United Nations talks aimed at forging fresh commitments on the road to a new green economy are looking like they’ll be overshadowed by a series of old-economy energy crises.
A snag emerged on Friday when the leader of the largest greenhouse gas emitter, China’s Xi Jinping, served notice he is unlikely to attend the summit in person. This as China grapples with rolling blackouts and a coal shortage that have forced factories to close and citizens to worry about the lights staying on.
British organizers of the COP26 summit in Glasgow, Scotland, set to start in two weeks, were said to be concerned that the snub could mean China may refuse to set new climate targets, according to the Times of London, which first reported the development on Friday. It said Prime Minister Boris Johnson had been informed that Mr. Xi backed out.
Plans could change, but if they don’t it could be seen as a blow to hopes for a concerted effort on the climate front.
Already, it was looking like the meeting, aimed at pushing closer to a decarbonized economy, was taking on an undercurrent of energy supply worry. Countries in Europe and Asia are struggling to cope with fossil fuel shortages and price spikes that threaten the global recovery. North American consumers are staring at a costly winter as gas demand and prices jump.
The Economist proclaimed the world has been plunged into “the first energy shock of the green era.” It’s dramatic phraseology, but what today’s disruptions in gas and coal supplies, as well as surging oil prices, expose is that the low-carbon energy era is still in its infancy as countries recover from the pandemic-induced slowdown.
There is an energy transition afoot. Tens of billions of dollars are being directed to it in both public and private investments. But it is clear that there is no quick and easy switchover yet to solely emission-free alternatives for home heating and transportation. All the necessary infrastructure is still being pieced together.
None of it should deter world leaders, as they gather in Scotland, from making serious new commitments in the race to get to net-zero carbon emissions by 2050 in hopes of staving off the worst impacts of climate change. In fact, the energy mess should serve as an incentive for them to hammer out the necessary plans to invest in the technology needed to reduce reliance on carbon-heavy energy.
To be sure, a no-show by Mr. Xi would come at fraught time. Event organizers and leaders hope to project solidarity. In a positive sign, Australian Prime Minister Scott Morrison, who has so far resisted imposing tough emissions targets at home, said on Friday he would attend the meeting.
But China is the whale. It emits as much as 28 per cent of the world’s total greenhouse gases, nearly double the United States’ share, and Mr. Xi has been keen to show it is serious about fighting climate change. The country aims to achieve carbon neutrality before 2060, and a major part of that includes cutting coal-fired generation to five per cent of the grid from 60 per cent.
As today’s woes show, China very much relies on coal – mining it, importing it and burning it. Prices have surged as imports have tightened and the government maintained artificially low electricity rates. This has triggered rolling blackouts in some regions and forced factories to suspend operations at times. Officials have tried to calm fears among people that they won’t be able to heat their homes this winter.
In any case, China is unlikely to agree to tougher emission targets, given its already daunting challenge, said Gordon Houlden, Director Emeritus of the University of Alberta’s China Institute and a former diplomat who was posted in China. However, concerns about Mr. Xi’s security and the danger of contracting COVID-19 likely loom as large in a decision to keep the man who holds the most clout in the country at home, he said.
“He would go there and listen to all these complaints about emissions broadly – the Americans won’t be shy pointing out where the biggest problem lies. On balance, it’s ‘What’s in it for us? Let’s show up with a delegation, but is it worth having our top leader take the risks of travelling internationally and going to meetings?’ ” Prof. Houlden said.
China is just one energy-disruption hot spot. In Europe, natural gas prices have surged owing to several factors, including depleted stockpiles, reduced supplies from Norway and limited ability to get more from Russia. Asia has been hit by skyrocketing prices for liquefied natural gas cargoes, partly because of increased demand from China as it tries to cope with its power crunch.
These are not long-term problems, but the latest example of cyclical traditional energy supply and prices. They will be ironed out eventually as the market devises solutions and directs investments where needed.
The climate crisis is not cyclical. It requires sustained effort and investment over the next three decades, and integrating cleaner energy sources and extracting carbon from existing ones remain key to doing so. Hopefully one country’s focus on current struggles won’t put a damper on the resolve among the rest to take the next steps.
Jeffrey Jones writes about sustainable finance and the ESG sector for The Globe and Mail. E-mail him at firstname.lastname@example.org.
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