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Will China Become A Leader In Clean Energy?

By Knowledge Wharton. Originally published at ValueWalk.

Penn’s Jacques deLisle, NYU’s Ann Lee and UCLA’s Alex Wang discuss China’s changing role in clean energy production.

Donald Trump targeted China and India when he announced earlier this month that the U.S. was pulling out of the December 2015 Paris Agreement on climate change. Trump talked about how uneven the playing field was, and that the U.S. would bear the brunt of the costs of combating climate change while China and India could continue to build coal-fired power plants and go slow on curbing greenhouse gas emissions. Yet, China happens to be a signatory to the Paris Accord, and is making huge investments in clean energy — in fact, double what the U.S. is investing in that space. It also is poised to create and develop a whole new market for energy-related infrastructure with its “One Belt, One Road” project. Alongside, individual U.S. states such as California that have their own clean energy plans are exploring partnerships in China to advance their programs.

ekidin / Pixabay

The upshot is that China could emerge as a global leader in not just combating climate change, but also as a low-cost producer of clean air technology, according to Ann Lee, a China expert and adjunct professor of economics and finance at New York University, and author of a forthcoming book titled, Will China’s Economy Collapse?

The U.S. withdrawal from the Paris Agreement “is allowing China to step into this leadership role without having to bear the full cost of leadership,” said Jacques deLisle, a University of Pennsylvania law and political science professor, and director of the University’s Center for East Asian Studies. In other words, the new climate-change power stakes will give China more elbow room to proceed with its economic agenda without necessarily putting in place the market reforms that the U.S. has long insisted upon.

In any event, China’s leaders have a self-interest above all else to champion clean energy because of the high costs it has paid and continues to pay for the pollution caused during its economic boom, said Alex Wang, professor of law at UCLA.

Lee, deLisle and Wang discussed the implications for China of the U.S. withdrawal from the Paris Agreement on the Knowledge@Wharton show on Wharton Business Radio on SiriusXM channel 111. (Listen to the podcast at the top of this page.)

An edited transcript of the conversation follows.

Knowledge@Wharton: Let’s start with the comments from President Trump singling out China and India. What was your reaction, Jaques, to that?

Jacques deLisle: It’s not surprising that he singled out China and India. He wanted to portray the Paris Agreement as being something that put an unfair burden on the U.S., and the best places to point for that, if you want to make that rather specious argument, [are] China and India. China passed the U.S. as the number-one emitter of greenhouse gases about a decade ago, and so any global solution will have China and the U.S. first and foremost and India not too far behind.

We have a long tradition in this whole process of trying to deal with climate change of differentiated responsibilities, in some sense putting less strict limits on developing countries than on developed ones. So it was an old card to play.

“We’re back to fighting a battle that we thought we had already fought and won, which is getting the major emitters on board with some kind of reduction plan.” –Jacques deLisle

But that is the reason for pointing to China and India. They are big polluters, and as developing countries they get a little bit more slack than the most developed countries do, particularly as to the date when peak emissions were supposed to be hit. China was set for 2030, and it’s almost certainly going to beat that goal, but that’s obviously behind what the U.S. and other developed countries were supposed to do in the short run in terms of curbing [emissions]. Now, per capita we [in the U.S.] are still putting out way more [than other countries].

U.S. Role in China’s Pollution

Ann Lee: I think [Trump’s comment] was aimed at a domestic audience. Trump actually understood why China is such a large emitter. You only have to look back at a very short period in history. How did China become such a big manufacturing and polluting environment? It was because lots of CEOs in the U.S. decided to outsource their manufacturing to China, and then re-import all of those products to the U.S. So it was actually a lot of U.S. products pushing their pollution over to China. If you had to trace where the original polluters were, it was really coming from U.S. sources.

So it is unfair to say that it was China doing it in isolation here. Frankly, China is trying to do as much as it can to try to cut back its emissions. It is impossible to say that you can just flip a switch and cut all of those emissions overnight. China is a massive country; it’s going to take a very long time to switch out all of the coal power plants into nuclear, which is what it is trying to do right now. Nuclear is a much cleaner source of energy. Wind and solar at this point in time just cannot replace coal; they’re simply not powerful enough.

Even though China has built hundreds of wind turbines, it still has to solve the problem of how to connect all of those wind turbines to the electrical grid. But once they solve that problem, there is no stopping China from building thousands of these and stepping up its transition to alternative energy.

Alex Wang: We should also remind ourselves that one of the things that Trump said in his statements is simply not true, which is that China will have to do nothing for 13 years. This has been a standard Republican [Party] line, referring to the fact that China in the Paris pledge said it will try to peak emissions by 2030, 13 years from now. [Republican Senate majority leader] Mitch McConnell and others have said that this means China will do nothing, and it will just continue to emit for thirteen years.

But China has already in earnest for the last decade been working on improving energy efficiency and carbon efficiency in the economy, and the investment that will be involved in peaking by 2030 is tremendous. [China] has been talking recently about a $360-billion investment in clean energy between now and 2020. For it to transform its energy economy, which is now [more than] 60% coal, to one where you are peaking emissions and relying more on natural gas, nuclear, wind, solar and hydro, it requires a tremendous transformation of the economy. That will require a tremendous amount of work in the next 13 years.

Making Room for a New Leader

Knowledge@Wharton: Ann, where does this put China in terms of the Paris accord? Does it put it at or near the top of leading the pack in terms

The post Will China Become A Leader In Clean Energy? appeared first on ValueWalk.

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