18 October 2017
It will no longer import recycled scrap from the U.S. So what do we do with it?
This week, the front page of the New York Times described the Trump administration’s repeal of the Clean Power Plan, the Obama administration’s attempt to slash carbon emissions from coal-fired power plants. “The war on coal is over,” declared Environmental Protection Agency Administrator Scott Pruitt. Right under that article was an article from halfway around the world detailing China’s massive new investment in electric vehicles, part of Beijing’s determination to dominate the era of clean-energy technology. It is a tale of two strategies.
The Trump administration has decided to move into a new century: the 19th century. Coal has been in decline for at least seven decades. In 1950, it accounted for half of all U.S. electricity generation. It is now down to a third. Additionally, massive automation of mining has meant that the jobs in the industry are disappearing, down from 176,000 in 1985 to 50,000 in 2017. Machines and software are replacing coal miners just as surely as in other industries. Demand for coal is weak because of alternatives, chiefly natural gas. In the past couple of years, many of the top American coal companies have been forced to declare bankruptcy, including the largest, Peabody Energy.
Despite President Trump’s policy shift, these trends are unlikely to change. Reuters found that, of 32 utilities in the 26 states that filed lawsuits over the Clean Power Plan, “the bulk of them have no plans to alter their multi-billion dollar, years-long shift away from coal.” The reason utilities are shedding coal is economics — the price of natural gas has plummeted in recent years, and its share of U.S. electricity generation has nearly tripled since 1990. In addition, costs are falling dramatically for wind and solar energy.
And, of course, coal is the dirtiest form of energy in use. Coal-fired power plants are one of the nation’s leading sources of carbon-dioxide emissions, and most scientists agree those emissions lead to global warming. They also cause terrible air pollution, with all its attendant health problems and costs.
That’s one of the reasons China, which suffers more than a million deaths a year because of poor air quality, is making huge investments in clean energy. The country has become one of the world’s leading producers of wind turbines and solar panels, with government subsidies enabling its companies to become cost-efficient and global in their aspirations. In 2015, China was home to the world’s top wind-turbine maker and the top two solar-panel manufacturers. According to a recent report from the United Nations, China invested $78.3 billion in renewable energy last year — almost twice as much as the United States.
Now Beijing is making a push into electric cars, hoping to dominate what it believes will be the transport industry of the future. Already China has taken a large lead in electric cars. In 2016, more than twice as many were sold in China as in the United States, an astonishing catch-up for a country that had almost no such technologies 10 years ago. China’s leaders have let it be known that by 2025 they want 20 percent of all new cars sold in China to be powered by alternative fuels. All of this has already translated into jobs, “big league” as President Trump might say: 3.6 million people are already working in the renewable-energy sector in China, compared with 777,000 in the United States.
China is still heavily reliant on coal, which it has in plentiful supply, and it has tried to find steady sources of other fossil fuels. It went on a shopping spree over the past two decades, making deals for natural resources and energy around the world, often paying at the peak of the commodities bubble in the mid-2000s. But over time, it recognized that this mercantilism was a bad strategy, tying Beijing up with expensive projects in unstable countries in Africa. Instead, it watched and learned from the United States as technological revolutions dramatically increased the supply and lowered the cost of natural gas and solar energy. China has now decided to put a much larger emphasis on this route to energy security, one that also ensures it will be the world’s leading producer of clean energy.
Trump has often talked about how China is “killing us ” and that he’s tired of hearing about China’s huge growth numbers. He should notice that Beijing is getting its growth by focusing on the future, the next areas of growth in economics and technology. The United States under Trump will be engaged in a futile and quixotic quest to revive the industries of the past. Who do you think will win?
This Saturday, Oct. 14, in Monaco, He Qiaonv will announce the first step in a $1.5 billion plan that may represent the largest-ever personal philanthropic commitment to wildlife conservation.
The number isn’t the only thing that’s surprising about the announcement. The source might equally raise eyebrows: The donation isn’t coming from a known Western conservationist like Paul Allen, but from a landscape planner-turned-environmental steward who’s based in Beijing.
Madame He represents a new wave of self-made Chinese philanthropists unafraid to spend; her seven-year pledge stands at more than a third of her current $3.6 billion net worth, according to the Bloomberg Billionaires Index.
“[China is] pivoting to a new narrative in record speed,” said Tom Kaplan, founder and chairman of Panthera, the leading wild cat conservation organization and He’s first international partner. “Their [global] reputation has suffered by being viewed as the scourge of the elephant and tiger—and they want to reverse this.”
As part of their partnership, He’s namesake Beijing Qiaonv Foundation (BQF) is pledging $20 million toward Chinese snow leopard and other projects at Panthera—significant for an organization whose annual operating budget hovers around $14 million. And doubly significant given that threatened cats in China had yet to be put under such a bright spotlight as, say, lions in Africa.
With the emergence of Chinese leadership in this area, Kaplan says Qiaonv’s pledge stands to change the face of cat conservation forever. “One day this event may be seen as a watershed.”
Private Wealth, Public Commitments
In China, domestic private conservation work still requires the collaboration of the government, as private landownership—and therefore, privately managed nature reserves—are not allowed under Chinese law. But under Xi Jinping’s leadership, these private-public partnerships are becoming possible.
Xi has emerged as an unlikely environmental leader after the U.S. dropped out of the Paris climate accord. Skeptics may think of this as rhetoric aimed at filling a political gap, but he has already made moves by banning the illegal ivory trade by the end of 2017, putting forth a long-term proposal to eliminate gasoline-powered cars, and creating the country’s first tiger and Amur leopard reserve near the Russian border. It’s one of 30 to 50 new conservation zones the government has promised by 2020.
All this stands in sharp contrast with other realities in China: Combating air pollution, the most visible sign of China’s environmental issues, continues to be a work in progress. And the country is still a major proponent of coal, despite cuts to its overall energy consumption.
But change is underway. “When the Chinese government decides to do something, they do it,” Kathryn Sheridan, CEO of a Brussels-based sustainability communications consultancy, told Reuters. “It’s not the talking shop that we see in Europe.”
Kaplan likens this moment in Chinese history to 19th century America, when the U.S. was making the move from rural to industrial society. “The water and air were being polluted in the rush for economic growth, and wildlife was obliterated—we nearly destroyed our own national symbol, the bald eagle,” he explained. “No nation has a monopoly on virtue, but it is also true that we can learn from history. The Chinese are experts at precisely that.”
Madame He agrees that the collaboration of China’s ultra-rich with their government marks a turning point for the country. “The public awareness of environmental protection is gradually increasing in China,” she told Bloomberg.
From Landscaper to Global Conservationist
Madame He’s affinity for the environment is what drove her into landscaping and resource management in the first place. But her vision for how she could contribute toward the greater good of the planet has evolved over time.
“At the very beginning, the dream of our business was to build 100 of the most beautiful parks in 100 cities of China,” said He of Beijing Orient Landscape Co., the company she built from scratch and continues to oversee as chairman. What she found along the way were polluted water systems and depleted urban ecology.
In 2012 she founded Beijing Qiaonv Foundation with the goal of resolving some of the world’s most pressing environmental issues. Among her priorities were establishing key conservation areas within her home country; identifying native species in the greatest need of protection; and lobbying the government, partnering with international organizations, and supporting domestic NGOs to create meaningful change that could impact global biodiversity and carbon dioxide levels.
As He put it, “We believe that protecting China is to protect the whole Earth.”
Private investments like hers matter. As we see happening now in the U.S., official Chinese priorities could easily shift, unraveling or putting a halt to progress that was quickly made. Partnerships with global players such as Kaplan and Bill Gates, who has worked with He through the China Global Philanthropy Institute (CGPI), mean that He’s fundraising commitments are being given extra measures of accountability. Just as important, they’re also being given a proven toolkit with which to succeed.
