Connect with us

Emerging Markets

China’s net-zero target is a giant step in fight against climate change

Published

on


The writer is chair of the Energy Transitions Commission

Xi Jinping’s announcement last week that China would achieve carbon neutrality before 2060 was greeted with surprise. Few outside China expected this hugely important commitment so soon. But it reflects three motivations: awareness in China that climate change will cause it huge harm; a desire to be a responsible global leader; and growing confidence that technological progress can make net-zero emissions attainable without interrupting China’s path to prosperity. 

That confidence is justified by dramatic global changes over the past 10 years. Solar electricity costs have fallen by 90 per cent, wind by 60 per cent and lithium-ion battery costs by 87 per cent. Initial public subsidies have created such strong economies of scale and steep learning curves that the need for subsidies is diminishing fast. Over the next decade, the cost of producing green hydrogen via electrolysis will also fall significantly.

As a result, countries can now build zero-carbon electricity systems with total costs no higher than for fossil fuel-based systems. They should electrify as much of the economy as possible. In passenger road transport, that will be straightforward and cheap. In more challenging sectors, such as steel and cement, aviation and shipping, carbon capture and storage, bioenergy and hydrogen will also play a role.

As the Energy Transitions Commission’s “Making Mission Possible” report shows, all sectors in developed economies could achieve zero emissions by 2050 — and all developing countries by 2060. They can do so largely within their own operations rather than relying on “offsets” bought from elsewhere. The estimated cost, around 0.5 per cent of global gross domestic product in 2050, will be immaterial compared with the potentially catastrophic impact of uncontrolled climate change. Because China will by 2050 be a fully developed rich economy, its “before 2060” target should at some stage be advanced to 2050. Given its technological prowess and commitment to combat climate change, it almost certainly will. 

More than 1,100 businesses and 45 of the world’s biggest investors have already set net-zero targets. Those commitments will drive tech developments that reduce the cost of achieving them, encouraging others to commit. The chances that the global energy and industrial system will get close to net zero by 2050 are now high.

But the chances of avoiding seriously harmful climate change remain worryingly low. Zero carbon by mid-century is essential, but not sufficient. From January to June this year, Siberian temperatures were 5C above average; massive wild fires have ravaged Australia and California; exceptional heatwaves scorched northern India; and China has faced huge floods. By 2050, these effects could get far worse even with a zero carbon economy. Accumulated emissions over the next 30 years matter as much as the level in 2050.

The effects so far reflect global warming of just 1.1C above pre-industrial levels. To limit warming to 1.5C, we must not only achieve zero emissions by mid-century, but cut emissions 50 per cent by 2030 after an increase of emissions of 10 per cent in the past decade. Achieving that latter cut will be more difficult than zero by 2050. With clear targets and strong policies, we can transform our energy and industrial systems over 30 years. But in the near term, the potential is constrained by capital equipment — from internal combustion engines to coking coal blast furnaces — already in place.

Action over the next decade is therefore just as crucial as mid-century targets. All growth in electricity systems should now come from zero-carbon sources, and all rich countries should close existing coal plants as fast as possible. Road transport electrification should be accelerated by early bans on the purchase of new internal combustion vehicles. And consumers have an important role to play: reducing car and air travel can cut emissions in the years before zero-carbon options are widely available. 

Twice weekly newsletter

Energy is the world’s indispensable business and Energy Source is its newsletter. Every Tuesday and Thursday, direct to your inbox, Energy Source brings you essential news, forward-thinking analysis and insider intelligence. Sign up here.

But this will not be enough to deliver the 2030 target. So that means there is a major role for “nature-based solutions” — preventing deforestation and sequestering carbon in soils by changing the way we use land. Countries and companies should therefore commit not only to reaching net zero by 2050, but to making big reductions by 2030, using purchased offsets to achieve faster progress than internal action can achieve.

Last week was a great one in the fight against climate change. Now we need commitments to the challenging objective of big emissions reductions over the next decade. 



Source link

Emerging Markets

Toyota faces Thai bribery probe over tax dispute

Published

on

By


Toyota is under investigation in Thailand over allegations that consultants hired by the world’s largest carmaker tried to bribe local officials in a tax dispute, according to Thai authorities, court documents and a person with knowledge of the matter.

