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When I lived in the Himalayas in the early 1980s, the villagers in Manang would frequently distill their harvested buckwheat into potent ‘rakshi’ (रक्सी), the Nepali word for spirits (which carries the exact same double meaning of “high-proof alcoholic beverage” and “supernatural beings” as does the English word).  An aspect of the distillation process which I gained appreciation for as I observed and sometimes lent a hand was the quantity of the grain stock needed to produce a given quantity of home-grown moonshine.  A large quantity of grain distilled down to a precious few, highly potent drops.

Thirty-eight pages of, as officially named, The Biden Plan for a Clean Energy Revolution and Environmental Justice can be distilled down to the 11 words of that title and the 33 words of its first sentence.  That first sentence reads, “From coastal towns to rural farms to urban centers, climate change poses an existential threat – not just to our environment, but to our health, our communities our national security, and our economic well-being.”

There is of course much more that could be said about what is unofficially called the Biden Climate Plan.  And I will have more to say about it in future posts.  But it seems as good a place to start as any to look at those first 44 words and savor them as a distillation of the entire plan.  The plan packs a wallop compared to Trump’s tasteless concoction while also revealing a different blend than the Green New Deal. 

The three key ideas embedded in the title are: (1) the link between the environmental crisis and a clean energy-led transformation of the economy;  (2) the scale and urgency of the transformation requiring revolutionary, not incremental, levels of response; and (3) the implication that neither the environmental nor economic response can grow fully — sustainably and with regenerative power — without a social justice tap-root.

 The first idea restates an approach to mitigating climate change initially developed in the second term of the George W Bush Administration and then substantially expanded during the eight years of the Obama Administration.  That approach was to take the U.S. National Labs model for innovation, developed after WWII, and update it to a Version 2.0 in order to foster clean energy industries for the 21st century challenge of climate change.  In both versions of the model, government leads the way with basic research and early commercial proof-of-concept work until the private-sector is motivated to take over with commercialization, applying skills in lowering costs and building consumer acceptance.  Government’s role during commercialization shifts to articulating policy so that investors have enough time-horizon certainty to deploy capital to accelerate commercialization and build out the market. The story of DARPA and the development of the Internet is the classic case study cited for this approach.

As to the “revolutionary” aspect, thoughtful conservatively-minded people – by which I mean, political conservatives who don’t deny anthropogenic (i.e., human-caused) climate change — have gravitated to an alternative approach. Their preferred approach is to keep government out of the market except to articulate an across-the-board carbon tax system  This latter approach, promoted most prominently by James Baker, George Shultz, and Hank Paulson at the Climate Leadership Council, is one that current Big Oil companies are more willing to work with.  It raises their cost of doing business but does not pose the existential challenge of a government-led ‘new economy’ transformation.  Conservatives argue that nothing will happen until the oil giants and the big utilities sign on.  An evolutionary approach. Liberals argue that the oil giants and big utilities will only sign on when a ‘new economy’ transformation forces them to.  In other words, a revolution.

The third pillar holding up the title is ‘environmental justice’ highlighting the fact, equally apparent with the COVID-19 pandemic, that climate change affects the health, livelihood and well-being of disadvantaged communities much more deeply and perniciously than it does more privileged communities.   Rather than plunge into that deep topic here, I recommend anyone who’s looking for an informative and lively toe-dip into the subject to view this three-and-a-half primer on the topic by Grist.

Moving on to the 33 words of the first sentence, three key points are being communicated here:

First, climate change is an existential threat.  Period. 

Second, it threatens every single American, wherever they live and whatever they think about it.  Like with the spread of the COVID-19 virus, if we don’t master it, it masters us. 

Third, the threat is varied and far-reaching, applying to the quality of the environment we live in, to our health and morbidity, to the strength of our communities, to our economic well-being and, importantly, to our national security.

Rather than go through each of these, I’ll close this post with just a quick look at the threat to our national security.  To outline the different dimensions of threat posed to our national security, I’ll draw directly – and with a grimace of irony —  from the Trump Administration’s own assessment, an assessment it is required by law to make even while the White House studiously ignores it.

So here goes in the Trump Administrations own words …

  • “Climate change creates new risks and exacerbates existing vulnerabilities in communities across the United States, presenting growing challenges to human health and safety, quality of life, and the rate of economic growth;”
  • “Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century;”
  • “The quality and quantity of water available for use by people and ecosystems across the country are being affected by climate change, increasing risks and costs to agriculture, energy production, industry, recreation and the environment;”
  • “Impacts from climate change on extreme weather and climate-related events, air quality, and the transmission of disease through insects and pests, food and water increasingly threaten the health and well-being of the American people, particularly populations that are already vulnerable;”
  • “Ecosystems and the benefits they provide to society are being altered by climate change and these impacts are projected to continue. Without substantial and sustained reductions in global greenhouse gas emissions, transformative impacts on some ecosystems will occur; some coral reef and sea ice ecosystems are already experiencing such transformational changes;”
  • “Rising temperatures, extreme heat, drought, wildfire on rangelands, and heavy downpours are expected to increasingly disrupt agricultural productivity in the United States. Expected increases in challenges to livestock health, declines in crop yields and quality, and changes in extreme events in the United States and abroad threaten rural livelihoods, sustainable food security, and price stability;”
  • “Our Nation’s aging and deteriorating infrastructure is further stressed by increases in heavy precipitation events, coastal flooding, heat, wildfire, and other extreme events, as well as changes to average precipitation and temperature. Without adaptation, climate change will continue to degrade infrastructure performance over the rest of the century, with the potential for cascading impacts that threaten our economy, national security, essential services and health and well-being.”

