Withdrawing from the pact was one of Mr. Trump's principal campaign pledges, but America's allies have expressed alarm about the likely consequences of the USA abandoning the pact.
At the White House, the behind-the-scenes debate about whether to stay in Paris or bolt was an intense one that dragged on for weeks. That means the USA would remain in the agreement, at least formally, for another three-and-a-half years, ensuring the issue remains alive in the next presidential election. "The Paris accord is very unfair at the highest level to the United States".
While reporting in recent days has suggested Trump his made up his mind to withdraw from the deal, he had seemed undecided on the issue, reflecting a divide among his closest aides.
In a speech on his decision that recalled the nationalistic rhetoric of his presidential campaign speeches, Mr Trump said his job was to represent the "citizens of Pittsburgh, not Paris", claiming that the agreement signed by his predecessor Barack Obama would cost the U.S. economy almost $3 trillion over several decades and 2.7 million jobs. The U.S. will join just two other United Nations member countries that haven't signed on: Syria and Nicaragua.
Trump's reported decision has been criticised by former secretary of state Hillary Clinton, who said withdrawing from the agreement would impact of America's global standing.
The uncertainty over Trump's decision has lent the Paris announcement a reality show-like air, with Thursday's unveiling a finale to a months-long debate that has split members of the President's inner circle and led to deep consternation from global allies.
The Paris Agreement commits signatories to efforts to reduce greenhouse gas emissions that cause global warming, which is blamed for melting ice caps and glaciers, rising sea levels and more violent weather events.
Still, the fact that the world managed to agree on a target was celebrated as a diplomatic achievement, one multiple world leaders have emphasized as crucial to support.
"The nations that remain in the Paris Agreement will be the nations that reap the benefits in jobs and industries created", Obama said.
Norway's largest pension fund with 53 billion euro ($59.5 billion) in assets under its management said it would also continue to invest in renewable energy despite the American president's decision, saying in a statement that "Donald Trump is jumping off a train that has already left the station". USA utility giants including Duke Energy Corp.
Abandoning the pact would isolate the US from a raft of worldwide allies who spent years negotiating the 2015 agreement to fight global warming and pollution by reducing carbon emissions. "It's the relative cost of coal and gas that will have the greatest impact on USA carbon emissions". Withdrawing from the Paris accord may be the clearest sign that Trump is not just retreating from decades of American leadership on the global stage, but that he is actually making the United States a force for bad and for wrong in the world.
But House Democratic leader Nancy Pelosi of California called it "a stunning abdication of American leadership and a grave threat to our planet's future". His group wrote letters to the White House and spoke to senior staff about the deal.
But Trump still appears to be siding with Bannon and his allies, and the chief strategist might be able to count this as a victory for his nationalistic method of governing. During Trump's speech, the faint sounds of protesters could be heard in the distance banging drums.
Trump administration officials lobbying the president to drop the deal have echoed a similar sentiment. According to Politico, Ivanka Trump was out of the office for the Jewish holiday Shavuot, while Kushner had come in for a meeting.
The EU also wants an investment treaty with China to open the huge Chinese market to European companies and remove onerous rules forcing them to share know-how. Trump promised to stop implementation of the "non-binding" parts of the deal immediately. But market forces will continue to squeeze carbon dioxide out of the US power mix as generators replace costly and aging coal-fired units with cheaper, cleaner-burning natural gas ones, according to William Nelson, an analyst at Bloomberg New Energy Finance.
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