The probe followed a filing last month in which Toyota revealed that it had reported “possible anti-bribery violations” related to its Thai subsidiary to the US Department of Justice and Securities Exchange Commission.

Toyota is one of the biggest foreign investors in Thailand, where it makes a large range of cars, vans and pick-up trucks for the local market and for export. The country is Toyota’s biggest manufacturing hub in south-east Asia. Prior to the Covid-19 pandemic, car sales had been strong in a market, where it has a 31 per cent share.

This month, Thailand’s Court of Justice said in a statement that it would take action against any of its judges found to have taken bribes. The statement, which the court described as a move to “clarify facts” in a news report on a foreign website, directly referenced a tax dispute involving Toyota.

“If the Court of Justice has received information or explicitly found that any judge committed an act of corruption to their duty, whether it is about bribery or not, the Court of Justice will resolutely investigate and punish any action which dishonours judges, undermines the neutrality of the court, or causes society [to] lose faith in the Thai justice system,” it said.

According to the court, the case involved a tax dispute worth Bt10bn ($320m) between Toyota Motor Thailand and tax authorities over imports of parts for its Prius hybrid model. 

The affair dates back to 2015, when Toyota’s Thai subsidiary was accused by local customs authorities of understating taxes by claiming that the imported Prius vehicles were assembled from completely knocked down kits, or imported parts that were later assembled in Thailand.

CKDs would have been subject to a discounted tax rate under a Japanese-Thai free trade agreement, but if the cars were fully assembled before being imported they would have attracted a much higher rate. 

Toyota appealed against a decision by customs authorities to impose a higher duty in 2015, but lost. 

Thailand’s Court of Justice has said that it had accepted a petition to review the case, but had not yet begun hearing it.

In its regulatory filing last month, Toyota warned that the US investigations regarding its Thai subsidiary could result in civil or criminal penalties, but the company has not disclosed any detail on the allegations.

In a statement, Toyota said it was co-operating with the investigations and declined to comment on the tax dispute in Thailand. “We take any allegations of wrongdoing seriously and are committed to ensuring that our business practices comply with all applicable government regulations,” it said.

The SEC and the DOJ declined to comment.



Source link

Continue Reading

Emerging Markets

Boris Johnson cancels India trip after Covid cases surge in country

Published

on

By


UK prime minister Boris Johnson’s trip to India this month has been cancelled as the country battles a new variant and a surge in coronavirus cases that is overwhelming hospitals.

A joint statement by the British and Indian governments said the decision to scrap the visit scheduled for next week was prompted by the “current coronavirus situation”.

The trip, during which Johnson had hoped to discuss the prospects of a closer trading partnership with India, was initially planned to run for four days but had been scaled back. The two leaders will speak remotely instead, with plans to meet in person later this year.

The cancellation came as India’s capital city region has been put under lockdown and authorities have prohibited the use of oxygen except for essential services, as the country battles a surge in coronavirus cases that is overwhelming hospitals.

India continues to set single-day records of coronavirus cases, reporting more than 273,000 new infections and 1,619 deaths on Monday, with the number of new cases growing by an average of 7 per cent a day, one of the fastest rates in any big country.

The surge is believed to be linked to a new B.1.617 variant that was first discovered in the country.

British health officials are investigating whether the variant should be reclassified from a “variant under investigation” to a “variant of concern” following the discovery of 77 cases in the UK.

“To escalate it up the ranking we need to know that it’s increased transmissibility, increased severity, or vaccine-evading, and we just don’t have that yet, but we’re looking at the data on a daily basis”, Dr Susan Hopkins, a senior medical adviser at Public Health England, said on Sunday.

Officials in Delhi announced it would impose a strict lockdown for a week, following Mumbai and other cities that have already placed curbs on movement.

States are running short of beds, drugs and oxygen, leading the central government to restrict use of the gas. “The supply of oxygen for industrial purposes by manufacturers and suppliers is prohibited forthwith from 22/04/2021 till further orders,” the central government said.

Arvind Kejriwal, chief minister of Delhi, said “oxygen has become an emergency” in the region because its quota had been diverted to other states. He warned there were “less than 100 ICU beds” available.

The new restrictions have been imposed even as Prime Minister Narendra Modi and his ruling Bharatiya Janata party have hosted huge political rallies and allowed religious festivals attended by tens of thousands of maskless people in recent weeks.

