs, since losses in sectors such as coal would be balanced by job gains in alternative energy.

"The NERA study grossly overstates the changes in output and jobs in heavy industry," he said.

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