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“Nearly two-thirds of Americans believe the federal government should act more aggressively to combat climate change, and almost as many say the problem is already affecting their community in some way” according to a Pew Research Center survey released on June 23rd this year.

While Democrats and Republicans diverge sharply over the question of whether human activity is contributing “a great deal” (72% Democrats vs 22% Republicans) or only “some” (22% Democrat vs 43% Republicans) to climate change, strong majorities of both parties recognize the human contribution and want the government to do more about it.

The story of this post goes back some twelve years. It’s a story of how bipartisanship and cooperative outreach can lead change. It shows what can be achieved when we focus, with a grounding in science, on the common good.  We’re not doing that successfully now with COVID-19.  We’re not doing it successfully now with climate change either  But it’s within reach to do better.

As the second term of the George W. Bush Administration was winding down, Treasury Secretary Hank Paulson sensed drift in the U.S.-China relationship. An avid birder and a passionate outdoorsman, Paulson found himself drawn to the environment as a possible new basis for cooperative engagement with China.  If sufficient trust could be generated between the U.S. and China – especially among the career administrators responsible for climate policy in both countries – the quarter-century logjam that had impeded global action on climate change might free up.

What was that logjam?  Ever since the mid-1970s, when the United Nations had first identified climate change as a long-term economic and political threat to the community of nations, the United States and China had never seen the issue eye-to-eye.  The U.S., acting as the de facto leader of the developed nations, wanted joint action with the developing nations but didn’t want the developed nations to be forced to shoulder most costs.  China, as de facto leader of the developing nations, wanted joint action but insisted the developing nations should foot most of the bill.  Their argument, somewhat disingenuous but appealing in its simplicity, used a restaurant tab as an analogy.  Why should developing nations, who had come late to the industrial revolution party, be splitting the bill for all the courses when they had only participated in the post-WWII dessert course?  (The ploy buried in this argument is, of course, that the rates of consumption and carbon output of the post-WWII phase of industrial development outstripped significantly the previous century on a cumulative basis and the developing nations were on course to grow their consumption and carbon output in coming decades while developing nations were moderating theirs).  In any case, this divergence of approach led directly to the breakdown of the Kyoto Protocol in 1999 (and also to the less consequential but unseemly debacle between President Obama and the Chinese delegation at the COP20 (20th UN Conference of Parties) meeting in Copenhagen in 2009).

So against this background, Secretary Paulson traveled to Beijing for discussions with his Chinese government counterparts about a new framework for coordination on global economic issues, resolution of trade disputes and strategic cooperation to mitigate climate change. While on that trip, Paulson traveled with his China-hand Deputy Chief of Staff, Taiya Smith, to Lake Qinghai to see first-hand the condition of that world-heritage lake and its wetland bird habitat.  At the water’s edge, Paulson picked up some beverage cans and plastic bottles discarded there by fishermen and tourists. The Chinese officials traveling with him were surprised and impressed to see a Cabinet-level U.S. official stoop, literally, to help clear a Chinese lake of trash.  In that moment, a ten-year run of strategic cooperation on clean energy and the environment between the U.S. and China was launched.

Over the past two academic years, I taught a masters level course for the University of Pennsylvania’s International Masters of Public Administration with the official Ten Year Framework (TYF) for U.S.-China Cooperation on Energy and Environment as the focal case-study.  I could say a lot about it but, for the purpose of this post, I have only a single point to make.

The TYF is a case-study in the hard work of cooperation.  Launched in late 2008 by a Republican administration, handed off post-inauguration to the Obama Administration in early 2009, and then officially signed by President Obama and President Hu Jintao in November 2019, the first four years of the TYF created a “safe place” – beyond the prying eyes of the press and partisan grandstanders — where officials from the U.S. and China could educate each other about what might be possible and what would be perilous to undertake in their respective administrative and political systems. In short, they learned to trust one another to move in a common direction. The result of this four years of hard work was another official public act by President Obama and the new Chinese President, Xi Jinping, in November 11, 2014.  The two presidents announced with fanfare that, for the first time in over forty years, the U.S. and China were ready to work together to lead the world towards a climate change agreement.  Once that announcement was made between the U.S. and China, all it took was thirteen more months for over 190 other nations to join with the U.S. and China in agreeing to the Paris Accord at the COP21 meeting.

The TYF is a lesson in leadership or, more precisely, co-leadership.  But it’s over.  What relevance does it have in August 2020?  Less than six months into his Presidency, President Trump announced the withdrawal of the U.S. from the Paris Accord.  Now, in the lead-up to the November elections, each day brings a new low in U.S.-China relations.  As someone who was serving at the U.S. Consulate General in Shanghai before, during and after Tiananmen, I feel able to make the assessment that we are now at a lower point in the U.S.-China relationship than we were even then.  The question is where to do we go from here?

