British Government Delays Carbon Neutral Homes Until 2050 To Boost HousebuildingIn this newsletter:
1) Half Of The EU’s ‘Climate Budget’ Will Be Handouts To Farmers, Critics Warn
Deutsche Press Agentur, 6 August 2020
2) Excellent News: British Government Delays Net Zero Homes Until 2050 To Boost Housebuilding
The Independent, 6 August 2020
3) Gallup Poll: Most Americans Rank Climate Change As Least Important Issue
Climate Change Dispatch, 7 August 2020
Deutsche Press Agentur, 6 August 2020
2) Excellent News: British Government Delays Net Zero Homes Until 2050 To Boost Housebuilding
The Independent, 6 August 2020
3) Gallup Poll: Most Americans Rank Climate Change As Least Important Issue
Climate Change Dispatch, 7 August 2020
4) Australia’s Universities Face Sweeping Review Of Free Speech Code
The Australian, 6 August 2020
The Australian, 6 August 2020
5) China’s Geostrategic Priorities Become Clear: Oil Not Wind…
GWPF Energy, 7 August 2020
6) China And Iran Approach Massive $400 Billion Deal
Ariel Cohen, Forbes, 17 July 2020
GWPF Energy, 7 August 2020
6) China And Iran Approach Massive $400 Billion Deal
Ariel Cohen, Forbes, 17 July 2020
Full details:
1) Half Of The EU’s ‘Climate Budget’ Will Be Handouts To Farmers, Critics Warn
Deutsche Press Agentur, 6 August 2020
Half of all spending that the EU counts under its climate umbrella isn’t actually to be spent on reducing CO2 emissions: instead, it is funding the EU’s Common Agriculture Policy.
1) Half Of The EU’s ‘Climate Budget’ Will Be Handouts To Farmers, Critics Warn
Deutsche Press Agentur, 6 August 2020
Half of all spending that the EU counts under its climate umbrella isn’t actually to be spent on reducing CO2 emissions: instead, it is funding the EU’s Common Agriculture Policy.
When then-defence minister for Germany Ursula von der Leyen ran for the European Union’s top job last year, she pitched herself as a climate enthusiast.
“We must go further. We must strive for more,” she said during her candidate speech at the European Parliament. “I want Europe to become the first climate-neutral continent in the world by 2050.”
She got the job, and has been serving as European Commission president since December.
Under her leadership, the commission — though the initial proposal pre-dates her presidency — suggested spending 25% of the European Union’s seven-year budget and the coronavirus recovery package on “climate targets.”
The EU governments pushed for even more, and committed to spending 30% of the EU’s budget on climate — a 10% jump from the 2014-20 budget. With a total package of 1.8tn euros ($2.1tn), the climate tag comes in at 600bn euros.
But while that might sound good on paper, environmentalists remain sceptical.
“The problem is right now it’s turned into massive greenwashing,” said Berenice Dupeux, senior policy officer for agriculture at the European Environmental Bureau, a network of various environmental groups.
She said most of the spending that the EU counted under its climate umbrella — about 50% — isn’t actually to be spent on the environment: instead, they went to the union’s Common Agriculture Policy, without setting additional climate criteria.
And a large chunk of that money was paid out as direct payment to farmers to support their income, she said.
Yet, as the commission expects farmers to respect environmental regulations the EU had put in place, it automatically counts 20% of direct payments as going towards the climate target.
But as standards were simply the bare minimum, Dupeux said, and no one checked what the farmers use the money for, the percentage didn’t reflect reality.
Dupreux alleged that much of this approach, which she said lacked scientific evidence, stemmed from political pressure.
The commission is often dependent on the approval of the 27 governments in the bloc, so its rules aimed at striking a balance between the different interests.
The national agricultural ministers, in turn, wouldn’t agree on cutting funding from direct farmers and financing pure climate activities instead, she said.
“Politically, they will not survive if they do that. They don’t want to touch the pot of money that is spent for social issues and shift it to climate,” she said.
Full story
see also: EU leaders slash climate budgets by tens of billions to cover coronavirus recovery package
“We must go further. We must strive for more,” she said during her candidate speech at the European Parliament. “I want Europe to become the first climate-neutral continent in the world by 2050.”
She got the job, and has been serving as European Commission president since December.