We’ll have occasion in the future to look into the health and morbidity impacts, the community well-being impacts, and importantly the economic impacts of climate change. But this quick inventory of some of the national security impacts, by the Trump Administration’s own reckoning, should be enough to make clear that we need to be doing more.

So, what would I tell the Biden team after taking this first sip of the Biden Climate Plan?  It’s all good as far as it goes.  But it could go farther.  Why take an either/or approach when the scale and urgency of the problem call for both/and.  A commitment to advancing the carbon tax solution in parallel with the plan’s advocacy of clean energy market transformation would make it possible to move farther and faster.  Like a climber uses two surfaces to climb an otherwise unclimbable rock-wall. 

We need to be moving up this mountain fast and skillfully. We’re currently stuck mid-way up, staring at a formidable facade, and wondering how in the world we’re going to scale it.

The global scientific consensus, most prominently supported by the work of the United Nations Intergovernmental Panel on Climate Change (IPCC), assesses with high confidence a global warming increase of 1 °C as measured against preindustrial levels. Currently experienced effects from the 1 °C global warming which has already occurred include: loss of sea ice and glacial shrinking, accelerated sea level rises, shifting atmospheric and oceanic currents, longer and more intense heat waves and hurricane seasons. Impacts on the biosphere include the shifting of plant and animal ranges, earlier plant and tree flowering, and rapid declines in bio- diversity. All of these changes threaten the equilibrium of the planet and, more fundamentally, the continued viability of human adaptation to the planet.

The most recent comprehensive report issued by the United Nation’s Intergovernmental Panel on Climate Change (IPCC) in 2018 compares the difference in impacts on human societies (the ‘delta’) if global warming is allowed to reach 2 °C as opposed to being stabilized at 1.5 °C above preindustrial levels. These delta effects2 include: an additional 10 million people endangered by sea level rise; several hundred million more people made susceptible to poverty; 50% more people exposed to water stress; loss of 1.5 million additional tons of global annual catch for marine fisheries; the number of plant and animal species on which human life depends losing half their habitat.

Clearly, the challenge is epochal. Even assuming that all countries in the world fulfill their Nationally Determined Contributions (NDC) pledged in the Paris Agreement, the world is currently on track to exceed 1.5° C by 2050 and to remain well above that threshold into the next century.

At a national level, the challenge is no less urgent or less central to societal well-being. Even for an administration notably skeptical of climate change science and aggressively committed to deregulating and redefining environmental standards so as to lessen the severity of threat assessments, the outlook remains dire. According to the Trump Administration’s most recent Climate Assessment3, which synthesizes the data and projections from thirteen federal agencies, key risks facing the nation as a direct result of climate change include risks to communities, the economy, water quality, citizen health, ecosystems, agricultural and food supply; the nation’s infrastructure; and the nation’s defense. To quote directly several specific examples:

  • “Climate change creates new risks and exacerbates existing vulnerabilities in communities across the United States, presenting growing challenges to human health and safety, quality of life, and the rate of economic growth;”
  • “Without substantial and sustained global mitigation and regional adaptation efforts, climate change is expected to cause growing losses to American infrastructure and property and impede the rate of economic growth over this century;”
  • “The quality and quantity of water available for use by people and ecosystems across the country are being affected by climate change, increasing risks and costs to agriculture, energy production, industry, recreation and the environment;”
  • “Impacts from climate change on extreme weather and climate-related events, air quality, and the transmission of disease through insects and pests, food and water increasingly threaten the health and well-being of the American people, particularly populations that are already vulnerable;”
  • “Ecosystems and the benefits they provide to society are being altered by climate change and these impacts are projected to continue. Without substantial and sustained reductions in global greenhouse gas emissions, transformative impacts on some ecosystems will occur; some coral reef and sea ice ecosystems are already experiencing such transformational changes;”
  • “Rising temperatures, extreme heat, drought, wildfire on rangelands, and heavy downpours are expected to increasingly disrupt agricultural productivity in the United States. Expected increases in challenges to livestock health, declines in crop yields and quality, and changes in extreme events in the United States and abroad threaten rural livelihoods, sustainable food security, and price stability;”
  • “Our Nation’s aging and deteriorating infrastructure is further stressed by increases in heavy precipitation events, coastal flooding, heat, wildfire, and other extreme events, as well as changes to average precipitation and temperature. Without adaptation, climate change will continue to degrade infrastructure performance over the rest of the century, with the potential for cascading impacts that threaten our economy, national security, essential services and health and well-being.”These effects are felt most directly at the local level. This is because the costs which climate change inflicts globally and nationally – costs of community disruption, slowing economic growth, deteriorating water quality, ecosystem disequilibrium, and infrastructural decay – are mostly borne at the local level. To address this challenge, the City of Philadelphia, like most major cities in the country and many counties and townships as well, has its own Climate Action Plan. Generally, these local plans have three major components: (1) at the grassroots level, the plan serves to connect with various stakeholder groups such as businesses, educational institutions, residential associations, and engaged constituencies to raise awareness and help coordinate common effort; (2) at the local governmental level, the plan articulates the limited number of focal areas where local government has determined its scarce dollars canhave greatest, proactive impact; and (3) at the supra-local governmental level, these plans serve as the blueprints for collaboration with other cities and regions, as the justification for federal budget requests, and as the channel for consolidating and reporting local ‘carbon emissions savings’ into the Paris Agreement NDC process.

