While the world is still processing and assimilating the surprise of Donald Trump as the new US president, newspapers around the world are beginning to wonder what will become of the Paris Agreement on climate change, ratified on November 4 of this year, the week before the US elections.

The thing is that, throughout his history, the elected candidate has openly expressed his intention of not ratifying the commitment by the United States, if elected to the highest executive position.

His statements have become so significant that on September 20 of this year, 376 members of the National Academy of Sciences of that country, 30 of whom have been awarded the Nobel Prize, published an open letter to warn of the consequences of not adhering to the Paris Agreement , and as a response to Trump's statements.

To leave no room for doubt, the third paragraph of the open letter signed by the Responsible Scientist group states: “During the presidential primary campaign, it was claimed that the Earth is not warming, or that warming is due to purely natural causes beyond human control. Such claims are inconsistent with reality.”

As can be seen in the graph below, the trend in carbon dioxide (CO2) emissions into the atmosphere over the last 50 years shows a continuous increase. This is explained not only by population growth (in fact, the graph does not account for this effect) but also by the intensity of energy use and the relatively recent incorporation of coal-based energy sources, primarily promoted by countries in the Asia-Pacific region, especially China.

In this regard, the promotion and implementation of renewable energies within countries' energy mix is ​​one of the partial solutions being implemented to mitigate the problem of climate change . However, as will be seen in our report, these measures are insufficient.

The fact is that the edges of the problem are enormous. First, there is consensus in the scientific community that human-driven global warming is indeed a problem. However, the conclusions are still resisted by various sectors, who argue - on the contrary - that we are not dealing with a problem, but rather a myth or an exaggeration.

In relation to the above, reducing CO2 emissions by meeting targets has short-term consequences for national economies, which can translate into a slower rate of economic growth . In other words, the long-term solution becomes a short-term disincentive for any ruling party seeking to remain in power, regardless of its ideology.

From this perspective, the Paris Agreement emerges as an institutional solution that, among other objectives, contributes to reducing this disincentive, by converting the policy of reducing greenhouse gas emissions into a shared state policy. But the above leads to a new problem: coordination.

In game theory, coordination failures occur when the non-cooperative interaction of two or more agents leads to a non-Pareto optimal outcome. In this context, the term "non-cooperative" refers to the fact that the interaction is not entirely governed by a binding agreement. A Pareto optimal outcome, on the other hand, is one in which at least one of the agents would not prefer any other feasible outcome and would be preferred by at least every other agent.

Indeed, the temptation for a country to act as a free-rider is high: it accumulates the climate benefits derived from other countries' CO2 reductions while increasing its own activity levels, based on polluting (but less costly in accounting terms) energy sources. The coordination problem arises because no country is immune to this assumption and to acting accordingly. Furthermore, neither treaty establishes a framework for sanctioning signatory countries for failing to meet their targets. Thus, for the time being, everything remains subject to the commitment and unilateral will of the parties involved.

Having outlined the challenges of the current situation, we invite you to read our report on renewable energy . Unlike this article, the report does not address current political issues, but rather provides an overview of the sector and its potential.

Thus, in the first section, the advances of these sources worldwide and the reasons for their growth are detailed; showing which are the most used generation sources worldwide, what resources are needed to take advantage of them and what policies have been used to promote renewable energies, and how they are justified from economic theory. On the other hand, in the second section, the current state of the sector in Argentina is explained, the conditions that limited its growth in recent decades and its prospects for future development.