Under her leadership, the commission — though the initial proposal pre-dates her presidency — suggested spending 25% of the European Union’s seven-year budget and the coronavirus recovery package on “climate targets.”
The EU governments pushed for even more, and committed to spending 30% of the EU’s budget on climate — a 10% jump from the 2014-20 budget. With a total package of 1.8tn euros ($2.1tn), the climate tag comes in at 600bn euros.
But while that might sound good on paper, environmentalists remain sceptical.
“The problem is right now it’s turned into massive greenwashing,” said Berenice Dupeux, senior policy officer for agriculture at the European Environmental Bureau, a network of various environmental groups.
She said most of the spending that the EU counted under its climate umbrella — about 50% — isn’t actually to be spent on the environment: instead, they went to the union’s Common Agriculture Policy, without setting additional climate criteria.
And a large chunk of that money was paid out as direct payment to farmers to support their income, she said.
Yet, as the commission expects farmers to respect environmental regulations the EU had put in place, it automatically counts 20% of direct payments as going towards the climate target.
But as standards were simply the bare minimum, Dupeux said, and no one checked what the farmers use the money for, the percentage didn’t reflect reality.
Dupreux alleged that much of this approach, which she said lacked scientific evidence, stemmed from political pressure.
The commission is often dependent on the approval of the 27 governments in the bloc, so its rules aimed at striking a balance between the different interests.
The national agricultural ministers, in turn, wouldn’t agree on cutting funding from direct farmers and financing pure climate activities instead, she said.
“Politically, they will not survive if they do that. They don’t want to touch the pot of money that is spent for social issues and shift it to climate,” she said.
Full story
see also: EU leaders slash climate budgets by tens of billions to cover coronavirus recovery package
The Independent, 6 August 2020
New homes will not need to be carbon neutral until 2050
Countryside charities said plans to make new homes carbon neutral by as late as 2050 – beyond what scientists say will be a tipping point for climate change – as “pitiful” and dramatically less ambitious than previous ambitions scrapped by ministers.
The government says the framework spelled out in its new planning white paper would “cut red tape” and create a “major boost” for construction firms while delivering more homes.
Under the plans, unveiled by housing secretary Robert Jenrick, land would be categorised as either suitable for development, a “renewal” area, or protected. On the first two categories, building projects could be fast-tracked without going through the current planning permission process if they meet certain standards. [...]
The plans include a pledge to make only new homes carbon neutral by 2050, when the UK’s entire economy is already supposed to be carbon neutral, according to the government’s own Climate Change Act, which is written into law.
A previous Code for Sustainable Homes, introduced by the last government in 2006, would have imposed similar strict climate change and environmental requirements from 2016 onwards, but it was scraped by the government in 2015 before it came into full effect.
Full story
3) Gallup Poll: Most Americans Rank Climate Change As Least Important Issue
Climate Change Dispatch, 7 August 2020
A plurality of Americans considers the coronavirus the most important problem facing the country, while climate change — an issue central to the Democrat Party’s agenda — remains among the lowest in importance, garnering just one percent, a Gallup survey released this week found.
The Gallup poll, taken July 1-23, among U.S. 1,007 adults, asked respondents, “What do you think is the most important problem facing this country today?”
A plurality, or 30 percent, chose “coronavirus/diseases” as the most important problem, followed by “the government/poor leadership” (23 percent), race relations/racism (16 percent), “unifying the country” (six percent), and “crime/violence” (five percent).
Nine percent of respondents chose economic problems, which included the economy “in general,” unemployment, and the wealth gap.
Notably, “climate change/environment/pollution” — green issues central to the progressive agenda and embraced by Joe Biden — came at the very bottom of the list, garnering just one percent support.
Full story
Former Deakin University vice-chancellor Sally Walker will be tasked with investigating whether universities are in alignment with the free speech code devised by former High Court chief justice Robert French.
The review will assess whether there are gaps in their responses to freedom-of-speech issues, and if more action is required to make sure university leaders protect academic freedoms.
Education Minister Dan Tehan commissioned Mr French to create the free speech code for universities and argued a second review was needed to ensure universities were implementing its core principles.
“What this review is about is ensuring that all Australians understand the importance of freedom of speech and academic inquiry — and that our universities understand that,” Mr Tehan said.