As we have learned with the COVID-19 pandemic, a straightforward scientific fact can be politically complicated.  Acknowledging and addressing human-caused climate change is politically complex in the U.S. at this moment.  So is cooperating with China on anything.  Recognizing those complexities does not, however, absolve us of the responsibility to find a way forward on both the science and the international relations.

1.5° is where the U.S. and China must meet.

FPRI HK Publication Graphic

On January 29, the Hong Kong governent announced potential amendments to its extradition laws that would allow suspects to be extradited to countries with which the city has no formal extradition agreements. According to Chief Executive Carrie Lam, the bill was a response to a murder case in Taiwan, where the suspect had fled back to Hong Kong and now could not be called to face justice. In Lam’s mind, plugging this legal loophole would also fulfill a longtime wish of Beijing: that political dissidents and corrupt officials alike could now be tried in the mainland’s own courts.

When Lam subsequently fast-tracked the bill through the legislature, confident that rising concerns were either misguided or sure to eventually be assuaged, she could not have foreseen the oncoming storm: that resistance to the bill, to her leadership, and eventually to the entire political system altogether would spiral into marches of millions and an opposition movement that shows no signs of going away. After all, hadn’t the pro-democracy movement largely splintered and faded away in the wake of the 2014 Umbrella Movement, having failed to achieve its political goals and suffered decisive losses at the polls in 2018? Wasn’t the populace as a whole widely apatheticcynical, and disillusioned with civil disobedience?

Yet for over a month and counting, protest after protest has been staged in the city, with a cumulative participation of 4,228,900. Carrie Lam has been forced to declare the bill first “suspended” and now “dead”—though even this most recent announcement still stops short of full withdrawal, and has failed to appease her critics. Opponents of the bill have decried sending fugitives to a justice system that boasts a 99.9% conviction rate and argued that extradition would violate the autonomy promised to Hong Kong under the “one country, two systems” policy, which was designed in the lead-up to the 1997 handover of the former British colony back to China and which granted Hong Kong its own separate judiciary, legislative system, and free Internet and press. More than being a simple change of law, the bill was seen as a fundamental challenge to the rights and freedoms that have made Hong Kong more than just another Chinese city.

Underpinning the events of the past month has been a recurring pattern of government indecision and inertia fueling the momentum of the movement. Demand after demand went unacknowledged; scenes of police brutality shocked a city whose police force had until then been considered “Asia’s finest”; and demonstrators’ slogans have evolved from calling for the extradition bill’s withdrawal to asking for universal suffrage and democracy. Most recently, protests have moved on to explicitly attract the attention of Chinese from the mainland, as on July 7 a march of 230,000 was held at the West Kowloon station that connects the mainland to Hong Kong, and many slogans were shouted in Mandarin instead of Cantonese. Protesters are no longer simply demanding the bill’s withdrawal, although even that demand alone has yet to be granted, but for fundamental reform. Here’s how it all happened.

Hong Kong in Protest

June 9Over 1 million people took to the streets protesting the extradition law (1 in 7 of the city’s population). Backlash to the bill came not only from traditional opposition stakeholders but also from the likes of judges and businesses; the crowds that turned up on June 9 reflected this diverse set of converging interests.

June 10Chief Executive Carrie Lam refused to withdraw the bill and instead doubled down on her commitment to push the amendments forward. In response, organisers called on protesters to reconvene around the Legislative Council (LegCo) building at 10:00 on June 12.

June 12: Tens of thousands of protesters began occupying the roads to the point that lawmakers were unable to gain access to the legislative complex, forcing the debate on the bill to be postponed. Shortly after 3:00—the deadline protesters had set for the government to withdraw the extradition bill—some protesters tried storming LegCo headquarters.

At this point, police began using tear gaspepper spray, and rubber bullets to disperse the crowds. Video footage documents police violence against largely unarmed crowds of mostly young people; at least 72 protesters were injured, and two were arrested while in the hospitalIn response, Lam reaffirmed her support for the police, described the protests as an “organised riot,” and continued to stand by the extradition amendment.