A Training Kit Imported From the West
With 79 projects already underway in 26 provinces—including everything from Asian elephant conservation to wetland protection—BQF didn’t need international validation or support to start making a difference. But at last year’s East-West Sustainability Summit in Honolulu, which was convened in partnership with CGPI, He shared a table with some of the world’s biggest players in conservation, including Nicole Mollo, the executive director of environmental philanthropy at the Recanati-Kaplan Foundation, the Panthera founder’s private organization.
“Things [in China] are changing under the global radar,” said Mollo, who went on to broker the partnership between Panthera and BQF, helping to establish both the financial scope and environmental goals that the partnership would support. “They have the will and frankly they have the resources—what they are missing is a middle tier of expertise. They don’t know what it means to manage a protected area, to train a ranger, or to work with communities and livestock.”
That’s why the partnership with Panthera marks a meaningful shift in He’s work: With the organization’s help, BQF will create and staff two protected snow leopard reserves that will serve as pilot areas and can be scaled over time, while simultaneously underwriting a wildlife management training program for Chinese conservationists. Then she’ll turn her attention to building hundreds of urban classrooms where “hundreds of millions of people can visit and learn” about conservation.
Big Goals, Big Impact
Even if He only accomplishes a quarter of what she sets out to do with her $1.5 billion pledge, she stands to make a massive impact.
In some ways, she already has. While the $20 million contribution to Panthera matches the commitments made by several global figureheads—Mohammed bin Zayed, the crown prince of Abu Dhabi—a 10-figure pledge is “unheard of.” That’s according to Mollo, who has facilitated some of the largest recorded contributions to conservation organizations over her years at the African Parks Foundation and the Wildlife Conservation Society.
She said the largest donation she’s seen on record was a $65 million commitment over 10 years; pledges in the hundreds of millions, like Gates’s recent $5 billion pledge to his health care- and education-focused foundation, are generally made to universities, hospitals, or cultural institutions with naming opportunities attached to them. In the conservation world? It’s not something she’d ever seen before. To wit, a spokesperson for the National Audubon Society confirmed that the organization’s recent “large donations” have rarely reached the seven-figure level—and its largest contributions have come from groups like the MacArthur Foundation rather than individuals.
Added Mollo, “I would be the first one to bash China for what they’ve done wrong, but that strategy will not get us anywhere. And when they put their money where their mouth is, it is our job to support them.”
Eight of the ten countries with the highest levels of displacement and housing loss are in South and Southeast Asia
By Adela Suliman
LONDON, Oct 12 (Thomson Reuters Foundation) - About 14 million people are being made homeless on average each year as a result of sudden disasters such as floods and storms, new figures show.
The risk of displacement could rise as populations swell and the impacts of climate change become more severe, said a report issued on Friday by the United Nations Office for Disaster Risk Reduction (UNISDR) and the Geneva-based Internal Displacement Monitoring Centre (IDMC).
Earthquakes, tsunamis, floods and tropical cyclones are the main disasters forecast to uproot large numbers of people, with countries in Asia, home to 60 percent of the world's population, hit particularly hard, according to modelling by the agencies.
Eight of the ten countries with the highest levels of displacement and housing loss are in South and Southeast Asia.
They include India, where an average of 2.3 million people are forced to leave their homes annually, and China with 1.3 million people uprooted each year, found the report, released on the International Day for Disaster Reduction.
The numbers exclude those evacuated ahead of a threat, and people displaced by drought or rising seas.
Russia and the United States also feature as countries where disasters could cause large-scale homelessness, unless significant progress is made on managing disaster risk, the study said.
"The findings underline the challenge we have to reduce the numbers of people affected by disasters," said Robert Glasser, the U.N. secretary-general's special representative for disaster risk reduction.
"Apart from death or severe injury in a disaster event, there is no more crushing blow than the loss of the family home," he added in a statement.
The most devastating floods to hit South Asia in a decade killed more than 1,400 people this year, and focused attention on poor planning for disasters, as authorities struggled to assist millions of destitute survivors.
Refugees and people uprooted in their own countries are already at record-high numbers, said IDMC director Alexandra Bilak. The new model goes some way towards predicting the risk of disaster-related displacement, which is an "urgent, global priority", she noted.
It is also intended to help urban planners in hazard-prone towns and cities who must consider the safety and durability of built-up areas and the threats to millions living there. Justin Ginnetti, head of data and analysis at the IDMC, told the Thomson Reuters Foundation there was a strong correlation between the risk of being uprooted by a disaster and residing in a rapidly urbanising location.
With the poor often living on the outskirts of cities, on flood plains or along river banks, Ginnetti said better urban planning could make them less vulnerable.
He contrasted Japan and the Philippines, which have roughly the same number of people exposed to cyclones. Japan builds more robust housing and so faces far less displacement in a disaster than the Philippines, where homes are less able to withstand shocks, he said.
"We don't want people to think of disaster displacement as some kind of inevitable act of God - this is not (a) necessary outcome every time there's heavy rainfall," he said.
By Beh Lih Yi
KUALA LUMPUR, Oct 10 (Thomson Reuters Foundation) - Natural disasters could become more destructive in Asia-Pacific, where a person is already five times more likely to be affected than in other regions, the United Nations warned on Tuesday, urging countries to invest in resilience plans.
Home to 60 percent of the world's population, Asia-Pacific is the planet's most disaster-prone region.
FACTBOX-Asia-Pacific: the world's most disaster-prone region
Last year, floods, storms and extreme temperatures killed 4,987 people - far fewer than the annual average since 1970 - and affected some 34.5 million, according to the Asia-Pacific Disaster Report 2017.
Poor and lower middle-income countries, which are typically least able to prepare for and respond to weather hazards, suffered about 15 times more deaths from disasters than richer Asian nations, said the report released by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP).
Disasters can have "deeply disruptive effects on livelihoods" and further disadvantage already vulnerable people, many in rural areas, pushing more into poverty, it said.
In addition to the human costs, the ESCAP research indicated that between 2015 and 2030, 40 percent of global economic losses from disasters would occur in Asia-Pacific.
"It also shows that future natural disasters may have greater destructive potential," ESCAP said in a statement.
The commission said disaster risks exacerbated by climate change were likely to increase in the region.
They include more life-threatening heatwaves, worsening floods and droughts, more frequent and powerful tropical cyclones, and heavier monsoon rains in East Asia and India.
ESCAP head Shamshad Akhtar urged countries to fill gaps in their plans for dealing with disasters.
"The absence of an institutionalised insurance culture and adequate post-disaster financing threaten our extraordinary economic and developmental achievements," she said.
According to the report, the countries facing the greatest economic losses from disasters are the region's largest economies like Japan and China.
But its least-developed and small island nations could be hit hardest, losing between 2.5 and 4 percent of their gross domestic product annually.
ESCAP called for actions to mitigate disaster risk linked to climate change, including setting up a regional early warning system and investing in disaster risk education.
It said building disaster resilience into agricultural development plans was important, as studies showed most poor people in Asia-Pacific are farmers in rural areas.
"It is... critical for improving livelihoods and reducing poverty," the report said.
China Hastens the World Toward an Electric-Car Future
By KEITH BRADSHEROCT. 9, 2017
A driver waiting for his electric car to be charged at a station in Beijing. Already the world’s largest maker and buyer of electric cars, China is forcing the rest of the auto industry toward a battery-powered future. Credit Gilles Sabrie for The New York Times
SHENZHEN, China — There is a powerful reason that automakers worldwide are speeding up their efforts to develop electric vehicles — and that reason is China.
Propelled by vast amounts of government money and visions of dominating next-generation technologies, China has become the world’s biggest supporter of electric cars. That is forcing automakers from Detroit to Yokohama and Seoul to Stuttgart to pick up the pace of transformation or risk being left behind in the world’s largest car market.
Beijing has already called for one out of every five cars sold in China to run on alternative fuel by 2025. Last month, China issued new rules that would require the world’s carmakers to sell more alternative-energy cars here if they wanted to continue selling regular ones. A Chinese official recently said the country would eventually do away with the internal combustion engine in new cars.