“We are seeing challenges to free speech and academic inquiry across the globe. I want, and the government wants, these freedoms to be the pillars of our universities … Robert French did an outstanding job and we want to ensure that code is lived up to by our universities.”
All universities have agreed to implement the French code by the end of the year, but there are concerns in both government and academia that universities are resistant to reform and the exemptions in some universities’ free speech codes are too broad.
The University of NSW apologised this week for caving in to Chinese protests and deleting material critical of the mainland crackdown in Hong Kong.
Two Queensland institutions — the University of Queensland and James Cook University — are also being sued in freedom-of-speech cases by a suspended student and a sacked professor respectively.
UNSW became further embroiled in the free speech controversy on Thursday when it was revealed that the reason for deleting a tweet from the university’s official Twitter account, which vice-chancellor Ian Jacobs later said was unnecessary, was presented differently to Chinese students.
The tweet, which publicised the call from a UNSW adjunct law lecturer for UN action on human rights violations in Hong Kong, was taken down last Saturday after it offended Chinese law students at the university and was attacked in the Chinese government-owned newspaper Global Times.
Professor Jacobs apologised on Wednesday in an email to staff and said the deletion of the tweet was not in line with the university’s freedom-of-speech policy that allows staff and students to express any view that can be legally expressed in Australia.
However, two days earlier the university had sent a letter in Mandarin to Chinese students and alumni saying the tweet was deleted because it was misleading. The letter apologised for the trouble “the incident” had caused.
Elaine Pearson, the lecturer whose views on Hong Kong were referred to in the tweet, and also expressed in a story on the UNSW website, said on Thursday that “it seems the university is saying one thing to international students and one thing to (university) staff”.
“It undermines the sincerity of the apology which went to staff,” said Ms Pearson, who is also the Australian director of Human Rights Watch.
Mr Tehan said he would not prejudge the findings of Professor Walker’s inquiry but he did not rule out making the free speech code mandatory by Christmas.
“Obviously the terms of reference state she can provide advice on that,” he said.
“If there is advice we should make any changes, I will move as quickly as possible to implement that.”
Professor Walker — a highly regarded law academic who led Deakin for eight years and whose husband Brendan Murphy is the federal Health Department secretary who has led the national response to COVID-19 — will hand over her findings to the government in November.
Mr French, now chancellor of the University of Western Australia, was commissioned to develop a voluntary code for university free speech in November 2018 following protests against gender studies critic Bettina Arndt’s campus speaking tour in which she denied there was a rape crisis affecting Australian students.
Since then, 20 universities have implemented the code in some form and 14 are in the process of developing a new free speech policy in line with Mr French’s framework.
In the past two months alone, four major universities have faced serious free speech issues.
Full story ($)
A plurality, or 30 percent, chose “coronavirus/diseases” as the most important problem, followed by “the government/poor leadership” (23 percent), race relations/racism (16 percent), “unifying the country” (six percent), and “crime/violence” (five percent).
Nine percent of respondents chose economic problems, which included the economy “in general,” unemployment, and the wealth gap.
Notably, “climate change/environment/pollution” — green issues central to the progressive agenda and embraced by Joe Biden — came at the very bottom of the list, garnering just one percent support.
Full story
4) Australia’s Universities Face Sweeping Review Of Free Speech Code
The Australian, 6 August 2020
Universities will face a sweeping review into whether they are meeting national standards for freedom of speech in the face of several censorship controversies engulfing higher education.
The Australian, 6 August 2020
Universities will face a sweeping review into whether they are meeting national standards for freedom of speech in the face of several censorship controversies engulfing higher education.
Former Deakin University vice-chancellor Sally Walker will be tasked with investigating whether universities are in alignment with the free speech code devised by former High Court chief justice Robert French.
The review will assess whether there are gaps in their responses to freedom-of-speech issues, and if more action is required to make sure university leaders protect academic freedoms.
Education Minister Dan Tehan commissioned Mr French to create the free speech code for universities and argued a second review was needed to ensure universities were implementing its core principles.
“What this review is about is ensuring that all Australians understand the importance of freedom of speech and academic inquiry — and that our universities understand that,” Mr Tehan said.