June 15: Lam announced the suspension of the extradition law, stating that no date had been set for the “next step forward.” Protesters remained unhappy Lam ignored their other core demands, and argued that since suspension did not mean withdrawal, the bill could still be reintroduced at any time.

June 16: Two million people packed the streets, more than a quarter of the city’s population, demanding a full withdrawal of the bill, the retraction of the “riot” characterization, the release of all arrested protesters, an investigation of police brutality, and Lam’s resignation.

June 21-June 30A series of road occupations were staged after authorities failed to answer protesters’ demands. Protesters occupied the area around government and police headquarterskey thoroughfares, and other government buildings.

July 1Ahead of the flag-raising ceremony commemorating the 1997 handover, police deployed pepper spray and batons against demonstrators who occupied roads around the venue early in the morning. In the afternoon, 550,000 protesters attended the annual July 1 democracy march, the highest ever turnout.

In a separate demonstration, protesters stormed the legislative building, smashing through glass walls and vandalizing the inner chamber. Demonstrators tore down portraits of past LegCo presidents and spray-painted pro-democracy slogans on the main chamber’s walls, including one that said, “It was you who told me peaceful marches did not work”. At the same time, they barricaded off books and cultural artifacts for protection, and left cash behind for the drinks they helped themselves to.

July 7In attempts to reach mainland audiences, and to breach China’s extensive censorship of the protests230,000 marched to the West Kowloon high-speed rail terminal located in a popular tourist district. The peaceful demonstration ended in baton charges by riot police in a bid to disperse protesters.

The Anti-Extradition Protests in a Hong Kong Perspective

The anti-extradition protests have been about far more than extradition. This specific topic may have proven the most perfectly calibrated to the frequencies of public anger, yet crowd sizes, breaking record after record, point to a far deeper wellspring of outrage long fomented by cumulative years of misgovernance—and, most recently, of sharply escalating repression.

In 2003, a law known as “Article 23” was proposed that would criminalize acts of sedition and subversion against mainland China; in 2014, a “Moral and National Education” civics course was announced for all Hong Kong schools in response to Chinese senior leaders’ observations that the city’s youth needed to better “love the motherland”; in 2014, long-awaited constitutional reforms that would have allowed for general elections for the Chief Executive were revealed to only permit voting on a limited number of pre-approved candidates. The next year saw five people, all linked to a Hong Kong bookshop that published books banned in China, disappear. Hong Kong dropped to 70th in the world on the global press freedom index, from 18th best in 2002. In July 2017, Carrie Lam became the Chief Executive despite not being the most popular candidate—she was, of course, favored by Beijing. In October 2018, the government issued its first-ever visa denial to a foreign journalist, after he moderated a Foreign Correspondents’ Club event in August that featured a talk by the convenor of the pro-independence National Party, Andy Chan Ho-tin. The National Party was banned on national security grounds in September that year. In April 2019, shortly after introducing the extradition amendments, nine leaders of the 2014 Umbrella Movement were convicted for “public nuisance.”

Millions of people in Hong Kong marched in recognition that the extradition bill was simply the latest of many attempts at suppression—and that, should the law pass and vastly expand the reach of China’s retribution, this act of protest could very well be their last.

Yet, in a city that has been both a bridge to and a refuge from the mainland, political space has long been defined by a continuous push-and-pull between authoritarian pressures from Beijing and civic freedoms in Hong Kong: free Internet, tenacious independent journalists, industrious activists, prominent dissidents, and, perhaps most importantly of all, an entire generation of young people who in 2014 came to maturity on the picket lines of protest. The 2003 sedition law was withdrawn, followed by the then-Chief Executive’s resignation after crowds of over 500,000 marched against its implementation. The 2011 national education law was also shelved, having drawn protests of 90,000 in July and 120,000 in September. Members of the 2014 Umbrella Movement might not have brought about the change in the system they dreamed of, but they left a legacy nonetheless. In this city of “liberty without democracy,” described as such (and fittingly so) by Hong Kong’s last colonial governor, citizens have long been voting with their feet. To protest in the streets of Hong Kong is to partake in, and add to, this shared inheritance of civil protest.

Demonstrators this time around knew what to be afraid of. Throughout the week, departing protesters formed unusually long lines at subway stations’ single-use ticket machines, because cash is less easily tracked. Demonstrators turned off location tracking on their phones, and deleted conversations and photos on social media and messaging apps; switching, in the latter case, from the typically most popular WhatsApp to the better encrypted Telegram, which became the #1 most downloaded app in the city. Yet, for all its encryption, protesters may not be fully safe, as police have reportedly collected identification information from protest group chats with tens of thousands of members; on June 11, authorities arrested the administrator of a group chat of 20,000, Ivan Ip, despite Ip being at his home miles away from the protest site. One day later, Telegram reported experiencing powerful distributed denial of service (DDoS) attacks from “IP addresses coming mostly from China.” Gas masks, goggles, caps, and helmets helped protect protesters against tear gas and pepper spray—and they also helped hide their faces. Following major demonstrations, police have been searching vehicles and hospital rooms for protesters, with one driver arrested on July 2 for possessing “offensive weapons”—a pair of scissors and his asthma drugs. As of July 7, 61 have been arrested on protest-related charges. One of them is 14 years old.