“We are seeing ourselves at a crossroads in the development of the automobile industry in this country, with a global scale in mind,” said Jürgen Stackmann, Volkswagen’s top executive for VW brand sales and marketing, during a visit to Shanghai.
China has reshaped industries before — clothing, steel making, even lace — through a potent mix of government support and cheap labor. More recently it has transformed green-energy businesses like solar and wind power.
This, however, would be on a different scale.
If China succeeds — and there is no guarantee — Beijing’s policy makers will be front and center reimagining the global auto industry, a business that has helped define communities, industries and people’s aspirations for more than a century. It is a role that was almost inconceivable just a few decades ago, when China was more closely associated with a different type of green transportation: the black, classic Flying Pigeon bicycle.
China feels it has little choice in pressing forward. While it is true that electric vehicles fit neatly into China’s plan to become the world leader in sci-fi technology like artificial intelligence, the country also fears a dark future — one where its cities remain cloaked in smog and it is beholden to foreign countries to sell it the oil it needs.
Beijing’s Third Ring Road in a heavy haze in 2014. China is pushing ahead with electric cars, but nearly three-quarters of the country’s power comes from coal, which emits more climate-changing gases than oil. Credit Jason Lee/Reuters
Already, China is the world’s largest maker and seller of electric cars. Chinese buyers are on track to snap up almost 300,000 of them this year, three times the number expected to be sold in the United States and more than the rest of the world combined.
The country’s market heft is considerable. China buys more General Motors-branded cars than Americans do. Even for Tesla, the still-small American maker of luxury electric sedans, China has become the second-largest market, even though China’s taxes on imported cars are 10 times as high as those in the United States. Tesla officials have said they are considering opening a factory in China.
A week ago, G.M. and Ford unveiled plans to add a combined 33 electric models to their lineups. Global manufacturers like G.M. and Volkswagen are also moving much of their research, development and production of electric cars to China. China in turn is pressuring them to share that technology with their Chinese partners.
Behind the scenes, China is recruiting some of the world’s best electrical engineering talent, even in the United States. China is also home to many smaller companies that make the parts essential to assembling electric cars. All this comes just as electric cars are finally starting to become competitive with gasoline- or diesel-powered cars on performance and cost.
Electric cars are an increasingly common sight in cities like Beijing, Shanghai and Shenzhen. For some drivers here, electric cars are all they know.
“I don’t plan to buy a gasoline car, since I heard they are going to be banned for sale,” said Xiong Jianghuai, a lawyer based in Shanghai, who has bought two made by Chery, a Chinese automaker. He said he was delighted that the operating cost was less than one-fifth of the cost of buying gasoline, even if the initial purchase price was a little higher.
“I think the future lies in electric cars,” Mr. Xiong said.
Many outside China — including some members of President Trump’s administration — say China is using unfair government support to create national champions that could eclipse their rivals abroad.
More Watts on the Road
Number of battery-electric cars sold or projected to sell, in thousands.
Note: 2017, 2018 and 2019 figures are forecasts.
Source: LMC Automotive
Chinese auto executives say their country is pursuing common-sense policies to develop cutting-edge industries.
“In China, the entrepreneurs in the industrial sector are very lucky, because we have the foundation” from the government, said Li Bin, the founder and chairman of the NIO Company, a Chinese electric car manufacturer. “These opportunities are rare or impossible in any other country in the world.”
China’s ability to dominate electric cars is not ensured. China’s auto manufacturing skills are considerable, but it has yet to create a single car model that has become popular abroad.
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Even in China, most car buyers still prefer Fords, Chevrolets and Volkswagens largely made by government-mandated joint ventures between global and Chinese companies. When it comes to electric cars, most Chinese models are inexpensive and boxy, unlike the sleek lines and looming falcon-wing doors of Tesla’s latest models.
Chinese officials have long called for electric cars to be practical, and not just luxuries.
“The central government has made a lot of strategies for the development of new energy vehicles,” said Song Qiuling, a deputy director at China’s Finance Ministry. “That is why we have seen the progress and development of new energy vehicles.”
Some players have already stumbled. Faraday Future, an electric car company based in the United States but owned by a Chinese company, scaled back after its parent hit hard financial times. China yanked electric-car subsidies away from a number of local companies after an investigation last year showed that many were overstating sales.
The environmental benefits may be tough to realize any time soon. Nearly three-quarters of China’s power comes from coal, which emits more climate-changing gases than oil. Even on electricity, China’s cars are still burning dirty.
Customers waiting last week in the showroom of a car dealership selling electric vehicles in Beijing. Credit Gilles Sabrie for The New York Times
China is also favoring battery electric technology that it can call its own. Foreign automakers already control much of the advanced technology behind fuel-sipping alternatives such as plug-in hybrids, like the Toyota Prius, which runs on both gasoline power and an electric battery.
Still, electric cars make particular sense in China. China’s dense and crowded cities often mean shorter driving distances, while its extensive high-speed rail system reduces the need for long-distance road trips.
Han Tao discovered the limits of electric cars the hard way. A 35-year-old stock investor in Beijing, he said he ran out of charge in July while driving to Shenzhen, 1,300 miles away. His Chinese-made BYD E6 electric sedan needed a tow.
Still, he said, he and his wife prefer the E6 over the gasoline-powered Chevrolet Cruze they bought four years earlier.
“It doesn’t have the oily smell and the noise from the engine,” Mr. Han said. “It accelerates way faster than gasoline cars. It feels like you are on a high-speed train.”
China’s push for electric cars shows how its industrial ambitions can endure big political shifts. China named a former Audi engineer, Wan Gang, its minister of science and technology in 2007, and he has kept the position and maintained the push despite the emergence of a new slate of Chinese leaders.
Wen Jiabao, China’s second-most-powerful official as premier from 2002-12, was an avid supporter of electric cars who came from Tianjin, the center of China’s battery industry. Mr. Wen’s successor as premier, Li Keqiang, has also turned government backing for high-tech industries into his signature accomplishment, while President Xi Jinping has strongly endorsed the effort.
“The development of new energy vehicles,” said Xu Chaoqian, a top aide to Mr. Wan, “has received a lot of support from President Xi, Premier Li and others.”
Follow Keith Bradsher on Twitter, @KeithBradsher.
Ailin Tang in Shanghai and Adam Wu contributed research from Beijing.
A version of this article appears in print on October 10, 2017, on Page A1 of the New York edition with the headline: China Hastens A Global Move To Electric Cars. Order Reprints| Today's Paper|Subscribe
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With China now planning to phase out gas-powered cars, automakers are talking about an all-electric future. It could mean a big drop in emissions.
BY ERICA GIES, INSIDECLIMATE NEWS
OCT 10, 2017
Volvo, BMW and other automakers have announced plans to expand their electric vehicle fleets. One GM official declared last week: “General Motors believes in an all-electric future.” Credit: Miles Willis/Getty
A research note from Barclay's Bank last week summed up what the boom in electric vehicles, along with gains in fuel efficiency, might mean for oil demand—a reduction, by 2025, almost as large as Iran's total production. And if electric vehicles seize a third of the car market by 2040, the drop in demand would be nearly as much as Saudi Arabia produces.
That kind of jaw-dropping outlook has become increasingly common in recent months amid signs that a tipping point is coming for electric vehicles.
The technology breakthroughs, market forces and government policies might also auger a peak in oil demand, and that would be a big step toward wiping out emissions of greenhouse gases from the automotive tailpipe.
From Europe to Asia, and in parts of the United States, policymakers are talking about how to make it happen.
France and Britain committed in July to ban the sales of all gasoline- and diesel-powered cars by 2040, motivated largely by health concerns about air pollution. Then China, the world's largest auto market, announced last month that it will set a deadline for automakers to stop selling internal combustion engine vehicles and set emissions targets for automakers. California officials said they want to follow suit.
