Commentary on Political Economy

Saturday 16 October 2021

 In a paper published this week Jun Arima of the University of Tokyo sounded the alarm over how events are playing into China’s hands. Arima is one of Japan’s most experienced climate-policy diplomats, having represented Japan at 15 previous UN climate conferences including several as a senior negotiator and a lead author of the IPCC Sixth Assessment Report.

Arima argues the net-zero agenda being urged on the world fatally damages the pragmatic and fragile consensus achieved in 2015 with the Paris Agreement, setting the West against the developing world, to the benefit of the CCP.

“The net-zero climate policies are creating a divided and acrimonious international environment that will permit China to greatly enhance its global economic presence and political influence, while the developed, democratic world becomes weaker in every way,” Arima writes.

He says dramatic emissions-reductions pledges in the West are irrelevant without corresponding reductions in the developing world, but China, India and Russia, which account for nearly 40 per cent of world emissions, have not made relevant commitments.

In this context, the 45 per cent reduction in global emissions by 2030 required to limit temperature increases to 1.5C has a near-zero probability of being achieved. By setting a carbon-neutrality target for 2060, 10 years later than that of the other developed countries, China has secured room for manoeuvre, and as soon as the failure of net-zero policies becomes evident China will criticise the West and procrastinate over its own decarbonisation target.

Meanwhile, Arima says, Chinese companies are the principal beneficiaries of the green agenda, holding 70 per cent of the global solar market and representing seven out of the 10 largest wind turbine manufacturers.

He says the trend towards electric vehicles is particularly advantageous for China, sweeping away decades of accumulated technological advantage in internal-combustion engines of its inter­national competitors and provid­ing a shortcut to automobile power status.

While dependence on Middle Eastern oil has long been the achilles heel of global energy security, a shift towards renewables, battery storage and EVs could cause a different risk, namely growing dependence on China for fundamental strategic minerals and the high-value components manufactured from them. Arima says low-carbon policies in the West will reduce the cost of fossil fuels to China while increasing energy costs in the West, delivering competitive advantage to China.

China’s plans for a regional, then a world, electrical power grid raises security concerns on cyber attacks and politically or militarily motivated disconnections. China is promoting the concept of “global energy interconnection”, claiming this could reduce costs through electricity trading, as well as promoting the spread of renewable energy and supporting decarbonisation.

With the State Grid Corporation of China at its core, this concept aims at the completion of an international power grid in each continent, including Asia, by 2030, the construction of an intercontinental grid by 2040 and connection of the entire world through a high-voltage power grid by 2050.

Arima says the divided and acrimonious world being created by net-zero policies will permit China to enhance its global economic presence and influence further, while the developed, democratic world becomes economically, politically and militarily weaker.

Arima’s bleak assessment provides a reality check for policymakers. But it also highlights the opportunity for Australia to help other countries avoid becoming hostage to dominance by China.

While the government considers a net-zero pledge to be politically and diplomatically expedient, the bigger imperative must be to ensure adequate supply lines of strategic materials for the green transition in like-minded nations. This is the substance of discussions being held by Quadri­lat­eral Security Dialogue leaders, including Australia, Japan, the US and India.

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