Guest essay by Eric Worrall
The invitation only World Economic Forum, a gathering of politicians and billionaires in Davos, Switzerland, is betting they can brush aside President-elect Trump’s efforts to stop the climate cash juggernaut.
Davos Elite Focus on Climate Change, Ignoring Trump’s Skepticism
by Javier Blas and Jess Shankleman
15 January 2017, 10:01 GMT+10 16 January 2017, 10:05 GMT+10
Donald Trump has often ridiculed global warming and promised to withdraw the U.S. from the global accord signed in Paris in 2015. Yet despite the change of political weather in Washington, the captains of business and finance gathered in Davos this week will spend a lot of time talking about climate change — and how to make money from it.
The World Economic Forum is devoting 15 sessions of its 2017 annual meeting to climate change, and nine more to clean energy — the most ever on the issues.
It reflects how much is at stake. For global business leaders, it’s not just a question of burnishing their green credentials, but about billions of dollars — maybe even trillions — in potential profits and losses. Insurers are starting to price-in more frequent flooding and droughts; energy giants are shaping their business for a world that’s moving away from oil and coal; car makers are putting real money into electric vehicles; banks want to lend money for renewable electricity projects.
“The good thing is that the Paris agreement raised the bar for everyone,” said Ben van Beurden, the head of Royal Dutch Shell Plc, Europe’s largest oil group. “Everybody feels the obligation to act.”
With money-making opportunities rising, traditional climate change advocates — Al Gore and Greenpeace executive director Jennifer Morgan — will mingle in panel discussions with executives such as HSBC Holdings Plc Chairman Stuart Gulliver and Patrick Yu, president of Cofco Corp., the largest food company in China. They will discuss the nexus between the fight against global warming and business — both how to stop climate change and how to profit from it.
Michael Oppenheimer, a professor at Princeton University who will help to explain the exhibit, said despite the arrival of Trump, the fight against global warming will continue.
“No matter what the U.S. president says, the progress on climate change can have many routes,” he said. “The U.S. can harm progress, but will not stop progress.”
China, which for years sought to derail global efforts to tackle climate change, has flipped its role and is now lecturing the U.S. and Europe on the importance of the issue. Xi Jinping will be the first sitting Chinese president to attend Davos, after making green finance a key topic for China’s presidency of the Group of 20 nations last year.
Why would China suddenly want to talk up Climate Change? Some greens are even calling for China to assume global climate leadership. Yet at the same time, China are ordering an entire Canada worth of extra coal capacity to be built in the next 3 years.
As WUWT reported in November, the new Chinese energy plan calls for a 20% expansion of coal power over the next 3 years.
Under the terms of China’s feeble Paris “commitment”, China has a free hand with CO2 emissions until the 2030s.
… Based on its national circumstances, development stage, sustainable development strategy and international responsibility, China has nationally determined its actions by 2030 as follows:
- To achieve the peaking of carbon dioxide emissions around 2030 and making best efforts to peak early;
- To lower carbon dioxide emissions per unit of GDP by 60% to 65% from the 2005 level;
- To increase the share of non-fossil fuels in primary energy consumption to around 20%; and
- To increase the forest stock volume by around 4.5 billion cubic meters on the 2005 level.
But China appears to already have far more coal capacity than they need;
Comment: New coal power plants in China – a (carbon) bubble waiting to burst
While China’s coal consumption growth has slowed down, and fell in 2014, coal-fired power generating capacity continues to grow rapidly. This apparent contradiction has led some observers to conclude that China’s coal consumption growth is bound to resume.
But the evidence suggests otherwise. Instead the continued buildup of coal-fired power plants represents an investment bubble that will burst as overcapacity becomes too large to ignore.
What is the solution to this paradox?
I have a theory – a speculative theory, but one which I believe is supported by the evidence.
China probably didn’t originally intend for there to be a coal capacity bubble – China have been running a loose monetary policy for a long time. Bubbles and resource misallocation are a common consequence of easy money. By the time the Chinese government noticed there were too many coal plants, it was probably too late to stop them being built.
But as WUWT previously reported, China has a plan to utilise their enormous excess of coal capacity – they want to export their electricity, maybe all the way to Europe.
The amount of wasted energy would be ridiculous – by my very rough calculation, even using ultra-high voltage DC power transmission technology, at least 30% of the transmitted electricity would be lost on its 6000 mile journey to Europe.
But as long as Europe continues to attempt to adhere to their Paris agreement pledges, and continues to inflict expensive renewables onto European consumers, Chinese electricity is so cheap that even a 30% transmission loss is acceptable.
It would be cheaper and less wasteful to transport the coal to Europe, and burn the coal in European power plants, but this would violate the Paris agreement. Under the terms of the Paris agreement, China is allowed to burn the coal, but Europe is not. So China gets to burn the coal Europe used to burn, and the Chinese electricity is shipped to Europe, without violating European or Chinese Paris agreement pledges.
Of course, if President-elect Trump wins his battle against the green blob, if the Paris agreement collapses, if Trump and Brexit and Le-Pen in France cause the Paris agreement to unravel, the Davos corporates who have cynically helped to finance and facilitate this audacious scheme to mine European government stupidity stand to lose their shirts. The Chinese coal bubble will burst, maybe along with the Chinese economy, and the Chinese plan to loot the west will come unravelled – leaving America standing tall above the broken rubble of a nasty scheme to profit from the misery of electricity consumers in Europe.