What comes of the anti-extradition movement is of paramount importance; at the same time, it almost doesn’t matter. If the protests succeed, they should inspire the world. If the protests fail, they should still inspire the world. Governed by a system where the ballot is largely meaningless, people are voting with their bodies instead. Hong Kongers are more afraid, and more determined, than ever before.

 

Authors:

Due to the situation in Hong Kong after the implementation of the National Security Law, the identity of the primary author of this piece has been removed for safety concerns.

M. Terry Cooke is a Senior Fellow in the Asia Program at the Foreign Policy Research Institute. He founded the China Partnership of Greater Philadelphia in 2011.

@mterrycooke

The headwinds are strong at the moment but, knowing how to tack, we at China Partnership of Greater Philadelphia will still get to our goal. Market forces are at center-stage now and with the Trump Administration stepping back at the national level, sub-national leaders like California and Philadelphia are stepping forward in support of U.S.-China co-leadership on climate change.
 
Xi Jinping by Abode of Chaos artist Thierry Ehrmann
(Even the Trump Administration’s effort to undo the Clean Power Plan has a long way to go through the courts and the constitutional process. The clear science of proven medical benefit behind the Clean Power Plan (i.e., closing down coal-fired utilities) may prove decisive for the judicial branch and hand the Trump Administration yet another loss in federal court).

by Terry Cooke

Reposted from original publication in the Philadelphia Business Journal on April 7, 2017
Click here to link to original article

chinese-president-xi-arrives-01-rgb-480xx4672-2631-0-151

As President Donald Trump prepares to meet with President Xi Jinping for the first time this week, the world is watching closely.  Of particular importance is the ‘gut feeling’ which each leader will take away following their informal sessions together in Mar-a-Lago on Thursday and Friday. At the bilateral level, will the leaders trust each other to hold to the last quarter-century’s course of strategic engagement or will pressures from North Korea or from economic nationalism precipitate outright conflict?  At the global level, will the two share some intuition that the national security of both countries requires continued demonstration of U.S.-China co-leadership on the world stage in confronting climate change? Or will they accept the break-down of the Paris COP21 breakthrough?

While the initial meeting between these two men is doubtless important, engaged citizens must remind themselves that their voices too matter greatly in answering these questions.  Fortunately, in the Greater Philadelphia region, we already have a place on this global stage.  With history to prompt us and the present-day resources of the city and region to guide our role, we can speak up and be heard on these vital questions.

How?  Start by recognizing that U.S. policies toward China and climate change are inseparably linked.  There is simply no global solution to the climate change challenge without cooperation between our two countries.  Look at the history of talks on climate change between the advanced and developing worlds, which spun their wheels for a quarter-century, enduring breakdowns in Kyoto and Copenhagen.  It was only following the first tentative gestures of cooperation between the U.S. and China in 2009, building eventually to a Presidential-level announcement of joint commitments by Presidents Barack Obama and Xi Jinping in November 2014, that a first-ever global agreement on action steps could emerge in Paris in December 2015.

Similarly, there is no possibility of the U.S. and China sustaining their cooperation on the climate change front if the U.S. starts viewing China as an outright antagonist.  The relationship between the U.S. and China is too complex and dynamic for simple “friend or foe” typologies.  The two sides must manage conflict in those areas where U.S. and Chinese national interests diverge (North Korea, cyber, South & East China Seas, etc) and maximize cooperation in those areas where national interests are shared (climate change cooperation, counter-terrorism, nuclear non-proliferation, etc).

Can a metropolitan region like Greater Philadelphia play a meaningful role on this monumental global stage?  Not only can we, we have been called to do so.  In their joint 2014 announcement, Presidents Obama and Xi made clear that, with the stage for bi-national and multi-national cooperation against climate change effectively built, the spotlight was now on ‘sub-national actors’  — cities and states, the private sector, and NGOs – to step forward and implement actions “at the local level where they matter most.”  City actors are particularly important on this stage because more than half of humanity now lives in cities and mayors have direct influence over the urban built environment and the metropolitan transportation systems that together account for roughly two-thirds of global greenhouse emissions.

Moreover, Philadelphia boasts a unique history of cooperation with China, reaching back to 1784 when The Empress of China, a ship captained and financed by Philadelphians, began the first commercial trading voyage to China from the newly formed United States.  This sparked a century-long trade boom – furs, woods, and silver coins from America for artworks and exotic foodstuffs from China – that brought lasting mutual benefit.  So much so that, at the time of the Centennial World Fair in Philadelphia in 1876, the Guangxu Emperor sent a personal emissary and over 6,000 categories of objects, staking China’s claim as the largest foreign pavilion at the exhibition and helping to establish this event by upstart Americans among the top tier of world exhibitions.  With those strands of history in the weave, it was especially fitting that, 96 years later, President Nixon selected Maestro Eugene Ormandy and The Philadelphia Orchestra to travel to China in 1973 to boost diplomacy with people-to-people outreach.  With this ‘cultural diplomacy’ helping overcome a quarter-century of isolation and enmity between the U.S. and China, Philadelphia and Tianjin were able to become the first two U.S-China Sister Cities in 1980.