Amit Shah, India’s home minister, told the Indian Express newspaper that he was “concerned” about the variant and the “surge is mainly because of the new mutants of the virus”. But he was “confident we will win” over the disease and said there was not yet a need to impose a national lockdown.

Bed shortages in India have forced authorities to re-establish emergency coronavirus hospitals in banquet halls, train stations and hotels that had been shut down following the previous peak in September. Crematoriums in the state of Gujarat and Delhi are running 24 hours a day, while cemeteries are running out of burial spaces.

Coronavirus patients have also been struggling to access medicines. More than 800 injections of remdesivir, an antiviral drug commonly used in India as part of Covid-19 treatment, were stolen from a hospital in Bhopal, Madhya Pradesh, at the weekend.

India is also facing a vaccine supply crunch and has frozen international exports of jabs to meet domestic demand. New Delhi pledged on Friday to increase monthly production of Covaxin, a vaccine made by Indian manufacturer Bharat Biotech, to 100m from 10m by September. The government also said last week that it would fast-track the approval of foreign vaccines in an attempt to boost supply and cleared Russia’s Sputnik V for use in the country.

The majority of the more than 120m Indians that have been vaccinated have received the Oxford/AstraZeneca jab manufactured by Serum Institute of India, the world’s largest manufacturer. The Serum Institute has struggled to increase its monthly capacity of more than 60m doses a month due to a fire at its plant earlier in the year and equipment supply shortages from the US.

Additional reporting by John Burn-Murdoch in London





Source link

Continue Reading

Emerging Markets

The limits of China’s taming of tech

Published

on

By


The record fine handed out this month to Alibaba, the Chinese ecommerce giant, was a welcome step toward combating anti-competitive behaviour. The $2.8bn penalty put Alibaba and other tech companies on notice that creating siloed fiefdoms designed to trap customers and merchants within their ecosystems will not be tolerated.

It was addressing a longstanding problem. Many of China’s ecommerce companies operate “walled gardens” that prevent interactions with rival platforms. For example, Alibaba’s Taobao ecommerce app keeps users from paying for goods using the payment app of rival Tencent. Tencent’s social media app, WeChat, prevents clips from being shared directly from ByteDance’s video-sharing app. 

Last week China’s internet and market regulators signalled the seriousness of their intent. They gave tech companies one month to fix anti-competitive practices, telling them to conduct “comprehensive self-inspections” and “completely rectify” problems, following which they would need to publicly promise to abide by the rules. The aim is create a commercially open and competitive internet.

It is tempting to argue that regulators in the west could take a leaf out of China’s book. But to hold China up as an example of competitive best practice would be to ignore the elephant in the room. Although Beijing is giving its monopolistically-minded internet companies — which are almost all private enterprises — a rap on the knuckles, it shows no sign of applying the same standards to vast swaths of the economy that have been dominated by state-owned giants for decades. 

The market dominance of these behemoths of state capitalism is an issue that affects not only domestic competitors but also foreign multinationals that operate in China. A trenchant joint paper last week from the European Council on Foreign Relations, a think-tank, and the Rhodium Group, a consultancy, took aim at the increasingly unfair advantages that this system gives China.

While it is true that China has opened up sectors such as financial services to foreign capital in recent years and allowed foreign brands to win market share in luxury goods and pharmaceuticals, broad sectors of the economy remain fully or partially closed or to overseas investors. 

Often the barriers erected to block or stymie competition are informal. Authorities can deliberately favour domestic companies in public procurement, are more ready to grant approval for licenses, subject foreign firms to arbitrary inspections or require them to re-engineer products to meet idiosyncratic domestic standards.

Such drawbacks are not new. But they are taking on an extra urgency as Chinese companies become leaders in an increasing number of industries and the country’s technological prowess draws level with the US and Europe in a list of industries. The key problem now, says the ECFR/Rhodium report, is that Chinese multinationals are using the advantage of a protected home market to build up resources that they then deploy in competition with western counterparts abroad.

This sets the scene for friction. China should extend its anti-monopolistic scrutiny from its own privately owned internet companies to several state-dominated sectors of its economy, taking care to open to foreign multinationals as much as domestic competitors. If it decides against doing this — as is likely — it will be furnishing Europeans and Americans with ammunition to argue against extending access to Chinese corporations in their own markets.



Source link

Continue Reading

Trending