That question is valid and complicated where our relationship is deeply fraught – advanced technology and global supply chains, minority rights in Xinjiang, political space for Hong Kong and Taiwan, military build-ups in the East and South China Seas – but the question is much simpler where our national interests are clearly aligned – in leading the world’s transition to lower-carbon energy in order to build resilience and mitigate climate change for the planet.  Either the U.S. cedes a mega-industry of the future to China along with leadership of the Paris Accord community of nations or the U.S. steps forward again on the global stage with its unparalleled technology leadership and with renewed political vision.  What will this look like?  It will look like working with allies and not against them. It will involve not just supporting the planting of a billion trees globally and helping Big Coal capture and sequester carbon emissions underground but marshaling across-the-board governmental support to spur innovation across the entire spectrum of low-carbon solutions. It will require us to re-enter the Paris Accord and re-learn how to work productively with China in that particular arena while holding China to account in the many other arenas where our interests are at loggerheads.

Trump’s announcement of U.S. withdrawal from the Paris Accord was on June 1, 2017.  The framers of the Paris Accord, mindful of political cross-winds that can blow in the U.S. and elsewhere in the world, included an Article 28 requirement that a four-year waiting period pass before any country’s withdrawal could be formalized.  The date kicking off that waiting period for the U.S. is November 4, 2016, the day on which the Obama Administration secured ratification by Congress of U.S. entry into the Paris Accord.  So, U.S. withdrawal cannot under any circumstance become official until the day after the upcoming November 3rd election in the U.S.

So there’s the Sixty-Seven Percent solution. With nearly two-thirds of Americans believing the federal government should act more aggressively to combat climate change and with the Paris Accord signatories able to be flexible and eager to welcome a Biden-led America back into the Accord, it’s time for a majority to stand up again in unison.  For each of our poor souls, for our country, for the community of nations and for the planet.

E pluribus (67%) unum.

 

 

 

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

Crackdown or Startup w border

 Henry “Hank” Paulson — former Chairman of Goldman Sachs, former Secretary of the U.S. Treasury and creator of the U.S.-China Strategic & Economic Dialogue — was in Philadelphia last Wednesday.  He came to publicize his new book Dealing With China: An Insider Unmasks the New Economic Superpower.

The media frame for the talk and Q&A which he gave to the World Affairs Council of Greater Philadelphia was:  ‘Hank, you’re a real patriot. Why are you helping China?”

In response, Hank Paulson was very clear that his interest in promoting a better understanding of China is rooted in his desire to do what is best for America.

You can read the full article here but, for the purposes of this post, I’m going to focus on one small, but important, piece of the big contemporary China puzzle:  Is Xi’s ongoing crackdown (on corruption but also on foreign businesses, NGOs, press freedoms, social media, connectivity to the global knowledge-pool, etc) flashing green, yellow or red for China’s paramount challenge of rebooting its economy on a more sustainable basis?

China’s ‘old software version’ of infrastructure build-out, inbound investment and export of cheap stuff is clearly no longer operating smoothly on the new global hardware system.  China’s future – and Xi Jinping’s for that matter – depends on a smooth updating to a ‘new software version’ of consumer-led spending, outbound investment and innovation up the product value-chain.   Under any circumstances, that’s a tall-order to pull off in just a few years.  For those of us who believe that helping China matters to America’s future, the key question is whether the crackdown on political thought in China is – or is not — inimical to the desperately needed surge of commercial innovation needed to upgrade China’s economy to version 2.0.

It is perhaps not entirely a coincidence that, in the same week that Hank Paulson was wrestling with this question in Philadelphia, so were two other leading experts on the trajectory of China’s globalization elsewhere:  Shaun Rein and Tom Friedman in respective articles.  If Hank Paulson occupies the pivot point as a U.S. patriot committed to helping China, Shaun Rein is a self-acknowledged China booster and Tom Friedman a “color me dubious” observer of China’s steep road ahead to globalization.

Here’s what each of them has had to say over the past week on the ‘sword of Damocles’ question facing Xi and China:  crackdown or start-up?  (Click on the name below in order to source the original publication from which the following excerpts are taken):

Hank Paulson

Paulson

“Paulson believes the Communist Party has reached a simple accord with the Chinese people: prosperity in return for continued state control. The question, of course, is whether China can have it both ways – economic freedom without cultural freedom, a subject I raised with Paulson at the World Affairs Council.

