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President Biden’s first in-person appearance on the world stage included a tense but business-like meeting with Vladimir Putin, a NATO meeting in which NATO solidarity was vociferously reaffirmed and a meeting of G7 leaders in which the perceived threats of climate change and China both loomed large.

The final agreement announced at the conclusion of the G7 last Sunday featured two elements with direct bearing on China and, particularly, on China’s Belt & Road Initiative (BRI): a commitment to phase out coal-fired electricity generation and a revived commitment to provide $100 billion in green finance assistance to developing countries.  Both commitments were, however, long on symbolism and short on substance.

Today’s post looks at why the headlines for both announcements were printed in such large banner font, why the accompanying stories were so short in column-inch detail and why both stories serve to center on China at a meeting – involving the heads of state of the U.S., Canada, the U.K., Germany, France, Italy and Japan – where China is not represented.

The electricity generation commitment undertaken by the seven leaders was specifically that their governments would provide no new support for thermal coal power generation except in cases where carbon capture and sequestration (CCS) technology is deployed in tandem to neutralize the greenhouse gas (GHG) emissions produced by coal-firing.  This undertaking supports a previous G7 commitment to halve emissions by 2030 (against a 2010 baseline) on the way to achieving net-zero emissions by 2050.

The green finance commitment announced announced Sunday – to provide $100 billion annually to help developing countries decarbonize – was not in fact a new commitment but a reaffirmation of an earlier commitment which had lapsed during the Trump years. It was rolled out on Sunday with a new name – the Build Back Better World Initiative – but with no new funding attached.

Seen from a global perspective, both commitments are intended as a direct response to China and its Belt and Road Initiative.  China’s trajectory of domestic high-growth has resulted in it recently surpassing the GHG emissions of the entire developed world combined, according to a recent report by the Rhodium Group.  Compounding this unfavorable trend, China continues to support its Big Coal industry by encouraging exports of coal-fired power generation equipment to its less developed BRI partner countries.  The G7’s electricity generation commitment is therefore intended to draw a sharp contrast in climate change global leadership between the G7 group of democracies and the China’s competing, more authoritarian model.  Similarly, the green financing commitment is intended as an alternative pool of financing for developing countries to draw on separate from Chinese government lending and the BRI-focused Asian Infrastructure Investment Bank (AIIB).

So what accounts for the splashy headline but dearth of detail?  Two factors. The first is the very evident desire of the other six countries to welcome the U.S., post-Trump, “back into the club” by explicitly amplifying in the international arena President Biden’s domestic Build Back Better theme; and, more importantly, by presenting a show of implicit support for Biden’s “Summit of the Democracies” strategy for countering China. In short, the symbolism was more important than the actual substance for achieving this goal.

Hammering out the details of the power generation agreement and expanding on the scope of the green finance commitment eluded the G7 leaders at this meeting due to a lack of confidence, especially among the three leaders from Continental Europe, that detailed and expanded agreement will stick. There are three levels of doubt contributing to this lack of confidence.  In order of ascending importance, there is:

  • Uncertainty over how Biden and his National Security Council deputies Kurt Campbell and John Kerry are going to square heightened competition with China in the technology space with attempted renewal of cooperation with China in addressing climate change;
  • Doubt over the ability of the Administration to get its proposals through a closely-divided and highly-partisan Congress; and
  • Concern that the American public’s fling with climate science denial and Trumpian America First thinking might not be a one-time affair and could come to the fore again in the 2022 mid-term election and the 2024 Presidential election.

Given these doubts, any effort to provide substantive detail for the power generation agreement and to expand the green financing agreement would have been prone to failure and could have undercut the paramount goal of projecting renewed G7 solidarity and democratic unity.  Looked at from another angle, this result shows how much effort and hard work will be required to reestablish the global momentum toward 2050 climate goals following Trump’s decision to pull America out from the Paris Accord Conference of Parties (COP) process.