“We are seeing challenges to free speech and academic inquiry across the globe. I want, and the government wants, these freedoms to be the pillars of our universities … Robert French did an outstanding job and we want to ensure that code is lived up to by our universities.”
All universities have agreed to implement the French code by the end of the year, but there are concerns in both government and academia that universities are resistant to reform and the exemptions in some universities’ free speech codes are too broad.
The University of NSW apologised this week for caving in to Chinese protests and deleting material critical of the mainland crackdown in Hong Kong.
Two Queensland institutions — the University of Queensland and James Cook University — are also being sued in freedom-of-speech cases by a suspended student and a sacked professor respectively.
UNSW became further embroiled in the free speech controversy on Thursday when it was revealed that the reason for deleting a tweet from the university’s official Twitter account, which vice-chancellor Ian Jacobs later said was unnecessary, was presented differently to Chinese students.
The tweet, which publicised the call from a UNSW adjunct law lecturer for UN action on human rights violations in Hong Kong, was taken down last Saturday after it offended Chinese law students at the university and was attacked in the Chinese government-owned newspaper Global Times.
Professor Jacobs apologised on Wednesday in an email to staff and said the deletion of the tweet was not in line with the university’s freedom-of-speech policy that allows staff and students to express any view that can be legally expressed in Australia.
However, two days earlier the university had sent a letter in Mandarin to Chinese students and alumni saying the tweet was deleted because it was misleading. The letter apologised for the trouble “the incident” had caused.
Elaine Pearson, the lecturer whose views on Hong Kong were referred to in the tweet, and also expressed in a story on the UNSW website, said on Thursday that “it seems the university is saying one thing to international students and one thing to (university) staff”.
“It undermines the sincerity of the apology which went to staff,” said Ms Pearson, who is also the Australian director of Human Rights Watch.
Mr Tehan said he would not prejudge the findings of Professor Walker’s inquiry but he did not rule out making the free speech code mandatory by Christmas.
“Obviously the terms of reference state she can provide advice on that,” he said.
“If there is advice we should make any changes, I will move as quickly as possible to implement that.”
Professor Walker — a highly regarded law academic who led Deakin for eight years and whose husband Brendan Murphy is the federal Health Department secretary who has led the national response to COVID-19 — will hand over her findings to the government in November.
Mr French, now chancellor of the University of Western Australia, was commissioned to develop a voluntary code for university free speech in November 2018 following protests against gender studies critic Bettina Arndt’s campus speaking tour in which she denied there was a rape crisis affecting Australian students.
Since then, 20 universities have implemented the code in some form and 14 are in the process of developing a new free speech policy in line with Mr French’s framework.
In the past two months alone, four major universities have faced serious free speech issues.
Full story ($)
5) China’s Geostrategic Priorities Become Clear: Oil Not Wind…
GWPF Energy, 7 August 2020
Dr John Constable, GWPF Energy Editor
China’s offshore wind installations for 2019 and its plans for the end of the decade are catching headlines. Less well reported, in the United Kingdom at least, is the vastly more significant evidence that China is acting firmly to reduce western influence in the Persian Gulf and thus secure Middle Eastern oil supplies on a scale dwarfing current and probable future wind energy output. China’s offshore wind(ow) dressing should be discounted entirely; Beijing’s engineer bureaucrats know that oil is the key to an energy policy that serves their national interest.
The Global Wind Energy Council (GWEC) has published its Global Offshore Wind Report 2020, and the Guardian has naively reported its main conclusions with enthusiasm: “China poised to power huge growth in global offshore wind energy”.
Installations of offshore wind for 2019 were dominated by Europe and by China, who together account for 6 GW out of a global total of 6.1 GW. China was the largest single installer at 2.4 GW, closely followed by the United Kingdom at 1.8 GW, and then Germany with 1.1 GW.
China now has a total installed capacity of about 6 GW, still behind the United Kingdom’s figure of about 9 GW, but clearly catching up quickly. Indeed, GWEC anticipates that China’s installation rate will continue at between 3 and 6 GW per year throughout the coming decade, delivering an additional 52 GW over that period, and a total approaching 60 GW by 2030.
In European terms that is a very large capacity, roughly equivalent to peak winter load on the UK system for example, but in the Chinese context it is a minor element.