It is not only historical experience but, more importantly, present-day resources that equip Philadelphia to take a leading role on this epochal stage.  We are recognized, nationally and internationally, as a leading center for innovation and application in a wide-range of energy-efficient building, smart grid and other clean energy technologies.  We are pioneering open data initiatives and other forms of innovative public/private collaboration that improve the urban environment.  Crucially, our region is home to globally-acclaimed universities, and it offers lifestyle amenities that attract the best-and-brightest to study and live.  In fact, the most comprehensive study of the U.S. clean energy economy (Brookings, 2011) identifies Philadelphia as the fulcrum of a clean energy super-corridor of innovation and job-creation stretching from northern Virginia to the Boston area.

There is, and will remain for some time, uncertainty at the national level over the Trump Administration’s policies toward China and climate change.   But we can take positive and effective action now. We can welcome our P.R.C.-national students (UPenn alone has 2,100) and young professionals as ‘new Philadelphians’ and introduce them to ‘green Philadelphia’ (including The Circuit network of hiking and biking paths in the largest urban park system in the country; and the Northern Liberties and other urban lifestyle neighborhoods of the future).  We can work with our private sector and business associations to encourage them to start looking across the Pacific as readily as they do the Atlantic.  We can support organizations like Citizens Diplomacy International, Global Philadelphia Association and China Partnership of Greater Philadelphia which are innovating new models of engagement on platforms of cultural, trade and investment, and environmental leadership.  In the best tradition of Philadelphia – a wellspring of civic and social activism and home to Benjamin Franklin, one of America’s most creative thinkers —  we can lead with a spirit of cooperation and prove yet again that innovation is the surest path to a better future.

Terry Cooke is the author of Sustaining U.S.-China Cooperation in Clean Energy (2012) and the founding director of China Partnership of Greater Philadelphia.  Previously, he served in the U.S. Senior Foreign Service with postings in Taipei, Berlin, Tokyo and Shanghai.

Following the historic U.S.-China joint announcements on climate change and clean energy presented by Presidents Obama and Xi last November, the global climate change picture continues to come into clearer focus.  In the foreground, the nations of the world are moving along the ‘road to Paris‘ and preparing their voluntary action plans for consideration by the world’s heads of state at the COP21 meeting in Paris this December.  In the background to this picture, China is now making clear the costs — and the expectations it has for extra-governmental support — in funding the programs to meet pollution targets in its own national climate change plan.

Here are the highlights:

  • Estimated funding need is $320 billion per year for the next five years
  • China’s budget currently is projected to cover only 15% of that five-year funding need
  • China will rely on global financial institutions and instruments to fund the 85% shortfall.  These sources include carbon trading, multilateral loans, bond issues, and special funds.

FT article 4-23-15

Here is the full text of today’s Financial Times article on this topic:

China spells out cost of meeting pollution targets

by Lucy Hornby in Beijing

Financial Times,  April 23, 2015

China needs Rmb2tn ($320bn) a year in investment over the next five years to meet targets on reducing pollution set by the ministry of the environment, according to the country’s central bank in a report on “green” finance.

The report, issued Wednesday, estimated that China’s budget covered only 15 per cent of the required investment, and called for carbon trading as well as financing tools such as loans, bonds and special funds for green projects.

Ma Jun, a former Deutsche Bank economist who is now chief research economist for the People’s Bank of China and author of the report, wrote: “It is crucial that the financial system play the role of channelling and incentivising private capital into the green sectors.”

Last week the ministry released a plan to address water pollution while detailed plans have already been released by provinces to meet air pollution goals set out in 2013.

China’s financing announcements as well as its five-year plans can be a mishmash of previously announced infrastructure projects and new pet schemes, making it hard to pin down how budgets have been allocated.

Some of the recommendations are under way. China plans to combine seven city-based carbon trading pilots into a national scheme next year.

Developers may get preferential bank loans if their projects meet national priorities, including a goal for renewable energy to make up about a fifth of China’s installed capacity by 2020. Projects already announced include the $150bn construction of dozens of nuclear power plants, and plans to build hydropower plants on the few stretches of Chinese rivers that are not yet dammed.

Some green financing schemes have potential for abuse. For example, property developers can avoid lending restrictions by labelling their buildings “green” or “energy efficient”. Both concepts tend to be loosely defined.

Some of China’s goals are modest by developed-country standards, such as making 93 per cent of water supplied to cities “suitable for drinking” by 2020. Nonetheless, the targets require billions to be spent on water and sewage treatment alongside industrial upgrades.

Time to shake off the cobwebs and get this site up to date again with what we’ve been up to. This press release from Philadelphia City Hall — just out today — is a good place to start …

This is the second in the 2012 series  of  Cooketop News commentaries and news recaps.