Major automakers have been falling over each other in recent weeks to announce plans for electric vehicle fleets and the phase out of internal combustion cars. General Motors said it would launch 20 new all-electric models by 2023, including two within the next 18 months. Its global products chief, Mark Reuss, declared that "General Motors believes in an all-electric future." It seems the question is when, not whether.
Electric vehicles still face challenges, such as range limitations, battery weight and cost, and sparse charging spots. But the industry has been steadily chipping away at them, and confidence is growing.
The IEA documented a global 60 percent growth in the EV market from 2015 to 2016. While EVs make up just 0.2 percent of passenger vehicles worldwide, in six countries, their market share has surpassed 1 percent: Norway (29%), the Netherlands (6.4%), Sweden (3.4%), France, the United Kingdom and China (1.5%).
"Norway is leading the way," said Luke Sussmas, a senior researcher at Carbon Tracker, the British think tank. Norway introduced far-sighted EV incentives in the 1990s, and this year, around 40 percent of all vehicles sold there were electric. California introduced a modest zero-emissions vehicle policy in 1990 and has followed that with other incentives for hybrids and EVs. In the first quarter of 2017, 5 percent of new car sales in California were zero-emissions vehicles.
But policy incentives will only take EVs so far. The real tipping point will come when they are cost-competitive with internal combustion engines.
How Soon Could EVs Be Competitive?
Gregor Macdonald, editor of the Terrajoule industry newsletter, lays out his criteria for a "competitive" electric vehicle: it must go 200 miles without recharging and be priced, without subsidies like tax credits, within $3,000 of a comparable gasoline model. "The buyer won't even have to consider the additional savings of the lower lifetime running costs" for EVs, he said, noting that they are cheaper both to fuel and to tune up.
The Chevy Bolt and the Nissan Leaf are getting close to his criteria already, and more choices are coming from across the industry.
Volvo has promised that all its models from 2019 on will be fully electric or hybrids. Jaguar Land Rover made a similar promise starting in 2020, and BMW and Volkswagen announced that they were planning more electric models. Ford is creating a new team to accelerate its development of electric vehicles.
Macdonald thinks some EVs will be competitive worldwide by 2020. Other analysts see a longer trajectory. Kevin Book, managing director of ClearView Energy Partners, thinks it will be seven to 15 years.
General Motors CEO Mary Barra and Mark Reuss, head of global product development, introduced the Chevy Bolt EV at the 2016 North American International Auto Show. The car, designed to be a long-range mass market electric vehicle, was named 2017 North American Car of the Year. Credit: Bill Pugliano/Getty
Earlier this year, Sussmas co-authored a study for Carbon Tracker titled "Expect the Unexpected" that predicted EVs would be cost-competitive with internal combustion engine vehicles by 2020 and have a 35 percent market share by 2035.
Oil industry forecasts tend to be much more conservative. The oil company BP, for instance, forecasts 6 percent of the worldwide fleet will be electric by 2035.
Many oil companies say the peak is decades away. They cite the International Energy Agency's "current policies" scenario, which finds slowing growth but no peak for oil beyond 2040—but assumes no changes in policy or technology. But some, including Shell, say it could come as soon as 2021, and are changing their business models accordingly.
The IEA itself sees a range of possibilities. A chart of deployment scenarios in its 2017 Global EV Outlook shows some curves rising more sharply than the current pace of technology might suggest—and some meeting or exceeding IEA's own scenario for what's needed to achieve the goals of the international Paris climate agreement.
For its part, Carbon Tracker assumes that governments will achieve their Paris commitments and that the costs for low-carbon technologies will continue to fall rather than just stay static. The notion that costs and policies wouldn't change "is obviously a completely unrealistic proposition," Sussmas said.
Electric vehicles are just one factor influencing when global oil demand and emissions will decline; others include broader transportation demand, fuel efficiency standards and urbanization.
Carbon Tracker predicts that oil demand will peak as soon as 2020, remain somewhat flat until 2030, then drop off. It bases that analysis in part on its growth projections for EVs, which it says would displace 2 million barrels of oil use by 2035—equivalent to the supply glut that caused oil prices to crash in 2014. By 2050, EVs would take 66 percent of the market, displacing 25 million barrels a day, with "grave consequence for the industry," Sussmas said.
Samantha Gross of the Brookings Institution said the spate of government deadlines for the banning of traditional cars "seem a little early."
"They might be better off letting the market do that," she said.
But Macdonald counters that the ambitious policies are "affirming a trend that's already in place" and the distant targets set leave plenty of time for them to play out.
"In venture capitalism, startups and the history of new products, there's an old saying: the first 1 percent is the hardest," he said. For EVs, in the United States, "we weren't quite at 1 percent last year. We'll be at 2 percent next year," he says. "That's very dangerous for the auto industry."
If the automakers' recent announcements are any indication, they've gotten that memo.
In China and India, Air Pollution Drives Change
Just a few years ago, conventional wisdom held that China and India's billion-plus populations would enter the middle class, buy cars and lead U.S.-style lives, rocketing through the global carbon budget. "We just haven't seen that yet," Macdonald said. "It's not happening."
Instead, in China, toxic air pollution from coal plants and car emissions are causing human illnesses and crop failures that have sparked public protests. The government responded to the pollution problem with strong subsidies for EVs, Sussmas said.
Over 750,000 electric vehicles were sold worldwide last year, pushing the total electric car stock past 2 million. About 40 percent of the new sales were in China, according IEA data. Credit: AFP/Getty Images
In India, oil demand grew at 8.3 percent last year, and Macdonald predicts ongoing growth there for another five to seven years. But it is also reaching a crisis point with air pollution, Sussmas said. This summer, India's power minister, Piyush Goyal, said that by 2030, India is aiming for 100 percent electric vehicles.
"I think most people think that's unrealistic and almost impossible to deliver," Sussmas acknowledged. However, such targets "are still significant to the degree they illustrate discussions behind the scenes."
Oil: Not Just for Cars
Most of the people who are saying peak oil demand is coming are focused on these shifts in private car and truck use, especially EVs and culture change, because personal vehicles use 26 percent of oil worldwide and 45 percent in the United States.
But other uses for oil are not so easily replaced: shipping, aviation, trucking, plastics. And that is part of the reason many oil companies feel confident in ongoing demand for their product.
"It's not that ExxonMobil is insisting that we all use them. We're still using this stuff because it works really well," said Gross, who has worked for the oil industry. Regardless, she added, "you don't need to get rid of everything to see global oil demand start peaking and declining."
What does this all mean in terms of holding the world to less than 2 degrees Celsius of warming, as nations worldwide have agreed—possibly even 1.5 degrees?
The Energy Information Agency (EIA), which is the data arm of the U.S. energy department, recently projected that worldwide emissions of carbon dioxide from the burning of all fossil fuels—oil, coal and gas—would grow 16 percent by 2040 from the levels of 2015, the year that the nations of the world agreed to the landmark Paris Agreement on climate change that is intended to reverse the trend.
The EIA's current scenario shows a slowing, but no decline, in global petroleum use. Liquid fuels, mostly petroleum based, remain the largest source of energy consumption, and with energy demand growing around the world, so do emissions.
For EVs to make the most of their emissions-reducing promise, the electricity sector will also have to continue its rapid shift to renewable energy sources.
And while that is beginning to happen, even the relatively optimistic Carbon Tracker doesn't see an end to warming.
The group says that if oil demand peaks in 2020, and we see declines in other fossil fuel emissions as well, the temperature rise would still exceed the Paris targets, reaching between 2.4°C (50 percent probability) and 2.7°C (66 percent probability) by 2100.
However, that's significantly less than the business-as-usual trajectory toward 4°C and beyond used by many fossil fuel companies.
