Clash of the Titans
6 minute read
On 22nd April 2021, Earth Day, President Biden hosted a virtual climate summit of 40 world leaders which signalled that the US was very much back in the game of global climate leadership.
This was an important milestone in the run up to COP26 in November where many countries – the US, the UK and even Brazil (but not Russia, China or India) upped their Nationally Determined Contributions (NDCs) – their commitments to reducing carbon emissions.
President Biden announced that the US will reduce its emission by 50-52%, compared to 2005 levels by 2030, effectively doubling its previous pledge. Boris confirmed that the UK will accept the Climate Change Committee’s sixth carbon budget which, when enshrined in law in June 2021, will commit the Government to reduce emissions by 78% by 2035, versus 1990 levels.
This will be hard. Even with all the craziness of last year, carbon emissions only fell roughly between 4 and 5%. That’s because we simply stopped doing some (well, quite a lot of) things. There was no structural change. To meet the Paris Agreement and keep temperatures to no more than 1.5 degrees above pre-industrial levels, we need to be hitting annual emissions reductions of 7%! Oh, and we have already rebounded back to above 2019 levels (without large swathes of the world economy reopening yet!). The challenge ahead is huge.
The importance of the US’s return to climate leadership cannot be overerstated; but it has a serious credibility issue. Even before Trump withdrew from the Paris agreement, President Clinton wasn’t able to get the Kyoto protocol through the Senate; and they have failed to make good on billions of dollars of aid promised to developing countries battling the effects of climate change.
They must walk their own talk before others will listen. This too will be a huge challenge, but it is possible. Should it pass as a bill, Biden's Infrastructure proposal would represent the single largest green legislation in US history! It would see a significant shift in energy policy and create millions of new green jobs. But given that 95% of the emissions that need to be cut to keep to the Paris Agreement will be generated outside of the US, the role they must play to encourage and catalyse other countries’ low-carbon transitions is arguably a degree of magnitude more important.
A lot of this will hinge on the US’s “it’s complicated” relationship with China. John Kerry, the Special Presidential Envoy for Climate, has recently been saying that climate must be treated as a “standalone issue” – the climate crisis is too big and important to let (for example) sanctions linked to human rights abuses in Xinjiang, or disputes over intellectual property, freeze over US/China relations. All big emitters, autocracy’s or not, must be on the same side in this fight. Simple in principle, but alas, the climate crisis is so big and complex and interwoven into so much of geopolitics, it is impossible to treat it as a standalone issue. But that might not be such a bad thing.
Collaboration between the two super-polluters will of course be vital, and initial words at a recent round table, agreeing on specific actions to reduce emissions, do sound positive. Reopening B2B channels and scientific collaboration, blockaded by Trump, will also be important.
But China and the US are fiercely competitive. In trade. In technology. And in their interests abroad. This is what I am going to focus on, as this competition can be harnessed for the good of the world.
In a recent speech, Secretary of State Antony Blinken said:
“it’s difficult to imagine the US winning the long term strategic competition with China if we cannot lead the renewable energy revolution. Right now we are falling behind”
And he’s right. China leads the world in solar PV and battery technologies by some distance. It was an obvious bet. As the world decarbonises it will come to rely more and more on China. The world, and in particular the US and Europe must provide a credible challenge to this; the good news is that there is plenty of scope.
The International Energy Agency estimates that half of the cumulative emissions reductions needed to reach net zero by 2050 will come from technologies that are not yet commercially available – Carbon Capture, Utilisation and Storage (CCUS) and Hydrogen technologies immediately spring to mind. Investing in R&D to bring these technologies to commercial scale is a big opportunity for the West to keep up with China. So too is driving down the so-called “green premium”. Construction of coal power plants across the emerging world, part of China’s Belt and Road initiative, is strategically extending its soft power. Developing countries are not to blame. They are not responsible for the vast majority of historic carbon emission and they want to develop and grow. They need to be given green alternatives that are at least no more expensive.
The West must invest and innovate to drive down the costs of producing cement and steel in scalable low-carbon ways, decarbonise global shipping and aviation and turn commercial agriculture on its head. It’s the least it can do for (quite literally) burning through the planet’s carbon budget over the past five decades in the name of economic growth. It risks a double whammy of losing geopolitical influence and missing the Paris target if it does not.