Supposing, very generously, a 50% load factor, that 60 GW of Chinese offshore wind, if it is ever built, would generate some 260 TWh of electrical energy per annum, equivalent to well over 50% of United Kingdom’s total annual electricity generation. China, however, generates over 6,500 TWh of electrical energy per year at present, with about 300 TWh of that, just under 5% currently being obtained from windpower on- and offshore.
Furthermore, Chinese electricity consumption has increased by nearly 1000% on its 1990 level, and is still rising rapidly, as can be seen clearly in the following chart from the International Energy Agency:
GWPF Energy, 7 August 2020
Dr John Constable, GWPF Energy Editor
China’s offshore wind installations for 2019 and its plans for the end of the decade are catching headlines. Less well reported, in the United Kingdom at least, is the vastly more significant evidence that China is acting firmly to reduce western influence in the Persian Gulf and thus secure Middle Eastern oil supplies on a scale dwarfing current and probable future wind energy output. China’s offshore wind(ow) dressing should be discounted entirely; Beijing’s engineer bureaucrats know that oil is the key to an energy policy that serves their national interest.
The Global Wind Energy Council (GWEC) has published its Global Offshore Wind Report 2020, and the Guardian has naively reported its main conclusions with enthusiasm: “China poised to power huge growth in global offshore wind energy”.
Installations of offshore wind for 2019 were dominated by Europe and by China, who together account for 6 GW out of a global total of 6.1 GW. China was the largest single installer at 2.4 GW, closely followed by the United Kingdom at 1.8 GW, and then Germany with 1.1 GW.
China now has a total installed capacity of about 6 GW, still behind the United Kingdom’s figure of about 9 GW, but clearly catching up quickly. Indeed, GWEC anticipates that China’s installation rate will continue at between 3 and 6 GW per year throughout the coming decade, delivering an additional 52 GW over that period, and a total approaching 60 GW by 2030.
In European terms that is a very large capacity, roughly equivalent to peak winter load on the UK system for example, but in the Chinese context it is a minor element.
Supposing, very generously, a 50% load factor, that 60 GW of Chinese offshore wind, if it is ever built, would generate some 260 TWh of electrical energy per annum, equivalent to well over 50% of United Kingdom’s total annual electricity generation. China, however, generates over 6,500 TWh of electrical energy per year at present, with about 300 TWh of that, just under 5% currently being obtained from windpower on- and offshore.
Furthermore, Chinese electricity consumption has increased by nearly 1000% on its 1990 level, and is still rising rapidly, as can be seen clearly in the following chart from the International Energy Agency:
Figure 1: Electricity generation in the People’s Republic of China, 1990-2017. Source: International Energy Agency.
One recent authoritative forecast suggests that China’s electricity demand might top 10,300 TWh in 2030, rising to 12,700 TWh in 2050.
Figure 2: Electricity Demand in China: 2015 (actual) projected to 2050. Source: Michael Meidan, Glimpses of China’s Energy Future (Oxford Institute for Energy Studies: 2019).
The same projection suggests a total of about 1,000 TWh of wind energy onshore and offshore in 2030 wind, comprising about 10% of China’s electricity generation, which is dominated by conventional energy, coal, gas, hydro, and remains so even in 2050.
The Global Wind Energy Council hype collapses into dust as the sunlight of fact falls upon it. Even very rapid growth in Chinese offshore wind capacity, gigantic as it appears in the European mind, will be only slightly better than marking time in the overall context of Chinese growth.
China’s electricity system is and for many years will continue to be firmly ballasted by cheap coal and gas to contain costs and maintain system security. For such a vast and conservatively engineered system 60 GW of offshore wind is an affordable gesture, and emphatically not a high risk, farm-betting, commitment. For other smaller economies and markets the projected growth is very different, and the United Kingdom, for example, is already dangerously over-exposed. China is simply dressing the window.
It is obvious that the government of the People’s Republic has concluded that renewables are not where their country’s interest lies. The engineer bureaucrats of Beijing understand thermodynamics as well as anybody and they are clearly aware that conventional energy is indispensable to their national ambitions and their security, and it is on conventional energy that China’s wolf warrior diplomats are focusing their minds.
