Wealthy Countries Gear Up against Fossil Fuels Preparing for COP 28

Biden’s State Department announced a deal with its Chinese counterparts pledging to “accelerate the substitution for coal, oil and gas generation” with green energy sources such as wind and solar power. They also agreed to “deepen policy exchanges” on reducing carbon emissions in sectors, such as power, industry, buildings and transportation. The beneficiary of such deal making, however, is China, who has rarely followed through on international accords and stands to financially benefit from the agreement since it dominates the world’s green energy supply chain. France, with backing from the United States, is seeking to halt private financing for coal-based power plants during COP 28, which both India and China oppose. COP 28 is this year’s annual U.N climate conference, which takes place from November 30 to December 12 in Dubai, where luxury hotels are being sold out as 70,000 descend.

Biden’s Agreement with China Hurts Americans and National Security

The Biden agreement with China was finalized during Special Presidential Envoy for Climate John Kerry’s meeting with Chinese Special Envoy for Climate Change Xie Zhenhua in California, shortly before President Biden met with Chinese President Xi Jinping in San Francisco. It is a win-win for China as the country will continue to build coal plants and benefit from U.S. purchases of its green energy products such as solar panels and EV batteries as well as critical minerals needed for defense and energy products. It will cost American consumers more as renewable products are more expensive overall and it will harm U.S. national security as the United States is the largest global producer of oil and gas which drives every major U.S. industry.  It is clearly a one-sided deal.

Chinese companies have established a major foothold in green energy markets. China produces about 75 percent of the world’s lithium-ion batteries, a key component of electric vehicles (EV) and 70 percent of production capacity for cathodes and 85 percent for anodes, two key parts of EV batteries. In addition, more than 50 percent of lithium, cobalt and graphite processing and refining capacity is located in China, which are necessary to make the minerals useful. The three critical minerals, in addition to copper and nickel, are vital for EV batteries and other green energy technologies. Chinese firms have also purchased stakes in African mines to control mineral production. China has a greater than 80 percent share in all the manufacturing stages of solar panel manufacturing and produces 95 percent of all global polysilicon, ingot and wafer supplies needed for solar products. Its massive control of these materials puts the country in a position to manipulate markets, thus making it more difficult for upstart industries in other countries, including the United States.

China has already expanded its coal power fleet to sustain its massive economy, by providing cheap and reliable power. Its coal generators can easily operate for 40 to 60 years. In 2022, the nation permitted a 106 gigawatts of new coal power capacity, roughly quadrupling the amount permitted in 2021, and it has been building two coal plants per week. The agreement also includes the United States and China each advancing five large-scale carbon capture, utilization and storage projects by the end of the decade. Carbon capture is an expensive technology that is not currently commercially available, designed to catch a power plant’s carbon emissions. It has not been successfully deployed at any U.S. power plant.

China is responsible for about 27 percent of global greenhouse gas emissions, about triple the total emissions of the United States, which is the world’s second-largest emitter. China consumes more coal than the rest of the world combined.

France’s Plan to Halt Financing for Coal Plants

France’s proposal provides for the Organization for Economic Co-operation and Development (OECD) to set coal-exit standards for private finance firms, whose financing could be tracked by regulators, rating agencies and non-governmental organizations. The United States, European Union and Canada want a plan to expedite the phase-out of coal, which they cite as the “number one threat” to climate goals. They are concerned private international financing continues to support large additions to coal capacity in developing nations. About 490 gigawatts of new coal capacity, roughly equal to one-fifth of existing global capacity, is planned or under construction, mostly in India and China.

About 73 percent of the electricity consumed in India is produced using coal, despite the country having increased its non-fossil capacity to 44 percent of its total installed power generation capacity. Wind and solar power have low capacity factors, resulting in a third or a half of the electricity that the equivalent fossil fuel capacity produces. So, India will resist the push to fix a deadline for a fossil fuel phase-out or phase-down at COP28, as coal will be its main energy source for decades, and it may ask members to shift their focus on reducing emissions from other sources.

India may also push developed nations to become carbon negative rather than carbon neutral by 2050. According to one of India’s government officials, “The rich countries should become net negative emitters before 2050 to enable the world to achieve the target of global net-zero by that year while allowing developing nations to use the available natural resources for growth.” Developed countries including the United States, Britain, Canada and Japan are targeting net zero by 2050. China has committed to net zero by 2060 and India by 2070.

Conclusion

Wealthy countries are gearing up for COP 28, trying to convince countries into committing to net zero by 2050 by substituting renewable energy for fossil fuels. The Biden Administration met with China in California and is pushing climate policies that will effectively destroy the U.S. energy industry in favor of green energy initiatives that rely on China’s production of solar panels and batteries. China, however, will continue to use what’s best for its economy and people. So, the Biden administration is basically writing an agreement that guarantees China a customer and guarantees its manufacturing sector decades of purchases of green energy products and minerals. Since China will ignore any obligation it dislikes if history is a guide, Biden’s agreement is basically providing China with decades of wealth, while guaranteeing America is going to buy its products.  In return, the American public is left with higher energy bills with no real commitment. Biden’s energy policy is China first, America last.