On May 27th speaking at the annual Stanford University Oksenberg Conference, Kurt Campbell, Biden’s National Security Council Coordinator for Indo-Pacific Affairs, delineated the new ‘continental divide’ in U.S.-China Relations.

The period in U.S. policy toward China that was broadly described as ‘engagement’ has come to an end, said Dr. Kurt M. Campbell, deputy assistant to the President and coordinator for Indo-Pacific affairs at the National Security Council, speaking at Shorenstein APARC’s 2021 Oksenberg Conference. “The dominant paradigm is going to be competition. Our goal is to make that a stable, peaceful competition that brings out the best of us,” he added.

This low-key pronouncement is attention-grabbing for several fundamental reasons: (1) it marks the end of a 39-year bipartisan effort to encourage China to become, through a concerted program of cooperative outreach, a “responsible stakeholder” in the post-WWII liberal democratic world order and (2) the epitapth was delivered by one of the principal architects of that cooperative program.

To back up this somewhat sweeping statement on my part, I’ll be spending the weeks ahead examining what this sea-change portends from three perspectives:

Aspirationally …

On Mondays, we’ll be looking at various aspects of what heightened competition with China will look like for the Biden Administration in the tech sphere. This will include high-level perspectives of competition in artificial intelligence and robotics; sourcing of rare earths needed for smart phones, electric vehicles and other high-tech products; 5G build-out in domestic and international markets; quantum computing competition; the Great Firewall of China as an export product to Belt & Road partners countries; and social media platforms and data privacy issues. But most saliently, we’ll be looking in-depth at global supply chains in microelectronics and the fraught issue that 40% of the world’s microchip production — and 80% of its high-performance products — are produced in Taiwan at a distance of only 90 miles from the PRC mainland.

On Wednesdays, we’ll be examining the fields of energy and environment where cooperation still rules the day under Cabinet-level John Kerry’s aegis but where cooperation is shifting from a government-to-government level to a more market-based model of comparative advantage cooperation.

On Fridays, we’ll be examining what these changes look like from the Chinese perspective. Our sources for this perspective — what cultural anthropologists call the emic (in-group) view as opposed to the etic (outside observer) view — will include macro-perspectives such as the Five Year Plans, primary-source research findings provided by my UPenn masters-level students, and also micro-perspectives such as interviews and insights gleaned from business people operating on the ground in China.

My heart-felt thanks go out to the many subscribers who have been with me on the journey to date. I look forward to welcoming hopefully many others choosing to subscribe to the blog for this next leg of the journey.

The motto of the Woodrow Wilson International Center for Scholars is ‘knowledge in the public service.’  This publication of mine from September 2012 is made available to the public free of charge here by downloadable PDF.