By reviewing the previous week’s top stories involving — broadly speaking —  U.S./China clean energy, the commentary section isolates one trend/dynamic which points forward and can help illuminate news-in-the-making for the week(s) ahead.  Following the commentary is a summary of the week’s top stories.

This week? We look at the headline  (Cooketop News, Friday, January 13th) that, after four years, the U.S. re-took the lead from China as the front-runner in global clean energy investment.

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From 2008-10, the U.S. visibly lost pace – and, in some instances, lead position – to China as the world’s top investor in clean energy.  In 2010, China – then just over one-third the size of the U.S. economy – invested twice the absolute amount in clean energy as the U.S.  Yet, in 2011, the U.S. bounced back, reclaiming top-spot for the first time in four years:  U.S. investment increased 33% to US$56 billion while Chinese investment remained flat at $47 billion, according to Bloomberg New Energy Finance.  What does it mean? Less than the headlines might suggest.

Here are three key points to keep in mind while tracking current results – and handicapping future results – in the global clean energy arena:

(1) It’s not a sprint, it’s a marathon.  The bragging-rights prize will ultimately go to the economy which manages the best combination of technological innovation, political support, and financial sustainability over many years.  Germany and Spain have seen political support for their heavily subsidized systems erode with the euro.  The U.S. is in near political grid-lock over how to set that balance.  China’s position looks strong on the surface but is hobbled by lack of technology innovation, political accountability and financial transparency.

(2) How high’s the bounce?  The U.S. resurgence is due to short-term programs due to expire soon, such as biofuel support programs and energy efficiency measures.  Absent a broad national consensus, there is no strong reason to expect the U.S. “bounce” to remain strong throughout 2012, an election year.

(3) The bottom-line is this is a race is against time, not a Sputnik-type competition.  For either nation’s efforts to pay off, investment will need to be scaled to a global level by investors, public and private.  That won’t happen unless there is a clear middle-way between the extremes which tend to bedevil U.S.-China relations – zero-sum, highly-nationalistic competition on the one hand vs. unrealistic and unsustainable ideas of cooperation on the other.

While the metric of renewed investment vigor in the U.S. is encouraging, the real challenge for the future will be to define and align complementary ‘skill-sets’ in both the U.S. and China so that capital can be attracted and deployed on a global scale through these two massive markets accounting for 40% of the global GHG emissions problem.  We’ll need a discerning eye for the different strengths which our two countries can bring as complementary partners in this effort as well as a realistic understanding of our enduringly different systems and values.   Regardless of who has the momentary lead in investment level, we need to recognize that there is no path to a sustainable future for either country without  clear-eyed, realistically-based and sustained cooperation between the two.

                                              Monday, January 9, 2012

Africa & China: How it all Began

China to Tax Carbon Emissions by 2015

China Vows Backing for Firms Abroad

China Spring Festival Migration Begins

Tuesday, January 10, 2012

Hottest Solar Markets in Early 2012

12 Challenges for China in 2012

China’s Reform Irresolutions

DoE Heads Off Cleantech Materials Shortages

Wednesday, January 12, 2012

China’s Export Engine Downshifts

China Pumps In $10bn to Water Project

The Case Against Big Dams

Brand Make-Over for Philly Energy Hub

Thursday, January 12, 2012

Does the U.S. Prefer a Ma Victory in Taiwan?

The Perils of Cleantech Investing

China’s Cyber Deterrence

China Braces for Turbulent Year

                                            Friday, January 13, 2011

China’s Forex Reserves Decline

China Cedes Lead to U.S. in Cleantech Investment

China Idling New Aluminum Smelting Capacity

Dominique Doms of the International Trade Examiner shared the following observations on the recent clumsy steps in the pas-de-deux between the U.S. and China on climate change and clean energy policy coordination.  These missteps are beginning to follow a regular rhythym.  Last November, the COP15 in Denmark stumbled into acrimony when the Chinese negotiating team responded to Obama’s open hand with a pointed finger and the meeting broke up without a global framework deal to support cap-and-trade.  The approach to this November’s COP16 meeting in Mexico is already looking wobbly in light of two issues:

  1. The filing on September 9, 2010 of a trade action by the United Steelworkers against China for unfair subsidization of its renewable energy exports.  (Bearing in mind the ringside seat perspective I had on the U.S.-Japan auto trade dispute in the early 1990s, I see this move by U.S. labor on the global chessboard as natural and expected but hardly commendable.  At best, it will serve as a palliative and not a remedy).
  2. The clumsy steps China took to embargo strategic minerals essential for the manufacture of many clean energy products without official explanation.

Whatever happens in Mexico, the dance will have to go on.  As Bloomberg New Energy Finance has pointed out, the U.S. and China are effectively “joined at the hip” as a de-facto G2 burdened with the responsibility of maintaining global environmental and economic sustainability.

