A friend pointed me to a Telegraph article recently authored by Ambrose Evans-Pritchard. In it, Evans-Pritchard intriguingly claims that America can no longer separate trade policies from climate objectives and that the Democrats’ promised 2 trillion dollar blitz on clean energy is as much a bid for superpower supremacy as it is about climate change. This was squarely and directly aimed at no other than China.
The Biden plan may look like the earlier Green New Deal of America’s radical Left, but it is nothing of the sort. It is muscular and reeks of Great Power politics, almost a mirror image of Xi Jinping’s nationalist strategy documents, or so Evans-Pritchard says. It reads like a total reset of America’s DNA, indicating a quantum leap on the back of an ecological revolution that is meant to catapult the nation back into undisputed geopolitical leadership.
Should Biden get elected in November, America is said to commit to net-zero emissions by 2050, and net-zero emissions in the electricity sector by 2035, which sounds pretty incredible. The party’s original manifesto talked about spending 1.7 trillion dollars over 10 years. More recently, the sky seems to have become the limit. It is now 2 trillion over 4 years that are to be employed to jump-start America’s new beginning.
Of course, Biden needs to win first, and his advisors have wisely dropped the ban on fracking in order to capture key battleground states. Not to forget that, whether we will face Republican or Democratic leadership next year, the energy policy around LNG exports will still be devised to counter other providers, such as Gazprom in Europe. At the same time, a pledge for carbon capture and storage, tougher methane rules and a limitation on federal land for fracking is to be seen as a bone thrown to the Sanders-Warren camp.
The heart of the plan, however, is to electrify America with up to 200,000 miles of high-voltage transmission lines along existing rail and highway routes, including half a million charging stations for electric cars by 2030. There will also be a push for fuel cells in trucking and freight and synthetic green fuel for aviation. This is to be completed by 500 million solar panels and 60,000 wind turbines over the next 4 years. It reads like the plan from a Beijing policy initiative, almost by the letter.
Carbon prices are to ratchet up predictably, to let businesses respond accordingly. It reportedly starts at 15 dollars a ton and ratchets up 10 dollars a ton until CO2 emissions are near eliminated. Unlike the EU’s ideas to fund the apparatus’ structure and operation, the money raised in the US is to be rotated back into people’s pockets, favouring the poor and dampening people’s instincts of hitting the streets in dismay and disappointment about their government.
The foreign policy hawks around Biden seem to have quickly figured out how to use the inevitable and generational transition America’s to pivot against everyone else. Well, Europe and the rest of the Western world would, in any case, welcome Washington back into the Paris Agreement on Climate Change and gladly yield its global leadership to America. So, the trans-Atlantic world could rapidly be re-aligned. There is no issue here.
When it comes to the emerging world of preeminent polluters, a carbon border adjustment tax will be designed to limit access or even shut Paris violators out of their markets, which adds another weapon in the repertoire of trade policies and constitutes a different form of economic warfare. Biden already let it be known that he will bring global economic outlaws to heel, mentioning that he will hold China accountable and implying that he will put India’s feet to the fire if it suits America’s interests.
This new dimension in trade may easily have the largest impact on China. Despite Beijing’s own environmental policies, the country has reportedly released more CO2 and methane last year than America, the EU and Japan combined. A moratorium of those policies in favour of its industrial stimulus countering the health crisis might have China fall behind on targets this year. A point of attack is obviously also Belt and Road, accusing Beijing of the proliferation of dirty fossil fuel energy projects across Eurasia and Africa.
Apart from the vast trouble Beijing has been going through so far, courtesy of the Republican breed of hawks in the White House, an alignment in the shape of a parallel carbon border tax imposed by both America and Europe makes for slippery grounds, particularly when aggressive trade policies embedded in the context of a serious global climate rescue attempt are a much easier sell to Europe’s political class than Donald Trump’s pinch bar approach.
But before we prematurely indulge in the Biden iteration of the US-China conflict, the notion as such and Evans-Pritchard’s interpretation may sound more controversial than it needs to be. Think of it this way… Climate change is to be taken seriously. No one will dispute this, least of all the Europeans. If Biden finds his way to renew the trans-Atlantic friendship, then this is a good thing. And Brussels is clearly in need of America to be an incremental partner and to assume leadership of the project.
If a Biden presidency were to pull off such a gargantuan task of re-inventing America, it would rightly put the country back on the map and re-emphasise its sole superpower status. Naturally, it depends on how belligerently and punitively a carbon border tax was to be imposed, and how much it was designed to outright hurt China, but ultimately it is in Beijing’s interest to partake in the Paris Agreement and potentially even leave the leadership to a more constructive Washington.
As stated many times in this space, China has no particular interest in leading the world. It is pre-occupied with its humongous country and with furthering the cause of the Chinese people. What if the smart minds in Beijing did not oppose but maybe even endorsed the re-assumption of America’s global leadership under the banner of climate rescue…? I might be an elegant way of leaving all sides to their devices, on the basis that collaboration is possible and predominantly based on the ecological agenda.
It goes without saying that this will never be a walk in the park. It will require real grown-ups on all sides and diplomacy of the finest sort. Also, there is the small matter of coughing up the extra 2 trillion that will most likely not suffice, on top of the trillions per year to keep America operating. And then, there will be another trillion or more of R&D investments into other technological Manhattan projects to restore and retain America’s leadership and prop it up for a healthy competition with China.
Despite all these hurdles and the article’s implied belligerence, however, there is hope that this could be an impulse for the better.
