The coal industry and others with an interest in playing down climate change like to point out that China has been investing in the equivalent of a coal-fired power station a week, so what’s the point of taking action at home?
Well, that equation has suddenly been turned on its head. Not only has China halved thermal coal imports, and could stop them altogether in a few years (as could India), the new climate deal announced with the US this week means that it has engaged to build the clean equivalent of a coal-fired power station a week for the next 15 years.
But it won’t be coal, it will be solar, wind, and hydro. The undertaking to provide 20 per cent of its electricity through renewables by 2030 means, according to the White House, an additional 1,000GW (one million megawatts) of clean energy for China. That’s the equivalent of 1.3GW of wind, solar and hydro a week – or the entire US grid.
As investment bank HSBC noted this week, this is a momentous deal, and one that is likely to inspire countries to follow, particularly in the lead up to the Paris climate talks next year.
While “carbon ostriches” such as Australia and Canada, with the support of the fossil fuel industry, have been busy acting against climate action, HSBC says suggests that other countries are more likely to follow the example of the “carbon elephants” rather than the “carbon ostriches”.
“We believe this China-US bilateral deal increases the pressure to submit ambitious pledges for other top ten emitters such as India and Brazil, as well as countries that have chosen to bury their heads in the sand such as Australia and Canada,” it notes in a new report.
HSBC says that a China-US deal on climate is not surprising, because it had been clear that such a deal has been brewing since the formation of the US-China Climate Change Working Group in April 2013.
“However, its timing is important because now the world’s three largest emitters (China, US, EU) which account for well over half of global emissions, all have post-2020 emissions reduction pledges in place.
“Other countries (vis Australia and Canada) now have fewer excuses not to put forward ambitious pledges after Lima,” it notes.
But it says that while the carbon “elephants” of China and the US have provided positive momentum on climate change – Australia and Canada appear to have been trying to dampen this momentum – by working separately on fossil fuel exports.
“Given that fossil fuel exports accounted for over a quarter of total exports in Australia and Canada in 2012, we think these two countries should be positioning their economies for the low-carbon future, especially if they hope to export to more carbon-constrained countries,” HSBC says.
And to reinforce the point, in the context of Tony Abbott saying that he didn’t want climate change to “clobber the economy”:
“We think they are ‘right’ – because climate change regulations and a global deal to limit warming to 2°C won’t clobber the economy over the long term.
“China and the US clearly see the long-term economic benefits of putting in place climate change frameworks and positioning themselves for the global low-carbon economy of the future.
“We believe Australia and Canada risk being left behind by the global momentum on climate change whilst seeing their economic exposure to carbon-constrained countries – through fossil fuel exports – increase.”
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