After road-testing a carbon cap-and-trade system modeled on Europe’s for the last two years, China may be concluding that it is too unreliable to adopt as national policy—dealing a disappointment to EU hopes for a common emissions trading market.
Yi Wang, a member of China’s National People’s Congress and influential vice-president of its Academy of Sciences, suggests the nation is leaning instead toward a carbon tax, Climate Home reports.
China’s EU-modeled emissions market pilot project is behind schedule, Yi told an audience in Brussels. The scheme has been challenged by “a cocktail of issues, including large regional differences, regulatory issues, data verification, market models, and management capacity,” the correspondent Arthur Neslen reports, citing Yi’s remarks.
After giving it emissions trading try, Yi told his audience, “I think we would employ a different measure to promote low-carbon development and reduce our greenhouse gas emissions. I would have another choice: a carbon tax.”
Europe’s eight-year-old emissions trading scheme has hardly been a runaway success. “Carbon prices have struggled to rise above €5 a tonne,” Climate Home notes, “due to waves of free allocations to heavy industry, intended to forestall their relocation abroad. The result has been a carbon price too low to trigger meaningful change.”
In light of that experience, “it is plain to everyone that a tax could be more effective than carbon trading,” commented Isabel Hilton, editor of the chinadialogue website. “When you look at everything that made it not work in the EU, you’ve got it in spades in China.”
The story cites unnamed EU officials, however, insisting they would be “surprised” if China didn’t follow through on discussions they said were ongoing on linking the two jurisdictions’ emissions trading markets.
Finance ministers from the U.S., China, Germany, and other G20 countries are signaling they may pull back from their countries’ financial pledges under the Paris agreement and try to hand the responsibility off to multilateral development banks.
The ministers’ shocking move is contained in a draft statement, obtained by Bloomberg, that represents “a significant departure from a communiqué issued in July, when finance ministers urged governments to quickly implement the Paris Agreement, including a call for wealthy nations to make good on commitments to mobilize US$100 billion annually to cut greenhouse gases around the globe,” the news agency reports.
“It basically says governments are irrelevant. It’s complete faith in the magic of the marketplace,” said John Kirton, director of the G-20 Research Group at the University of Toronto. “That is very different from the existing commitments they have repeatedly made.”
The 2017 statement “clearly puts less emphasis on climate finance as a priority than last year’s did,” agreed Union of Concerned Scientists Policy Director Alden Meyer. “It doesn’t talk about government action. That is a significant step back from what countries agreed to in Paris.”
Just in the last month, the G20 nations were said to be ready to confront the new U.S. administration on climate, as private investors with more than US$2.8 trillion under management urged the governments to phase out their fossil fuel subsidies by 2020. The ministers’ statement sets a 2025 target date for that process.
But now, a “shift in tone” is in the air as newly-installed U.S. Treasury Secretary Steven Mnuchin, known back home as the “Foreclosure King” for his role in last decade’s U.S. housing crash, prepares to attend the ministers’ meeting in Baden-Baden March 17-18. The difference is partly a matter of what’s stated in the draft communiqué, partly about what’s left unsaid.
“The statement issued after the G-20 finance ministers and central bank governors meeting in July dedicated 163 words to the Paris Agreement, pushing nations to bring the deal into force, meet emissions targets, and fulfill financial pledges,” Bloomberg notes. “This current draft dedicates just 47 words to the agreement, focusing exclusively on development banks raising private funds, without mentioning government financial support.”
Germany, as this year’s G20 chair, led drafting of the document, and Chancellor Angela Merkel is a strong advocate for climate action. So “the most charitable thing to say is they’re waiting to see where Donald Trump actually lands by the time they get in Hamburg and thus, doing nothing to annoy the incoming American Treasury Secretary,” The U of T’s Kirton told Bloomberg.
Last week’s visit to Ottawa by European Climate Commissioner Miguel Arias Cañete was part of a wider diplomatic push to bolster the Paris agreement, echoing the EU diplomatic surge the preceded the 2015 conference that concluded that landmark global climate deal.