‘In today’s information economy, I don’t know how economies can innovate and do the sorts of things they do to stay on top without having a free flow of ideas and information,” Paulson replied. “I’ve run a global company, and, boy, you need to be connected. You can’t have an Internet that’s not connected. You need to know what’s going on politically, regulatory systems, economically, in terms of ideas all over the world.’

He added: ‘But understand what’s going on right now. Xi Jinping . . . is focusing on the things that the people care about the most. So, corruption. He recognizes the party won’t survive unless he curbs corruption. So he’s focused on corruption, the environment, dirty air, and water.’

“So . . . managing China, just think what it’s like because they have to deal with the kinds of issues that afflict developed countries at the same time they have to deal with issues that developing countries are dealing with because a big part of the country is still poor. It would be like, . . . looking at Europe, Germany and Slovenia. They are both European, vastly different stages of development, they need different economic policies. So think about managing both of those in a single country under one party, and I mean that’s sort of the challenge.’”

 Shaun Rein

rein-circular

“China´s much needed anti-corruption drive has now put the country into a lock-down mode, and new projects have halted,” tells business analyst Shaun Rein at CNBC.  “The cut in the reserve ratio ratio (RRR) this weekend is one way for a kickstart, although nobody know what will really work.”

 China Herald:  “What does the Chinese market need to stimulate the economy and if this growth continues to disappoint then would you expect an additional benchmark rate cut in the next couple of quarters, something that many experts are now talking about?”

Rein:  “I think what we need to look at is not gross domestic product (GDP) growth but we need to take a look at unemployment and the second reason why I am more concerned about the economy is in the last month urban unemployment has been hovering around 5 percent – that’s really a problem. So the unemployment rate in areas of manufacturing are still fairly strong and you can easily stimulate that by forcing state owned enterprises to do heavy investment; train construction, airport construction and you can get jobs there but the issue is urban unemployment is weak and there aren’t a lot of easy remedies. The government is trying to switch from manufacturing oriented economy more towards one of technology and innovation as I outlined in my new book ‘The End of Copycat China’ but it is not easy to do that. You cannot get companies that are producing things all a sudden to become innovators, so there is definitely going to be some weakness, some problems in the economy over the next three-four months and frankly there are no easy answers on how they stimulate the economy.”

Tom Friedman

friedman-circular-thumbLarge-v3

“Americans … are asking of President Xi: “What’s up with you?” Xi’s anti-corruption campaign is clearly aimed at stifling the biggest threat to any one-party system: losing its legitimacy because of rampant corruption. But he also seems to be taking out potential political rivals as well. Xi has assumed more control over the military, economic and political levers of power in China than any leader since Mao. But to what end — to reform or to stay the same?

“Xi is “amassing power to maintain the Communist Party’s supremacy,” argued Willy Wo-Lap Lam, author of “Chinese Politics in the Era of Xi Jinping: Renaissance, Reform or Retrogression?” Xi “believes one reason behind the Soviet Union’s collapse is that the party lost control of the army and the economy.” But Xi seems to be more focused on how the Soviet Union collapsed than how America succeeded, and that is not good. His crackdown has not only been on corruption, which is freezing a lot of officials from making any big decisions, but on even the mildest forms of dissent. Foreign textbooks used by universities are being censored, and blogging and searching on China’s main Internet sites have never been more controlled. Don’t even think about using Google there or reading Western newspapers online.

“But, at the same time, Xi has begun a huge push for “innovation,” for transforming China’s economy from manufacturing and assembly to more knowledge-intensive work, so this one-child generation will be able to afford to take care of two retiring parents in a country with an inadequate social-safety net.

“Alas, crackdowns don’t tend to produce start-ups.

“As Antoine van Agtmael, the investor who coined the term “emerging markets,” said to me: China is making it harder to innovate in China precisely when rising labor costs in China and rising innovation in America are spurring more companies to build their next plant in the United States, not China. The combination of cheap energy in America and more flexible, open innovation — where universities and start-ups share brainpower with companies to spin off discoveries; where manufacturers use a new generation of robots and 3-D printers that allow more production to go local; and where new products integrate wirelessly connected sensors with new materials to become smarter, faster than ever — is making America, says van Agtmael, “the next great emerging market.”

“It’s a paradigm shift,” he added. “The last 25 years was all about who could make things cheapest, and the next 25 years will be about who can make things smartest.”

President Xi seems to be betting that China is big enough and smart enough to curb the Internet and political speech just enough to prevent dissent but not enough to choke off innovation. This is the biggest bet in the world today. And if he’s wrong (and color me dubious) we’re all going to feel it.”

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