Climate Change & The New Silk Road

-Chinese President Xi Jinping discusses the new Silk Road with German officials.

As America heads to the mid-term elections next month, coming efforts to address global warming hang in the balance.

Will President Obama be able to implement his own ban on future coal power plants in the U.S. next year?

Will the next Congress act to put a price on carbon, which environmentalists and economists insist is necessary to head off runaway warming?

Finally, will the U.S., the second biggest emitter of greenhouse gases, be able to join with China, the biggest emitter, at the 2015 Paris climate talks to lead toward an effective solution to what many scientists call the biggest challenge of our time?

One thing is clear. China will be watching the election closely and already is hedging its bets.

Since last summer, Chinese officials have been discussing placing a national cap on carbon emissions and carbon pricing in the next five-year plan, which is to be in place by 2016. Already, China is testing carbon pricing in five separate subnational markets.

In another sign of moving to become less tied to the U.S., China’s President Xi Jinping is pursuing a Eurasian economic block, which he outlined in his visit to India last month. In The Hindu, he advocated a new “Silk Road Economic Belt and the 21st Century Maritime Silk Road” to create “sustainable growth of the Asian economy.”

Pepe Escobar explains the geopolitical implications of a new Silk Road in Tom Dispatch, in which he envisions how the growing economic alliance between Beijing and Moscow, including the big natural gas supply deal signed earlier this year, ultimately could draw in Berlin as it becomes more independent of the U.S. amid its substantial economic ties with Moscow, as highlighted by the Ukrainian crisis.
Escobar writes:

“In this sense, though you wouldn’t know it if you only followed the American media or “debates” in Washington, we’re potentially entering a new world. Once upon a time not so long ago, Beijing’s leadership was flirting with the idea of rewriting the geopolitical/economic game side by side with the U.S., while Putin’s Moscow hinted at the possibility of someday joining NATO. No longer. Today, the part of the West that both countries are interested in is a possible future Germany no longer dominated by American power and Washington’s wishes.”

This may be only natural given the 200-year plus history of relations between China and the imperialist Anglo-American alliance, in which the British unleased canons and gunboats on the Chinese to block its efforts to ban sale of opium brought by English merchants. China’s leadership, note Andrew J. Nathan and Andrew Scobell in a 2012 Foreign Affairs article that now seems prescient, sees that:

“The United States uses soothing words; casts its actions as a search for peace, human rights, and a level playing field; and sometimes offers China genuine assistance. But the United States is two-faced. It intends to remain the global hegemon and prevent China from growing strong enough to challenge it. In a 2011 interview with Liaowang, a state-run Chinese newsmagazine, Ni Feng, the deputy director of the Chinese Academy of Social Sciences’ Institute of American Studies, summed up this view. “On the one hand, the United States realizes that it needs China’s help on many regional and global issues,” he said. “On the other hand, the United States is worried about a more powerful China and uses multiple means to delay its development and to remake China with U.S. values.”

They continue:

“In the eyes of many Chinese analysts, since the end of the Cold War the United States has revealed itself to be a revisionist power that tries to reshape the global environment even further in its favor. They see evidence of this reality everywhere: in the expansion of NATO; the U.S. interventions in Panama, Haiti, Bosnia, and Kosovo; the Gulf War; the war in Afghanistan; and the invasion of Iraq. In the economic realm, the United States has tried to enhance its advantages by pushing for free trade, running down the value of the dollar while forcing other countries to use it as a reserve currency, and trying to make developing countries bear an unfair share of the cost of mitigating global climate change. And perhaps most disturbing to the Chinese, the United States has shown its aggressive designs by promoting so-called color revolutions in Georgia, Ukraine, and Kyrgyzstan.” [Now we can add Ukraine.]

The implication for the upcoming climate talks in Paris could be that they will mark a turning point in which China goes its own way on climate change. If that happens, depending upon the outcome of the U.S. election next month, China could soon outpace the U.S. when it comes to cutting emissions.


Australia Fears China’s Clean Air Policies


Clive Palmer, leader of Australia’s United Party.


In a positive development, coal production in China has declined and the price of the dirtiest of fuels has gone up as a result.

Bloomberg’s Sarah Chen reported September 29 that the price of coal rose for the first time in China since June under the government’s policy to trim output by 5 percent, boosting the price from 475 to 480 yuan. That’s $78.20 a ton, compared to $56.50 for Appalachian coal and just $10.87 a ton for Western coal in the U.S. Some market analysts expect coal in China to hit 555 yuan ($89.59) by year’s end, particularly as winter demand picks up.

Coal mining companies that violate the government’s limitation on output face fines of up to 2 million yuan (about $376,000).

Business Week reports the cutback in China threatens coal production in Australia, which has China as its chief export market. China buys 25 percent of Australia’s coal exports, or some 50 million tons a year.

But it doesn’t stop there. China is seeking to cut coal imports 15 percent, which also could hit Indonesia and the U.S. where export tonnage to Asia in the first half of 2014 fell 2.3 percent, according to EIA.

In Australia, China’s policy to cut coal use is causing a political backlash, prompting Clive Palmer, leader of Australia’s United Party, to rail on TV that “Chinese mongrels . . . want to take over our ports and get our resources for free.”

While Palmer later apologized for his impolitic remark against his nation’s biggest trading partner, the incident demonstrates how policies to clean up the air can have far reaching effects.