As several reports described a Trump White House fiercely divided over whether to withdraw from the Paris accord, EU foreign ministers say they will step up their support for the 2015 agreement. The EU joins an increasingly crowded field of candidates for the mantle of global climate leadership the United States appears ready to cast off.
“European foreign ministers agreed to raise climate risk awareness among partners and aid developing countries in gaining access to sustainable energy,” Reuters reports via CNBC. The European ministers nodded—diplomatically—to “the latest developments and changing geopolitical landscape” that had prompted them to “reinvigorate EU climate diplomacy.”
“We are positioning our diplomats in the EU delegations and embassies to do an aggressive outreach so that the Paris agreement be implemented and saved,” the agency quoted an EU official as saying.
The assertive statement follows EU climate commissioner Miguel Arias Cañete’s visit to Canada last week. While here, he urged this country to help Europe fill “a vacuum of leadership in climate change policy.” The EU commissioner will also take his message to Iran, India, and China.
China, in particular, is well positioned to seize the opportunity provided by America’s political distraction with the competence and legitimacy of its own president. China was swift to assert its global climate leadership after Trump gained his narrow Electoral College win. Second-term President Xi Jinping is believed to see climate action as part of his political legacy. And the country’s world-leading investments in renewable infrastructure back up the perception.
A lucrative trade in oil and gas appears to be at the heart of a series of geopolitical moves in the Indian Ocean by Saudi Arabia and China. And much of the action centres on the Maldives, one of the small island states on the front lines of climate change, according to an in-depth report published yesterday on Climate Home.
The story begins with efforts by Saudi Arabia “to secure oil trade routes to east Asia through a multi-billion-dollar investment in a Maldives atoll,” write editor Karl Mathiesen and reporter Megan Darby, citing interviews with foreign policy specialists and ex-Maldives president Mohamed Nasheed, now in exile in London, UK.
Climate Home describes the atoll in question, Faafu, as “a collection of 19 low-lying islands 120 kilometres south of the capital Malé and home to 4,000 people.” Recently, Faafu has been the subject of unconfirmed reports of a Saudi purchase. “President Abdulla Yameen Abdul Gayoom has denied the entire atoll will be sold to the Saudis, but said plans for a ‘megaproject’ worth US$10 billion—three times his country’s GDP—would be disclosed ‘once the negotiation process was completed,’” the specialist news outlet notes.
The deal puts the Maldives at the epicentre of Saudi national interest, a possible military expansion by China, and both countries’ interest in safe, secure oil shipments.
“The economic future of the Saudi petro-kingdom is bound to the sale of oil, gas, and other goods to China,” Mathiesen and Darby write. “The supply lines for that trade run through the Indian Ocean, where terror is a growing concern and vessels are shadowed by piracy.”
But the shipments also pass by the Maldives, a tiny country with a “growing Wahhabist majority and autocratic government,” where “the Saudis have found—or, according to the Maldivian opposition, created—a pliant ally where few questions are asked and fewer are allowed.”
Nasheed said it was “disturbing” to see Faafu put up for sale with no public tender. “[The Saudis] want to have a base in the Maldives that would safeguard the trade routes, their oil routes, to their new markets,” he told Mathiesen. “To have strategic installations, infrastructure.” He added that a “cultural campaign” supported by the Saud dynasty had fueled the spread of Wahhabism in the island state, setting the stage for an “unprecedented” land grab.
The Saudis “have had a good run of propagating their worldview to the people of the Maldives and they’ve done that for the last three decades,” he added. “They’ve now, I think, come to view that they have enough sympathy for them to get a foothold.”
Housing Minister Mohamed Muizzu told a news conference in Malé that he hoped to see a big investment. “We don’t want to move slowly,” he said. “We want transformational change. That is the whole mentality of this government. We want to bring better living conditions to this country on a large scale, in a small period of time.”