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ELECTRIC VEHICLES CLIMATE CHANGE
A logo of liquefied natural gas (LNG) is pictured on a LNG truck outside a heavy-duty truck shop in Yutian county, China's Hebei province September 29, 2017. REUTERS/Jason Lee
YUTIAN, China (Reuters) - On a recent morning in Yutian, a dusty town bisected by the highway that connects Beijing to the sea, Su Meiquan strolled into a dealership packed with hulking trucks and prepared to drive off with a brand new rig.
After years of driving a diesel truck for a trucking company, he had decided to buy his own vehicle – a bright red rig fueled with liquefied natural gas, capable of hauling as much as 40 tonnes of loads like steel or slabs of marble.
Su hopes the LNG truck - less polluting and cheaper to operate than diesel ones - will be the cornerstone of his own business, plying the route to the western fringes of China.
“Everybody says gas is cleaner with nearly no emissions,” he said after signing a stack of paperwork in the dealer’s office. In front of him, photos of proud drivers posing in front of their own new LNG trucks had been taped to the wall.
Sales of large LNG trucks are expected to hit record levels in China this year as the government steps up an anti-pollution campaign that includes curbs on heavy-duty diesel vehicles.
LNG trucks account for about four percent of the more than six million heavy vehicles able to haul 40 to 49 tonnes of goods that are currently on China’s roads. The vast majority of the 43 billion tonnes of freight transported across China last year was by highway.
But demand for LNG trucks is soaring as companies and manufacturers shift to vehicles that run on the gas that Beijing sees as a key part of its war against smog.
Sales of LNG heavy trucks surged 540 percent to nearly 39,000 in the first seven months of the year, according to Cassie Liu, a truck analyst with the IHS Markit consultancy.
That was partly fueled by a ban this year on the use of diesel trucks to transport coal at northern ports in provinces like Hebei and Shandong, and in the city of Tianjin.
“We are seeing a blowout in LNG trucks this year, thanks to the government’s policy push,” said Mu Lei, marketing manager for China National Heavy Duty Truck Group [CNHTC.UL], known as Sinotruk, the country’s largest manufacturer of heavy-duty trucks.
The shift to gas trucks is helping fuel demand for LNG in China, as are other government measures aimed at clearing the air, especially in the north, which is shrouded in a hazardous coal-fueled smog for much of the winter.
One major project is piping gas to 1.4 million households across the north for heating this winter, shifting away from coal.
China, already the world’s No.3 LNG consumer, has seen imports jump 45 percent so far this year. [O/CHINA7]
Chinese companies like Jereh Group and ENN Energy Holding, which build LNG filling stations, and Zhangjiagang CIMC Sanctum Cryogenic Equipment Co., Ltd, which specialises in LNG tanks, are expected to benefit from the gas boom, analysts said.
Government restrictions on cargo overloading last year, for safety reasons, has also driven truck sales as operators rushed to buy bigger trucks.
Pictures show customers with their new liquefied natural gas (LNG) trucks at a heavy-duty truck shop in Yutian county, China's Hebei province September 29, 2017. REUTERS/Jason Lee
Next month, Beijing will also impose restrictions on thousands of northern factories using diesel trucks, forcing many to use more rail and others to consider gas-powered lorries.
Sales of new heavy-duty trucks, including diesel and LNG vehicles, jumped 75 percent in the January-August period to 768,214, according to industry website www.chinatruck.org.
It did not break down the numbers, but companies say that diesel growth is being dwarfed by that of the LNG trucks.
Last week, Sinotruk netted new orders for 1,371 heavy-duty trucks, 900 of which run on LNG, at an event bringing together coal transport companies from seven northern Chinese cities, Mu said. In the first half of this year, Sinotruk sold 5,200 LNG trucks, up 650 percent year on year.
“Gas trucks are both more environmentally friendly and more economic,” said Lai Wei, general manager of Tianjin Shengteng Transport Company, a privately-run trucking company.
Lai is tripling his LNG fleet to more than 100 by the end of this year, adding 65 new trucks made by Shaanxi Heavy Duty Automobile Co. Ltd [WCPOWA.UL], the country’s largest LNG vehicle producer.
Slideshow (7 Images)
He is also cutting back his diesel fleet to 30 from 50 previously because of the new emissions rules in Tianjin that come into effect this month.
Only vehicles meeting “National Five” emissions standards, similar to Euro V standards for trucks and buses in Europe, will be allowed to operate at the port.
Lai said he was also concerned that there might be further restrictions on diesel trucks in a few years.
China, the world’s top energy guzzler, wants gas, which emits half the carbon dioxide as that of burning coal, to supply 15 percent of energy demand by 2030, up from 6 percent currently.
That effort stalled in 2014 as an oil price slump lifted demand for diesel. But as oil prices have risen in the past 20 months, rebounding to above $50, LNG sales, especially from Australia and the United States, have soared.[O/CHINA7]
Diesel costs between 10-30 percent more than gas on average currently at Chinese gas stations, according to truck companies.
For Su, the new truck owner in Yutian, about 140 kilometers to the east of Beijing, price is a major reason for making the switch from diesel.
He plans to hire two drivers to shuttle the 3,500 kilometers between Yutian and Urumqi, in the northwestern region of Xinjiang, to carry steel products west and coal or other goods on the way back.
“It really suits our journeys as the longer the trip, the more you save on fuel on an LNG truck,” he said. He is paying 390,000 yuan for a Sinotruk rig, about 60,000 yuan more than a diesel truck would have cost.
“On a return trip, we can save 3,000 yuan in fuel,” he added. “That means we’ll be able to recoup within a year the extra cost on the vehicle.”
Reporting by Chen Aizhu; Editing by Philip McClellan
Our Standards:The Thomson Reuters Trust Principles.
The country’s leadership has realised that quality of life is just as important as the material benefits of GDP and job creation. But the task ahead calls for a much greater commitment
PUBLISHED : Monday, 09 October, 2017, 2:57am
UPDATED : Monday, 09 October, 2017, 3:23am
POLICIES & POLITICS
Demand for LNG trucks soars under China’s war on pollution
8 Oct 2017
POLICIES & POLITICS
China will struggle to hit pollution targets, minister admits
5 Oct 2017
Abseiling cleaners remove tonne of litter a day at beauty spot
4 Oct 2017
China’s rise has been so focused on economic growth, to the exclusion of all else, that its people find their environment mired in the by-product of pollution. By one measure of potential for stirring public discontent and social instability, pollution now ranks ahead of administrative and legal injustice. That has got the top leadership’s attention. As a result progress in restoring the health of the country’s air and water is beginning to rank with gross domestic product as a yardstick by which officials are assessed for advancement. They are now striving to balance pollution control with growth.
Environmental issues have become an increasingly pressing cause of social instability. The Chinese Academy of Social Sciences reported that half of protests with more than 10,000 participants between 2001 and 2013 were sparked by concern about pollution.
Chinese environmental minister admits country will struggle to hit pollution target this year
One official response, a trial of a pilot scheme to clean up the mainland’s waterways involving “river chiefs”, is showing results. The names and contact details of river chiefs are posted alongside waterways, so citizens can report threats to water quality such as illegal discharges or algal blooms.
At the end of August, according to the Ministry of Water Resources, the authorities had appointed some 200,000 river chiefs across the mainland. It says something about the extent of the problem that this number only ripples the surface. After a decision by the top leadership to assign a steward to every waterway in the country, millions more are expected to be installed nationwide. A similar plan for bay areas, launched this year, is being expanded from five pilot schemes. River chiefs are government cadres of all ranks, assigned to a particular river or segment according to its importance.
China will meet 2020 carbon reduction target, Xie Zhenhua says
The mainland’s air quality improved in 2014 and 2015, thanks to emission curbs and cuts in coal usage. But a state-led infrastructure boom, aimed at achieving a targeted pace of growth amid an economic slowdown, prompted factories to ramp up production, to the detriment of air quality, particularly in industrial regions.
