12:27 GMT +317 July 2019
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    US-China Climate Change Deal Major Breakthrough?

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    John Harrison
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    The battle to deliver the world from the ravages of climate change when the US and China agreed on a far-reaching plan to reduce emissions, or so it seems. Ethan Zindler, head of Bloomberg’s Americas department joins the programme to discuss the deal.

    The US and China together account for 44 per cent of the world’s CO2 emissions, without their participation in programmes to reduce pollution, the world simply cannot meet its self-imposed targets to reduce global warming. Under this deal, the US has signed up to concrete commitments, and China has promised to do the same. However it is not certain that the new regulations will become law in the US, and even less so in China.

    What exactly has the US signed up for?

    Ethan Zindler: The US had already made a commitment to try and reduce its emissions by 17% by 2020. And that’s against the baseline of 2005 emissions levels. Now the President has announced that the country will cut its emissions by what is described as 26-28% by 2025.

    What about China? We have had a lot of climate change promises from China in the past, what is so different about these promises?

    Ethan Zindler: The major headline out of China is that the Chinese have for the first time agreed at some future day to actually have their total amount of emissions stop rising on a year to year basis. And that in the grand scheme of things may not sound like a huge deal, but it is, because in the past the Chinese have simply been only willing to agree to allow their emissions to rise at certain lower percentage rates per years, but not have them actually reach a peak and start to decline. And so, that is the major change here.

    In terms of when that might occur, the promise is that it will happen sometime “around 2030”. So, we will have to see what exactly that means.

    Okay, it sounds as though the US has sort of committed itself to some pretty tough targets here and you are going to, probably, suffer a little bit to achieve those. But you are going to do it. As far as China goes, it sounds to me as though China said – okay, we agree, we are going to cap our emissions by 2030 – but in the meantime the Chinese emissions are still shooting up. They are not staying still, are they? Don’t you think it is a bit kind of biased in the favour of China?

    Ethan Zindler: I guess a couple of things. First, I don’t necessarily view it in such negative terms, in the sense that meeting these goals by definition requires a very high and negative cost to an economy. I mean, first of all, the kinds of technologies that our firm tracks in clean energy, the prices for wind and particularly for solar have dropped very dramatically. And in the number of parts of the world, including a number of parts in the US, the lowest cost option for replacing the existing coal plant is a renewable source of generation. So, it is not by definition an economic sacrifice to try and comply with the CO2 emissions limit. That’s the first thing.

    The second is that China itself has been moving very quickly and, perhaps, a little more quietly than people know to try to add a lot more renewables and a lot less coal. So, for instance, last year China did its typical massive addition of about 100 gigawatts of capacity. And to put that into context – France’s total capacity is about 150 gigawatts or so. So, they added 100 last year in China and out of that hundred, the majority of that with zero carbon emissions. It was not coal. So, the point is that the Chinese have already fairly substantially tried to at least shift the course at which they are adding power generation, that is lower carbon. That is at least in the power sector. There are a lot more emissions than just the power sector, but that is one positive sign we've seen so far.

    By signing up to import vast quantities of oil and gas from Russia, is China simply outsourcing its CO2 emissions?

    Ethan Zindler: It is an interesting question. And somewhat of an analogy would be looking at the fact that the US emissions have been overall sinking in the last five years. And part of that is because we've been doing less manufacturing here, although the manufacturing industry has been rebounding. But I do think I would take a slight issue with that. If you think about the carbon accounting, if, let’s say, as you’ve mentioned, Russia is the major exporter of oil to China, and China in turn uses that in many cases as gasoline or as diesel fuel, if you are doing an honest CO2 emissions accounting, then you are actually going to count the tailpipe emissions from those vehicles in China. So, I don’t think that that is essentially skirting the issue necessarily.

    Will there be a backlash against this from the Republicans?

    Ethan Zindler: It is a good question. There a couple of things. First of all, to be clear, and I think this is your argument that the Obama administration would make, the regulations that they’ve put on the CO2 emissions have been essentially just the implementation of what a lot know as the Clean Air Act. It was written 40 years ago and it essentially gives the US federal Government the leeway to regulate harmful pollutants into the atmosphere.
    So, they would argue – this isn’t new policy, we've now figured out that the CO2 is a harmful pollutant, just like other harmful pollutants that we knew about 40 years ago. And we are simply using the law to keep people safe. So, that’s the argument they may declare. They would say – this is not a radical policy departure in any way as the result of that.

    As for the opposition, you are exactly right in the sense that the Republicans did extremely well in the midterm election a couple of weeks ago. The Republicans now will hold the majority in the Senate and in the House once the new Congress is seated at the end of January 2015 and will be there for the next two years. And their opposition to this is clearly stated. In a number of cases they come from states that rely very much on coal production to fuel their economies.

    And so, not too surprisingly just last week in the wake of this announcement they did attack the deal, although I thought it was interesting. The tactic they took, they didn’t go after the Obama administration and say – look, climate change isn’t real. They weren’t that direct about it. And they didn’t even attack the Obama administration for over-committing the US. What they did was to say – no, you are a fool, Obama, for trusting the Chinese, they’ll never hit the target that they’ve set, this is too ambitious and we don’t trust them.

    So, all the fire… and it seemed to be fairly coordinated, the fire was trained on China and not on Obama, and definitely not on the question of whether the climate change is real, because actually, if you look at the polling in the US, the American public has generally started to coalesce around the idea that this is a problem. Whether or not they are willing to do something about it is another question. But I think that actually the Republicans a bit out of line with the public on the question of whether or not climate change is a problem. I think most people recognize that it is at this point.

    Tags:
    climate change, China, United States
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