Book Cover

INTRODUCTION

At the time of my initial appointment to the Wilson Center, it struck me that something was missing from the general discussion in the United States concerning China’s embrace of clean energy and its implications for the United States. Much of what had been written embraced one of two polar positions. It seemed that the U.S.-China relationship in clean energy was either the best avenue for our cooperation or the measuring stick for our final competition. To a casual but concerned reader, the message was confusing. Newspaper “word-bites,” rather than informing discussion, lent anxiety to the existing confusion. The Woodrow Wilson Center provided me time and resources to examine the facts about clean technology (“cleantech”) and China. This was timely. Government agencies, think tanks and trade associations hoping to influence the policy debate began in February 2009 to release a spate of lengthy and in-depth policy reports, many of them technical in nature. We will learn in Chapter One how and why that gusher of information—which has thrown up literally shelf-feet of reports over the past year and a half— suddenly arose. However, for the purposes of this Introduction, it is simply worth noting that these policy tomes, for all that they did serve to provide data-based context to what had previously been “context-free” highly combustible reporting, did not offer much help to an interested non-specialist in making better sense of the main issues. At this “informed” end of the information spectrum, there was now almost too much information spread across too many specialized viewpoints. For a busy entrepreneur, investment manager, business professional, state or local government official, regional economic development analyst, scientific researcher, or engaged student—in fact, for any concerned “global citizen” wanting to understand the issues in a straightforward and streamlined way— it was famine or feast. A super-abundance of highly-specialized information provides not much more help in gaining an efficient grasp of the core issues than scattershot newspaper and media reporting had offered. Sustaining U.S.-China Clean Energy Cooperation 3 This book aims squarely at the “middle ground” of curiosity and interest in this broad topic. At the outset, I would like to be clear about three “operating assumptions” I have built in: Timeframe The three main chapters are concerned with the three-year period from mid-2008 to mid-2011. Except for one digression involving Five Year Plans which covers a 30-year period, this limitation on perspective actually helps bring the main subject matter into better focus. The bulk of the U.S. political effort to engage with China in the clean energy arena took shape during the 2008 Presidential Campaign and was further framed through policy initiatives of the Obama administration. For a new industrial ecosystem like “cleantech” or clean energy, what is relevant is defined by what has most recently happened. It is only in the Conclusion that the time-frame is pulled back to show that some of the dynamics described in preceding chapters are, in fact, related to deeper and more long-standing trends in the overall U.S.-China relationship. Structure As author, I have insisted on an organizational principle for presenting information which puts me at odds with the conventional approach of “Beltway” experts. In Washington, the tendency is to run all relevant information through what I will call the “policy blender” and to present the resulting product as a mix of policy recommendation, policy analysis, and policy refutation. I take a different approach. I believe that the policy process is best served when the three main aspects of business-relevant policy are broken down and viewed separately in their own right. These are: (a) the politics underlying the policy process; (b) the technology innovations which policy initiatives aim to support; and (c) the investment ultimately required to take any technology innovation to scale in the marketplace, thereby driving policy on a long-term and sustainable basis. Rather than jumble these perspectives, I treat them in Merritt t. Cooke 4 separate chapters and try to adopt the relevant “mind-set” of each in presenting material in the respective chapter. This may be nothing more than a reflection of my former training as a cultural anthropologist, but I believe it is useful—within the complex arena of China, the United States, and energy—in revealing underlying dynamics. For this reason, in the U.S. section of the opening chapter on Politics, I will rely heavily on the words of key political actors. Ours is a system where the president needs to persuade the electorate and what is said matters. In the section on Chinese Politics, the approach is different, relying instead on “structural analysis” of the ruling party and its interests. In each case, the attempt is to adopt a perspective particularly suited to its subject matter. Purpose The Woodrow Wilson Center’s motto is “knowledge in the public service.” Woodrow Wilson epitomized the ideal of the “practitioner scholar”—the part-time scholar who devotes some of his or her career to bringing scholarly research into the practical, socially-relevant domains of government or business or non-profit work. This is the spirit with which I have written this book. I am neither a career academic nor a professional policymaker. I have tried to make this book clear and concise, although it involves a complex, and fast-changing topic. Especially for technically inclined readers, I want to acknowledge that no sector domain in the U.S.-China clean energy field can be adequately reduced to a couple of pages. I believe this topic is an important one. If the United States and China find a way to realistically base and sustain their cooperation in clean energy, they will be addressing directly 40 percent of the world’s total carbon emissions. And if together they manage to create a replicable model of cooperation, they can indirectly help the world address the remaining 60 percent. At its core, this topic touches everyone—those who care deeply about America’s place in the world, those who are moved by China’s epochal reemergence, those who are environmentally-engaged, and those who are responsible global citizens. Students are a particularly important audience because the tectonic issue described in this book will ultimately be the felt experience of their generation. In short, I hope that this book may be found to present important issues in a balanced way and to offer something useful and readily comprehensible to anyone with enough interest to pick it up.

View the Wilson Center’s Book Launch Event here

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