The underlying problem in the past has been the lack of an incentive mechanism for pollution control amid emphasis on GDP and job creation, reflected in the way local officials paid lip service to it. The river-chief system, involving changes in administrative structure and making people accountable for cleaning up the environment, is evidence that the country’s leadership realises quality of life is just as important as the material benefits of GDP and job creation. The task calls for a much greater commitment in the long run. But at least the real consequences of pollution are beginning to dawn on China and its leaders are trying to see that it is taken seriously.
Shanghai International Marathon
Demand outstrips supply for the 38,000 places on the Shanghai International Marathon. Photograph: JPHU
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Helen Roxburgh in Shanghai
Thursday 5 October 2017 06.45 EDT Last modified on Thursday 5 October 2017 06.46 EDT
On a clear, balmy night in Shanghai, a group of lycra-clad runners stretch their hamstrings in the city’s Xuhui district, sporting an array of headphones, water bottles and Fitbits. The group, known as RunnersHai, are meeting for their weekly training – half are practising for a marathon, others are just in it for the exercise.
“Running in Shanghai initially seemed like an impossible challenge – even walking the streets is dangerous because of cars and other vehicles,” says Wang Hui, 26, from Anhui. “But with other runners, we can find better locations together for running.”
Tonight the group is running on the West Bund, a former industrial site by the river that has been newly converted to host art galleries, restaurants and public space for sports, including a running track, basketball hoops and climbing wall. The pleasant riverside stretch is popular among runners – a rapidly expanding group in the city – and Hui, who has a knee injury, prefers the soft surface of the track to hard city pavements.
“The riverside is my favourite, favourite place to run in the city,” says Grace Guan, 31, an experienced runner who last year took part in eight different events, and has already secured a place for this year’s Shanghai International Marathon.
The state-organised Shanghai Marathon launched in 1996 with 5,000 runners; by 2016 there were 38,000. Now, demand outstrips supply – many of the RunnersHai group tried unsuccessfully to get a place in the lottery-allocated system. As well as the marathon, the city also organises a half-marathon, which recently attracted 20,000 runners, a 10k run which drew 8,000, and a mini-run of 500 people.
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More and more running-focused infrastructure is being built in Shanghai to accommodate its growing jogging community. Photograph: Helen Roxy
To accommodate Shanghai’s army of runners, the government has extended the West Bund in the last few months, turning a 3km track into a 15km loop, with amenities along the way such as toilets, signage and water pitstops. Even showers are promised in the future.
The city’s Century Park has a new 5km public running track that was completed this year, lined with leafy trees and bright lighting. And on the city’s Chongming Island, an 8km smart running track was tested this year, equipped with devices such as facial recognition, which can calculate a runner’s average speed over certain distances, plus heart rate monitors to gauge health levels.
Picturesque spots on the outskirts of Shanghai are being promoted as running sites, including Dishui Lake, the home of a triathlon. Runs designed to fit with the city’s urban fabric include a charity Vertical Run to the 57th floor of the Shanghai IFC building.
Shanghai is not unique in seeing exponential growth in the number of runners. In 2011, China had 22 marathons or other running events, according to Xinhua, but there will be more than 400 this year – 54 new cities have introduced marathons in the last year.
By 2020, the target is more than 800 marathons and races nationally, with more than 10 million participants to “promote a healthier China”, says Du Zhaocai of the China Athletics Association.
According to Nielsen, running has acquired a position of status in China, and middle-class professionals with a level of higher education are more likely to take it up.
The Nike+ Running Club hosts daily events in Shanghai, and attendees can join an hour-long running group wearing a pair of Nike trainers, to test them out for size. It draws in a crowd of largely young office workers, and is booked out days in advance.
New West Bund running track and riverside routes for Cities.
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River run: the new West Bund track by the riverside in Shanghai. Photograph: Helen Roxy
Adidas is also very visible in the market with its “Runbase” centre on the West Bund, complete with lockers, merchandise for sale and indoor training space.
“Some sports retailers have enormous flagship stores here that have seen enormous growth – as much as 65% year on year,” says Rebecca Tibbott, head of retail at CBRE China.
However, runners in Shanghai still have plenty to contend with, including the city’s large numbers of humans and cars. Many resort to running in cycle lanes – which is far from ideal. Buses and taxis frequently pull across lanes to deposit commuters, while dog walkers, wheelchair users, parents with prams and general amblers frequent the space – plus a ballooning number of cyclists, following the introduction of hugely popular bike-share schemes.
Even the new running space at the West Bund is often crowded, already popular with the city’s elderly, young families and students. And with 10 new 30-storey apartment blocks under construction opposite, the area looks set to become significantly more crowded in the near future.
“The government has done a lot to improve the city for exercise,” considers Hui, taking a diversion off the track to move around the crowds. “But much can still be done.”
Other problems include the city’s physical size. Both the West Bund and Century Park are outside the city centre, prompting logistical problems for downtown joggers who use the routes, necessitating sweaty metro or taxi journeys home.
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The popularity of running is not unique to Shanghai, 54 Chinese cities have introduced marathons in the last year. Photograph: PR
Aside from temperatures that can reach as high as 40C, runners also have to contend with high levels of air pollution. A study by a team of researchers at Peking University found that in China’s top five cities air pollution readings remained higher than World Health Organisation’s upper safety limit, despite improvements over the last three years. Even the best rated cities, Shanghai and Guangzhou, did not have more than 37% “good” air days.
Mark Zuckerburg inadvertently sparked an online debate in China when he posted a picture of his so-called “smog jog” in Tiananmen Square last year. It followed soaring levels of hazardous smog in the 2014 Beijing Marathon, and during a polluted 2015 event, local newspapers reported that six runners and one official were taken to hospital.
Many people cancel runs when the pollution gets too high, but scientists are divided over the long-term detriments of jogging in polluted air. Research into the damage of exercising in pollution is still evolving. A 2012 review published in the New England Journal of Medicine estimated daily bicycle trips in polluted cities took up to 40 days from a person’s average lifespan, but the additional exercise lengthened it by three to 14 months.
“Increasingly, we are starting to understand that even low levels of pollution may contribute to serious health impacts beyond the acute reactions that we normally think of like respiratory, and cardiovascular problems,” says Sieren Ernst, founder of environmental consultancy Ethics & Environment. “So is it safe to exercise in air pollution? We know air pollution is bad for human health, and exercise increases exposure. In general, it’s not safe to breathe air pollution, and so no – it’s not safe to exercise in it.
Tipping point: revealing the cities where exercise does more harm than good
“That said, there is a lot of anxiety among public health officials about saying these things, because of course there are benefits to exercise, but we really don’t have have enough of a grip about the total impacts of air pollution to making strong statements about these tradeoffs.”
A study in the journal Preventive Medicine suggested the negative health impacts of as little as 60 minutes of cycling in some of China’s most polluted cities would outweigh the benefits.
“Running on a treadmill with filtered air is going to be healthier than running outside in a polluted city,” Ernst agrees but warns, “having filtered air is key.”
For many, running on a treadmill is the most practical way of achieving serious training, even if it is expensive and less enjoyable than outdoor running.
“At the end of the day, it is easier to run on a treadmill,” says Grace Guan. “When I’m training for the marathon I will have to start using the treadmill. It’s just easier because there’s no disruption to your run. I enjoy running on the streets in Shanghai, but it’s much more difficult – you have to keep stopping, and dodging people and things coming from all directions.”
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China diverts 10 billion cubic metres of water to arid north in massive project
Wednesday, 4 October 2017 02:19 GMT
Water supplies in north have been challenged by droughts, a surging population, agriculture, and manufacturing growth
BEIJING, Oct 4 (Reuters) - China has transferred 10 billion cubic meters of fresh water from the country's south to its drought-prone north in the few years since a massive water diversion project came onstream, authorities said on Tuesday.
In recent decades, water supplies in north have been challenged by protracted droughts, a surging population, agriculture, and unprecedented manufacturing growth.