But Opposition MP Eva Abdulla was skeptical. “With Faafu or any other project, we are told there will be a trickle-down effect,” she told Climate Home. “That is not what we have seen. It is government MPs and their cronies who get all the benefits.”
The other part of the story is China’s growing role in financing infrastructure in the Maldives, including a “Friendship Bridge” connecting Malé to its airport island and a new port on Laamu atoll, south of Faafu. China now holds 70% of the Maldives’ foreign debt, and Chatham House associate fellow Cleo Paskal believes China sees Saudi Arabia’s Faafu deal as an opening to extend its own military footprint.
“China is on record as wanting a base in the Maldives,” she told Climate Home. “It was a big issue in 2015. It already has or is working on ‘commercial’ ports in several countries along the route from the Indian Ocean to China and recently opened an overtly military naval base in Djibouti. Saudis are unlikely to build anything like that for themselves, but may facilitate the construction of some sort of ‘resupply’ installation built by China that would likely have dual use capacity.”
But Ankit Panda, senior editor of The Diplomat, said the longer strategic view may be coming from the Maldives itself. “The geopolitical layer to this, in my view, is more on the Maldivian side for now,” he said. “The Saudis are looking primarily for a strategic investment opportunity,” but the Maldives “understands its strategic location in the Indian Ocean and sees a Saudi outpost there potentially paying dividends in the future.”
Climate Home points to the irony of a strategic oil and gas deal involving this particular small island state. “The employment of the Maldives as a strategic anchor for future oil trade rubs against the country’s vulnerability to climate change,” Mathiesen and Darby write. “It is the lowest-lying country on earth, with a high point of just 2.4 metres, meaning even small rises in sea level could be devastating.”
In a bid to curb urban smog, China has unveiled plans to replace all 67,000 of Beijing’s internal combustion taxis with electric vehicles, at an estimated cost of US$1.3 billion for taxi operators.
“The changeover won’t happen right away,” CleanTechnica reports. “It begins with a mandate that any new taxis placed in service must be electric, but that means it could be a decade or more before all older vehicles are replaced.”
The announcement is the latest response to air pollution levels that are causing up to 4,000 premature deaths per day across the country, according to a 2015 study. “China is paying the price for its rapid economic expansion, most of which has been powered by electricity generated in coal-fired facilities,” CleanTechnica notes. “During the recent Olympic games in Beijing, it ordered many factories to shut down for weeks and banned buses and vehicles from its streets. The plan worked, as millions of Beijing residents saw the sun for the first time in months, but it came at a huge economic cost.”
The climate benefits of the policy will depend on continuing shifts in China’s electricity supply mix—since an electric vehicle powered by fossil generation helps clear the city air, but still pumps greenhouse gases into the atmosphere. CleanTechnica also points to the need for an EV charging network in a city where electric taxi drivers often have to wait hours for access.
“There are 200 electric taxis on the streets of Tongzhou in Beijing, but only about 100 are on the road, while the other 100 are waiting to be charged,” one driver told a local business newspaper.
China is forecasting a fourth straight year of stable or declining carbon dioxide emissions, solidifying the country’s position as a global climate change leader as the new White House administration moves to slash U.S. climate programming.
The 2017 plan recently released by China’s National Energy Administration anticipates a 1% emissions cut, and shows a 1.3% reduction in coal consumption for 2016, according to analysis by Greenpeace East Asia.
“The encouraging news reinforces China’s growing status as a global climate leader, and sends a strong signal to U.S. President Trump that his dirty energy agenda will send the American economy in the wrong direction as the rest of the world moves forward,” Greenpeace declared yesterday in a media release.
“China is ploughing money into renewables and reining in its addiction to coal. As Trump’s rhetoric leaves the world in doubt over what his plan is to tackle climate change, China is being thrust into a leadership role,” said Global Policy Advisor Li Shuo.
“These trends give some hope that the global peak in emissions might well be within reach, but only if all major emitters break free from fossil fuels and reduce emissions.”
