China has become the pacemaker for the turnaround in energy policy

China has become the pacemaker for the turnaround in energy policy

Global Challenges is a trademark of DvH Medien. The new institute wants to promote the discussion of geopolitical issues by publishing recognized experts. Today a contribution by Prof. Dr. Renate Schubert, professor of economics at the ETH Zurich. Other authors are Sigmar Gabriel, Günther Oettinger, Prof. Dr. Volker Perthes, Prof. Dr. Jörg Rocholl, Prof. Dr. Bert Rürup and Prof. Dr. Ann-Kristin Achleitner.

Who wouldn’t be for strict environmental regulations, less carbon dioxide emissions and a more sustainable use of natural resources? Apart from persistent deniers of climate change, high environmental quality is one of the most important values ​​of people worldwide. This is shown by the annual World Value Survey.

In practice it often looks different. There are only a few countries where there are strict environmental regulations that are enforced decisively. In the eternal struggle between environmental, growth and employment policies, the environment often still loses ground. Will this in view of falling pollutant emissions in as a result of the corona crisis change in the foreseeable future? And what role can environmental policy play in future geostrategic strength tests?

Multinational corporations are often based on the strictest environmental standards

As far as the economy is concerned, it works from an entrepreneurial perspective Surprisingly, profitability is that multinational corporations often form alliances in favor of strict environmental regulations that go beyond the level defined by states. For example, a long time ago European car manufacturers installed catalytic converters because American requirements required this. Additional commitment to environmental requirements that are not legally required only increases costs, one would think.

In reality, however, it is often more cost-effective for large companies to orientate themselves to the strictest environmental standard in production than in different countries to follow sometimes harder, sometimes softer requirements. For globalization drivers, strict environmental regulations make sense – especially as more and more customers are demanding environmentally friendly products.

India has no interest in emissions from Taxing carbon dioxide

But in which direction is the political trend pointing, for example on the Indian subcontinent ? In view of the enormous coal deposits, New Delhi shows little interest in taxing or increasing the cost of carbon dioxide emissions – it would give a “natural” competitive advantage. On the other hand, more and more international companies are no longer willing to send employees there and expose them to high health risks due to the increasingly catastrophic air pollution in India.

As a result, the cost-benefit balance of coal exploitation deteriorates considerably from the perspective of the Indian government – and should lead to a political rethink in the foreseeable future. New Delhi could take up environmental protection measures that were introduced in the 1970s but remained largely ineffective in practice.

China is the largest technology developer for renewable energies

India’s geostrategic rival China, in turn, is the world’s largest greenhouse gas emitter with a share of almost 30 percent, but at the same time the world’s largest developer of technologies for the use of renewable energies. The more countries rely on renewable energies, the more successful China is likely to be economically.

For this reason alone, Beijing is interested in the fact that more and more countries are applying stricter environmental standards. Since China’s new coal-fired power plants sometimes even capture the emitted carbon dioxide, Beijing’s more vigorous environmental protection policy would not have any significant economic disadvantages.

It is different in the United States, where the individual states are responsible for environmental policy – there are drivers like California and brakes like Texas, who, along the lines of US President Donald Trump, consider the topic of climate protection to be overestimated. There are arguments over oil production in nature reserves, pesticides in agriculture and more generally about soft or hard environmental protection measures. In any case, Trump and the powerful agricultural lobby are opposed to a Green New Deal.

The USA will not give impulses for more ecological business

The realization that sales of better quality products do not have to suffer despite lower sales volumes is underdeveloped. In addition, there is the three-way battle between the United States, Russia and Saudi Arabia for the title of the world’s largest oil and gas producer – as long as the era of fossil energy generation has not ended, the production of oil and gas ultimately guarantees advantages in poker for geopolitical power.

All other countries are still dependent on the countries that supply them with these raw materials. It is therefore not to be expected that the USA could provide decisive impulses for more ecological business in the next few years.

This finding also applies to Russia, although the country still suffers from the catastrophic environmental degradation from the Soviet era. Nevertheless, the administration continues to tolerate all forms of overexploitation of natural resources, such as illegal deforestation of forests. Moscow is devoting all of its energy to replacing the USA as a “leader” in natural gas, which is what the new pipeline Nord Stream 2 could also succeed. The backlash from Washington is correspondingly violent. Russia currently ranks second in oil and gas production.

Europe is passive in the geostrategic power struggle for environmental standards

And Europe? The old continent is largely passive in the geostrategic power struggle for soft or hard environmental standards – although the European Union nevertheless assumes that economic and ecological sustainability need not be contradictory. For example, the Green Deal, which the EU Commission decided at the beginning of 2020, provides for a far-reaching restructuring of energy supply, industry, transport and agriculture. It is intended to help reduce greenhouse gas emissions and at the same time enable more conscious use of finite natural resources.

Although the USA and Russia are still fighting for the title of the world’s largest oil and gas producer, there is no doubt: In retrospect, this showdown will be anachronistic. Because the future does not belong to fossil, but to renewable energies. Driven by the devastating pollution of air, water and soil in its own country, China recognized the signs of the times in good time and has meanwhile become a regenerative “pacemaker”.

This should in future bring the People’s Republic a geostrategic advantage, the importance and extent of which can hardly be overestimated. Added to this is China’s huge image gain through the first successful containment of the Corona pandemic in their own country and aid deliveries of medical equipment to Europe. No doubt: The geopolitical wind is turning – in favor of the Middle Kingdom.


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