China aims to ultimately supply 44.8 billion cubic meters annually to the north via the ambitious water diversion project. That would be about seven percent of the volume of water consumed by the entire country in 2015.
The expensive engineering project, which involves transferring water from the south via three major routes, was first mooted as early as the 1950s.
Along the middle route, the water pumped from the Yangtze River has gone to Beijing, Tianjin and the provinces of Henan and Hebei, according to the South-to-North Water Diversion Office under the State Council, or Cabinet.
The middle route carries water through canals, water highways and pipelines from Danjiangkou reservoir in central Hubei Province. It came into operation in late 2014.
The project has supplied 2.7 billion cubic meters of water to Beijing, serving 11 million people.
Currently about 70 percent of Beijing's water supply comes from the project. Previously the city's water supply came mainly from underground water.
Tianjin received 2.2 billion cubic meters of water while Henan and Hebei got 3.5 billion cubic meters and 1.1 billion cubic meters, respectively.
China aims to keep national annual water consumption below 670 billion cubic metres through to 2020, as part of efforts to ease chronic regional shortages by cutting waste and boosting efficiency.
(Reporting by Ryan Woo; Editing by Michael Perry)
hina is on track to fulfil or possibly surpass its commitment of cutting its carbon intensity by 40 to 45 per cent from 2005 levels by 2020, the country’s chief negotiator at the Paris Agreement has said.
Xie Zhenhua said in Hong Kong on Tuesday that despite the United States’ planned withdrawal from the agreement, China’s commitment to fight climate change is unwavering.
China has already cut its carbon intensity – the amount of carbon emissions per unit of GDP growth – by 39 per cent this year while sustaining economic growth, said Xie, who is also former head of the State Environmental Protection Administration.
“There should be no problems meeting the 40 to 45 per cent target in 2020. (China) may even do better than that,” he said.
Xie was in Hong Kong to receive one of the three Lui Che Wo prizes for his efforts in tackling global warming. He will be donating the HK$20 million prize money to the Tsinghua University Education Foundation. He is the winner in the sustainability category.
Earlier this year, US President Donald Trump announced his decision to withdraw his government’s ratification of the international agreement to limit emissions of greenhouse gases. He said at the time that the agreement “is less about the climate and more about other nations gaining a financial advantage over the United States”.
Trump’s decision reversed a key pillar of former President Barack Obama’s effort to combat an increase in global temperatures, which scientists say has been hastened by the burning of coal, oil and other fossil fuels.
The move also cedes global climate action leadership to China.
Xie said that the US’s withdrawal would not harm China’s commitment to fight climate change. China’s position on the agreement has been very clear, he said, as President Xi Jinping has already made clear that the agreement did not come easily and so should not give up on it easily.
The chief negotiator also said that the US’s withdrawal would not harm other countries in fulfilling their commitments, saying that many countries have already stated they would adhere to the agreement.
On his thoughts about receiving the prize, Xie said it is more than a personal encouragement.
“It is not only a great encouragement to me,” he said.
“But also the recognition of our country’s long-term efforts and achievement of coordinating of both domestic and international dimensions, transiting from tackling the challenge of climate change to promoting the historic opportunity to achieve sustainable development and pushing the transition towards green low-carbon development.”
Awards in the other two categories – positive energy and welfare betterment – went respectively to the International Paralympic Committee (IPC) and Landesa, a non-governmental organisation based in the US that has helped to secure land rights for 120 million poor rural families in 50 countries since 1967.
For a brief and shining moment in 2012, Australia was at the global forefront of climate change action, as one of the first countries to implement a carbon pricing mechanism. It lasted only two years, and was repealed amid much fanfare by the Abbott government in July 2014.
During its time, Australian companies and industries exposed to the carbon pricing mechanism took a long hard look at the emissions liabilities embedded within their supply chains and worked to reduce them.
Barely three years later, Australia is in danger of being the kid that gets picked last for the soccer team. With China set to launch its national emissions trading scheme (ETS) before the end of the year, and several other Asia-Pacific nations either doing the same or already in the game, so-called ‘carbon clubs’ are forming and Australia isn’t invited.
So what will it mean for Australian companies when our biggest trading partner – China – introduces their ETS?
“Our energy-intensive exports sit directly in the supply chain of the world’s largest carbon market, where their customers are going to have a liability around the carbon price,” says Peter Castellas, chief executive of the Carbon Market Institute. “That will send a market signal of real significance.”
Supply chain emissions – known as Scope 3 emissions under the Greenhouse Gas Protocol – refers to those generated outside the direct control of a business. These could be from the extraction and production of products purchased by the business, third-party transport and distribution, and the end use of its products.
For many companies, these Scope 3 emissions are likely to be the largest part of their carbon emissions, compared to those generated by the company itself. For example, US company Kraft Foods found its Scope 3 emissions represented more than 90% of its total emissions (pdf).
Supply chain emissions are already being targeted by many multinationals around the world; US retail giant Walmart recently asked its suppliers to help it achieve their goal of removing one gigatonne of carbon dioxide from its Scope 3 supply chain sources by 2030.
Chinese companies operating under an ETS may well undertake similar initiatives to reduce their carbon footprint, which could put Australian companies in that supply chain under pressure.
The recent announcement has added a few more details to the scope of the scheme.
Chinese government adviser Zhang Xiliang from Tsinghua University told the AFR that it will begin with power generators and expand to encompass eight key sectors by 2020, including steel making and aluminium.
The national scheme was first announced by Chinese president Xi Jinping in September 2015, during a visit by then-US president Barack Obama. At that time, China had been testing the waters since 2013 with pilot schemes in seven cities including Beijing, Shanghai, Guangdong and Shenzen.
Incorporating power generation into the scheme is another step in China’s ongoing shift to a low carbon energy mix. It also raises further questions over the future of Australia’s coal exports to China, worth $4.2bn in 2015.
“Anyone exporting coal to China needs to be worried; they should simply expect that China will not import coal,” says Prof Frank Jotzo, director of the Centre for Climate Economics and Policy at the Australian National University.
However Tom Luckock, partner in law firm Norton Rose Fulbright’s Beijing office, says China has been moving away from coal-fired power long before the national ETS was announced.
“China has and uses a number of tools to control emissions and it has done so very successfully for a number of years, and in many cases they will have a much larger impact than a carbon market,” Luckock says.
“If you combine an ETS plus this very clear policy in terms of shutting down coal-fired power stations, plus you add in unofficial restrictions on new bank lending for coal fired power stations, plus you add renewables targets for power companies and local officials, together with tax incentives and high tariffs for renewables; all of this will have an impact back in Australia,” he says.
Coal is a small part of the many goods and services that Australia exports to China. That export market, worth $93bn in 2016, includes metals and metal ores – iron, gold, aluminium and zinc, for example – as well as a huge range of other products, from wool and wheat to medicines and machinery parts.
Elisa de Wit, partner and head of climate change at Norton Rose Fulbright, says any Australian business that deals with China could be affected.
“Our sense though is that … perhaps there hasn’t been sufficient attention directed towards the impacts for that supply chain arrangement, and particularly for Australian business,” de Wit says.
The launch of China’s national carbon market could also harm the competitiveness of Australian products.
Jotzo suggests one effect of the scheme will be to encourage Chinese firms to invest in newer, more efficient production facilities, and pressure out the older, less efficient installations. This could be helped by incentives, like those built into the European Union ETS, which shield domestic industries from competitive disadvantage abroad because of the additional impositions of the carbon pricing mechanisms.
“So once that all works its way through, China will have a more efficient heavy industrial sector as a result of this, and in the longer term will be able to better compete with international competitors,” he says.
China is not the only nation in the Asia-Pacific region to take steps towards emissions trading schemes. South Korea launched one in 2015, Japan has a cap-and-trade program for Tokyo, New Zealand launched an ETS in 2008, and Taiwan, Singapore, Thailand and Vietnam are looking at reducing emissions through a pricing and trading schemes.
