Global Cachet

Media headlines on the UN’s climate change discussions (formally known as the UN Framework Convention on Climate Change or UNFCCC) look about the same as they did this time last year: “Climate Talks Unravelling as China and US Clash”; “World Climate Talks Going Backwards, EU says”; “Climate Talks Stumble”. Is anyone surprised? Did anyone really think that the developed countries would have figured out where they are going to get US$ 100 billion a year to fight climate change and that developing countries would have solidified new measurable targets all the while grappling with restarting economic growth?

Despite the lack of progress in this forum; many countries, most notably China, are forging ahead with alternative energy technologies. China is already one of the world’s leaders in wind power and solar energy, and has paved the way for a big expansion of nuclear power. Beijing has already been successfully courting Kazakhstan in order to diversify its oil and gas supplies and as the two countries get closer, it’s likely that Kazakhstan will feature prominently in China’s nuclear energy expansion plans. (Kazakhstan possesses 19% of the world’s reserves of uranium-with an estimated 444,000 tons of recoverable uranium deposits, second only to that of Australia.)

Further, China has built one of the biggest solar and wind power industries in the world. By 2008, China was the world’s second largest wind market by newly installed capacity and the fourth largest in overall installed capacity. It became the world’s largest PV manufacturer in 2008, with 95% of its production for the export market.

The apparent sea change in Chinese policy and attitude may be the result of stark warnings Chinese leaders have been given by their own scientists about the possible impact of global warming on the country’s economy. However, like the development of strong national oil and gas companies, there is also an element of industrial policy guiding China’s new direction.

In addition, in 2009, for the first time in China’s history, more than half (51.8%), of China’s oil needs came from foreign sources. Passing the 50% threshold has reinvigorated the energy security debate and reinforced the alternative energy push.

As part of their recovery plans, both the U.S. and Europe made grand announcements of financial support for new environmentally friendly technologies. However, Europe’s stimulus spending on green technology is dwarfed by China’s investment. The percentage of EU spending going to green measures is less than 10% while at the same time China is projected to spend 34% of stimulus money on green technologies. The total earmarked for green investment and R&D from both the EU and Member States together is between €86 – €90 billion which is comparable to what the U.S. is planning to spend – about US$ 80 billion.

While negotiators travel between Copenhagen, Bonn, Beijing and Cancun in hopes of pasting together some sort of climate deal they can brand a last minute “success”, Andrea Spring, Staff Member, U.S. House of Representatives notes that “China is moving so rapidly on wind power that the U.S. is being outstripped…China and India will own green technology.”

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