The ultimate remedy will be for U.S. policymakers to look into the mirror and understand that the real issue is not an either/or issue of cooperation v. competition with China, though both are inescapable facts of the matter.   The ultimate challenge is for us to realistically assess what we have and have not done to move our country into the future.  We can compare ourselves with  China but that comparison must be based on a realistic assessment of how our national systems are different and on different pathways we will need to follow to move our country forward.  Just like with Sputnik, our goal should not be to hold China’s clean energy development back, it should be to marshall our resources to move our country’s clean energy development forward.  In the final analysis, the U.S. and China will need to be partners in this global effort but that global partnership — in order to be effective — must be based on maximum effort by each of the partners as well as on a respectful and realistic understanding of the strengths and weaknesses of each partners system.  tc

Beginning of Dominique Doms comment:

“Clean and renewable energy production has become a new dispute between the US and China and centers around Chinese subsidies that unfairly give an advantage to local companies and price US producers out of the market.  Stephen Chu, US Energy Secretary, told the international press that the US government welcomes Chinese green companies but that there has to be a level playing field for US companies as well.

At the center of the dispute are large subsidies to Chinese manufacturers of solar panels and wind turbines that allow them to gain an unfair and competitive advantage over US companies that are not entitled to the same government stimulus.  The US is requesting from China, through the World Trade Organization, that US companies that manufacture green energy components have access to the same stimulus funds as their Chinese owned counterparts.  It is expected that China will ultimately reach an agreement with the US as both countries believe that government subsidies are a key factor in the development and manufacturing of green and renewable energy sources.

The goal of both countries is to further reduce carbon emissions to halt global warming by lowering global pollution.  China holds an advantage over the US as the largest manufacturer of solar panels. The edge in the global market with a very high demand for renewable energy sources is the direct result of China’s near monopoly of the rare earth minerals market.

China controls 93% of the RE market both in raw materials as well as its alloys that are used in solar panel reflection mirrors.  The US has reopened some of its RE mines again after having been absent in the market for 20 years. That alone may not be sufficient to close the competitive gap with China but subsidies to American producers may result in a better pricing balance.

Discussions between Mr. Chu and his Chinese counterparts have been ongoing since the opening of the US-China Clean Energy Research Center last week.

The center is the largest research center of its kind where scientists from both countries will jointly develop green and renewable technologies.  A permanent agreement may be reached prior to the COP-16 meeting to be held in Mexico from November 29 through December 10.”

(end of Dominique Doms comment)

I wrote around to some contacts yesterday including a link to this article by Thomas M. Hout and Pankaj Ghemawat in the current issue of Harvard Business Review. 

China vs the World: Whose Technology Is It? – Harvard Business Review

Emon Wang, a partner at Spirea Capital, wrote back with some insight of his own:

“Interesting and impressive… maybe the best English article on this topic I read this year.

However, as a native Chinese who works in cross-border deals in cleantech from Europe I`d like to add some words:

– The relationship between Beijing and local governments are very complicated and subtle. For foreign players, knowing how to play with both side is critical. Tip for beginners: it`s practical to make friend first with local governments.

– Instead of complaining, in order to maintain competitive power, foreigners might spend more time and money on R&D at home, to ensure a leading position and be one step head of China and other emerging powers. Without continuous innovation, being caught up on is only a matter of time. VW shared its technology with China for so many years and is still the No.1 seller in the country, a hell of money they have made and I don`t think they lose any of their core technology strength. IMHO, if your stuff can be easily copied, then it makes theoretically no sense to over-protect it and increase the cost of simple technology artificially.

– What China lacks is exactly the ground of technology innovation and R&D competence. Not the available technology itself. Consider the growing number of high-educated Chinese both domestically and oversea, the next generation needs the infrastructure. The government is now building this up.

– Technology in exchange for market is a fair trade. No one is forced to share his technology (take Google for example, you can quit if you want). On the micro level it`s about greed. On the political level it`s about p/l and jobs at these multinational corporations. And it`s about negotiation. If you did your homework badly and made too many enemies, you can`t expect a good deal.

– All in all, if you really understand the Chinese history, you will understand why own technology competence is so important in the culture. It`s not about taking profit from the foreign corporation or about a technology war whatsoever.”

Tim Giesecke, author of the forthcoming EcoCommerce 101, made the following comment and asked for some clarification from me on Emon’s last paragraph.

Tim’s comment:  “Perhaps the timeline is the most telling – China becomes the #1 economy in 500 AD – looses the title in 1850AD – poised to regain it soon. We Americans will need to recognize asap that we can sit and be entertained, but not all the time.”

Tim’s question:  “If you can help me tie the ends of the last paragraph – technology competence is so important in the culture…is it to prevent themselves of becoming vulnerable to market forces, negoiations?”

My attempt at clarification:  “There’s a tactical level that has to do with negotiations (Sun Tzu’s Art of War and all that) but it is mostly a culturally-patterned value deeply embedded in Chinese (read ’embedded in the Han majority’ comprising 95% of the Chinese population) as a result of centuries of real and perceived humiliation on the global stage after centuries of preeminence. They don’t want to ever go back to that historical place of weakness and technology is their ladder out.”

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