Australia’s lack of a carbon pricing mechanism could see it lag behind in the region, says Castellas, as countries that do have them begin to link their carbon trading markets.
“When you have Japan, [South] Korea and China having discussions around a north Asian carbon club; when you’ve got China and Korea having discussions around how do we treat emissions across borders and what’s the lowest cost to our economies to meet our emissions targets; when you have China and New Zealand having those conversations about establishing direct engagement because they both have a functioning carbon market with a price; those conversations and those emerging what’s being called ‘carbon clubs’ is something that Australia should be participating in,” he says.
Jotzo also warns Australia could be more subtly frozen out as a trading partner with China.
“Quite irrespective of the specific provisions for shielding Chinese industries and all the rest of it, China will then tend to say ‘well hang on …we’re doing the right thing for the global climate, why should we accept imports from countries like Australia or the US where industries are not under any similar obligation’, and that will be an argument in favour of trade restrictions of one form or another,” he says.
A Chinese national ETS is not all bad news. Despite our lack of a national carbon pricing mechanism, de Wit says Australia still has something to offer countries that implement them.
“We do see that there’s the potential opportunity for the learnings that have come out of our own offsets market, which has now been in operation for over six years, for some of that expertise to be exported as well into China,” she says.
It is also possible China might exhaust its domestic carbon offset credits, and Australia could find an opportunity in exporting those to China.
“It’s an interesting dynamic in terms of thinking about what happens under the Paris agreement, and once the emissions reduction opportunities have been completely extinguished, how you then look at offsetting and where those offsetting opportunities are actually going to come from,” de Wit says.
One thing is certain: there are more questions than answers about China’s ETS, and the details are eagerly awaited. A spokesperson for the department of foreign affairs and trade said it will be paying close attention to the effects of policy developments on Australian business.
“Once the details of the scheme are made available, we will continue to engage closely with Australian exporters to ensure our advocacy with the Chinese authorities is targeted and appropriate.”
Banks and regulators in Southeast Asia should strengthen financial-sector rules and guidelines to promote funding for environment-friendly projects in a region threatened by deforestation and climate change, the World Wildlife Fund said.
Measures to promote sustainable finance in the region are “high level,” and don’t involve the incentives or penalties which would get banks to properly integrate environmental policies into their lending practices, the WWF said in a survey of 34 large Southeast Asian banks published on Tuesday. The region’s banks have “significant leeway” to decide which environmental risks are material, the report said.
“Only when banks and policy-makers in charge of climate change and sustainable development work together will we create a level playing field for banks and prevent a race to the bottom of sustainable finance standards," said Jeanne Stampe, the WWF’s head of Finance & Commodities for Asia.
Though Southeast Asian nations have committed to the 2015 Paris Agreement on climate change, they have yet to align fully their regulations governing finance, the WWF said. Sustainability isn’t yet formally included in the mandate of the boards or senior management of banks in the region, the report added.
Click here to read a QuickTake on the climate change debate
The WWF study looked at information disclosed by the 34 largest banks in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam. Only 12 of them have taken steps to direct their lending toward more sustainable activities through the use of exclusion lists and sector policies, the report said, without disclosing the names of the individual banks.
The Southeast Asian region has suffered from rapid deforestation due to the growth of palm oil, pulp and paper, and rubber industries, as well as infrastructure projects, the WWF said. Banks’ lending to those activities could be affected by any change in regulations and by the agricultural sector’s vulnerability to climate change, it added.
by Alex Whiting | @AlexWhi | Thomson Reuters Foundation
Tuesday, 3 October 2017 10:03 GMT
Infections resistant to antibiotics are the greatest threat to human health
By Alex Whiting
ROME, Oct 3 (Thomson Reuters Foundation) - Giving farm animals too many antibiotics can stoke resistance to the drugs, and despite countries taking measures to curb their use in agriculture, in populous nations such as China and India antibiotic use on farms is expected to soar.
Farming experts say action is needed - especially as global demand for meat rises - to curb drug resistance.
Infections resistant to antibiotics are the greatest threat to human health, the World Health Organization (WHO) warned last month, and by 2050 some 50 million people a year may be dying of drug resistant infections, according to a major review in 2015.
"Resistance develops when bugs are exposed to antibiotics, and so the more they're exposed the faster the resistance develops," Liz Tayler at WHO said in an interview.
The more antibiotics are given to animals, or people, the more likely drug-resistant bugs will affect people's health, she said.
"Their poo gets into the system, their meat gets into the system, they pee out the antibiotics that go into the water that then humans consume," she said.
As growing and wealthier populations consume more meat, antibiotic use in agriculture is expected to increase by 67 percent between 2010 and 2030, according to the World Bank. In Brazil, China, India, Russia and South Africa, antibiotic use could double in the same period.
Although some countries have made progress in cutting their use in farming, many have a long way to go.
"The fact that the agricultural sector is starting to talk about it and get involved is very encouraging," said Tayler, who is helping develop national action plans on drug resistance.
"But actually implementing things on the ground and going to scale, particularly in poorer countries, is really very slow and very, very worrying," she told the Thomson Reuters Foundation.
Several European countries have significantly cut their use.
The United States, where each year at least 2 million people become infected with resistant bacteria and 23,000 die as a result, has introduced a voluntary ban on the use of medically important antibiotics to promote animal growth.
Fast-food chain McDonald's has stopped serving chicken in the United States which has been treated with antibiotics which are important for human medicine. It plans to roll this out globally by 2027.
DON'T CUT OUT ANTIBIOTICS
Farmers use antibiotics to treat sick animals, and prevent an infection from spreading on a farm. They are also used in intensive farming to speed the growth of animals.
The use of antimicrobials - which include antibiotics used to treat bacterial infections, and other drugs used against parasites, viruses and fungi - is crucial for food safety and quality, says the U.N. Food and Agriculture Organization (FAO).
"(It) is not simply a matter of taking antimicrobials away, because they are vital ... for animal welfare, food safety and security," said Suzanne Eckford, antimicrobial resistance officer at FAO.
But they should not be used as a substitute for good farm hygiene and better ways of managing animals, she said.
Changes needed include better tracking of animals from farm to consumer, regulation of antibiotic use and better hygiene on farms, said Juan Lubroth, chief veterinary officer at FAO.
"If you ask if we're doing enough to diminish the use, I'd say no we're not, because we don't have the systems or research in place to be able to offer possible alternatives," he said.
Research is needed to produce more affordable and quality animal vaccines, develop alternative treatments to antibiotics, and improve diagnostics, he said.
More than half of countries lack strong laws governing the use of antibiotics, according to the World Organisation for Animal Health (OIE).
In many countries, farmers - as well as patients - can buy antibiotics over the counter without a prescription. They can also end up buying cheaper, but ineffective, counterfeit drugs being sold in the street.
KNOWLEDGE IS KING
It took European countries decades to make the changes needed to address the issue, so countries like Burundi, Bolivia or Bhutan cannot be expected to do it overnight, Lubroth said.
The first step is to know where drugs are being used, how much are used, and improve veterinary services in developing countries, said Matthew Stone, OIE's deputy director general.
"Encouraging a worldwide statutory ban is not going to be effective when the veterinary services don't have the basic means of regulating the use of antimicrobials, let alone the ability to regulate for and enforce a ban," he said.
In the meantime the clock is ticking.
Some cheap and - until recently - highly effective antibiotics can no longer be used to treat people in many countries, said WHO's Tayler.
There have even been signs of emerging resistance to the antibiotic colistin which is used as a last resort to save people's lives when all other drugs have failed.
The impact of losing cheap and effective antibiotics for treating people will be felt hardest in developing countries, Tayler said.
"They have more infection sloshing around, less other ways to treat it," she said. "...nearly every country has got more to do". (Reporting by Alex Whiting @Alexwhi, Editing by Ros Russell.; Please credit the Thomson
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