“While the Trump administration proposes huge cuts to federal climate change programs and vows to ‘cancel Paris’, the majority of the people in the United States want action on climate change,” added Greenpeace USA Executive Director Annie Leonard.
“Trump would know this basic fact if he listened to anyone but the last fossil fuel executive he dined with at Mar-a-Lago, or if he listened to facts at all. The United States Congress has to listen to what the people want and stop our delusional president from sabotaging global progress on the most urgent issue facing the human species.”
In a post on EcoWatch, meanwhile, NRDC International Program Director Jake Schmidt identifies China as one of six countries that are leading the global boom in renewable energy adoption. “
At the end of 2016, India “had installed 11 gigawatts of solar and 29 gigawatts of wind capacity, moving significantly closer to its goals of 100 gigawatts of solar and 75 gigawatts of wind by 2022,” he notes. Latin America, meanwhile, “has recently proven itself to be a regional powerhouse in clean energy.” Chile and Mexico set record-low prices in recent renewable energy auctions, he writes, while Chile, Brazil, and Uruguay placed among the top five developing countries for clean energy.
China has set a five-year deadline to develop a floating platform for 60-MW nuclear reactors to power oil and gas exploration in the South China Sea, according to People’s Daily Online.
The country’s offshore operations, along with residents of Nansha and Xisha Islands, currently depend on diesel electricity, The Hindu reports. Those islands “are at the heart of a maritime dispute among China, Vietnam, Philippines, Malaysia, Taiwan, and Brunei.”
Deployment of the Small Modular Reactors (SMRs) would make China the first country to use floating nuclear power plants.
China, with 36 nuclear plants in operation and another 21 under construction, “is rapidly developing its nuclear industry after drawing lessons from the 2011 Fukushima nuclear disaster in Japan,” The Hindu notes. “It has introduced a full range of nuclear emergency precautions, including the publication of a nuclear safety white paper in January 2016.”
While the keystone power of the western hemisphere retreats into an isolationist stance, the rising power of the east is reaching out—literally as well as figuratively—to plan joint, renewable-friendly, continental-scale electricity grids with regional neighbours.
“The key to promoting energy transition in Asia lies in the massive development opportunity to develop and distribute clean energy,” Liu Zhenya, chair of China’s state-backed Global Energy Interconnection Development and Cooperation (GEIDCO), told a meeting of the UN Economic and Social Commission for Asia and the Pacific (ESCAP) in Bangkok last month. The event brought together policy-makers from more than 30 mainly Asian countries.
Liu offered a vision of renewable and zero-carbon energy scaled up across Asia, balanced and distributed across regional transmission and distribution networks that ignore borders. He described his idea for a Global Energy Interconnection, “a platform to create a new energy development pattern and connected infrastructure, to deliver energy via transboundary power grids for sale to other countries,” the Bangkok Post reports.
Year-old GEIDCO, the Post states, “plans to create a series of trans-border energy grids linking renewable energy projects in China with other power generators in the region.” To date, grid weaknesses have hobbled the nation’s massive expansion of renewable generation, preventing its clean power from reaching customers.
Not all of the power travelling the envisioned transnational mega-grids will be clean, however. “Electricity is expected to come from hydropower dams on rivers in Yunnan, thermal, coal-fired, wind, and solar projects in Xinjiang, hydroelectric dams in Tibet, and a coal-fired power plant in Kazakhstan,” the Post notes.
China has “already signed memoranda of understanding for power interconnections with companies in South Korea, Japan, and Russia,” the Bangkok outlet reports. Russia appears especially enthusiastic about what it calls an “energy super ring” integrating the grids of eastern Russia, Japan, South Korea, China, and Mongolia.
“ASEAN, South Asia, and Central Asia as well as China, Russia, and Mongolia are already embracing cross-border energy connectivity,” ESCAP Under-Secretary-General Shamshad Akhtar commented. Cross-border grid interconnections already under construction, she added, “will allow low-carbon energy from gas, hydropower, solar, and wind to be traded across borders.”