In recent weeks it has become known that China has signed an economic co-operation deal with Iran, with China promising $400 billion of infrastructure investment over twenty-five years, presumably in a non-convertible form, in return for privileged access to Iran’s oil: “Pourquoi le mystérieux traité entre l’Iran et la Chine inquiète tant”, FigaroVox, 28 July 2020; “Defying U.S., China and Iran Near Trade and Military Partnership” New York Times 11 July 2020.
The promised Chinese investment amounts to about $16 billion per year on average, which is close to the historic value of Iran’s total annual oil exports of $19 billion per year (OPEC), suggesting that China may become the predominant perhaps even the sole customer of Iranian oil exports.
Iran is heavily dependent on the value of oil exports, which are about 1/4 of all its exports and 4% of total GDP, so for the comparatively trivial sum of $16 billion a year China has acquired a substantial degree of control over the Iranian economy, created an income stream for Chinese state owned construction companies, and also secured Iranian oil exports for its own use.
Iran has proven reserves of about 200 billion barrels, and it exports about 350 million barrels of crude oil and petroleum products per year. That is approximately 550 TWh of exported oil energy per year, available now, and nearly twice the hoped for output of the 60 GW of offshore wind that China may never in fact build by 2030.
As if this were not enough, in the last few days media in the United States have reported that US security services are currently investigating alarming signs that China may have been assisting the Kingdom of Saudi Arabia in the construction of a nuclear processing plant, presumably for something more than mere cash in return (“U.S. Examines Whether Saudi Nuclear Program Could Lead to Bomb Effort”). As the New York Times puts it:
"Saudi Arabia’s work with the Chinese suggests that the Saudis may have now given up on the United States and turned to China instead to begin building the multibillion dollar infrastructure needed to produce nuclear fuel. China has traditionally not insisted on such strict nonproliferation safeguards, and is eager to lock in Saudi oil supplies."
Crown Prince Mohammed bin Salman of Saudi Arabia with President Xi Jinping of China in Beijing in 2019. China is helping the Saudis develop nuclear fuel production ability. Liu Weibing/Xinhua, via Associated Press
The Iran co-operation pact and the Saudi nuclear project are not the actions of a country that believes the future belongs to renewable energy and that fossil fuels are stranded assets. China’s government knows that oil remains of the first importance, and it aims to seize those valuable resources while the West is distracted by the shiny toys of wind and solar and foolishly thinks fossil fuels are history.
It is depressing to note that neither of these remarkable stories has yet had much coverage in Europe, though the Figaro article, cited above, is a notable exception. Both matters should be front page news, an ice-cold shower of reality for day-dreaming Europeans, dozing Brits. Western political discussion has become so neurotically obsessed with the distal and poorly understood threats of climate change, and is so ignorant of the underlying physical realities of wealth and strategic interest that we have all but completely forgotten what a well-designed, pragmatic and rational energy policy looks like. China’s activities in and around the Persian Gulf are a stern and intimidating reminder.
Dr John Constable: GWPF Energy Editor.
6) China And Iran Approach Massive $400 Billion Deal
Ariel Cohen, Forbes, 17 July 2020
China, sensing America’s internal political difficulties amidst social justice protests and a poor COVID-19 response, is taking off the gloves: Beijing is said to be in the final stages of approving a $400 billion economic and security deal with Tehran.
China's Foreign Minister Wang Yi (R) shakes hands with Iran's Foreign Minister Mohammad Javad Zarif ... [+] POOL/AFP VIA GETTY IMAGES
In addition to massive infrastructure investments, the agreement envisions closer cooperation on defense and intelligence sharing, and is rumored to include discounts for Iranian oil. If finalized, the PRC would gain massive influence in this geopolitically critical region, and simultaneously throw a lifeline to the embattled Mullah Regime.
The United States is likely to push back against this partnership, which threatens US security and energy interests in the Middle East and Eurasia. It’s little secret that Washington’s foreign policy interest constantly clash with those of Tehran and Beijing.
In the 20th century the main political rival of the US was the Soviet Union, whose collapse in 1991 ushered in the unipolar world of the late 90’s and early 2000’s. In the 21st century that there is no question of America’s new ‘near’ peer competitor: the People’s Republic of China, a country with a much bigger economic base than the USSR ever had. China’s Belt and Road Initiative (BRI), the flagship of Chinese President Xi Jinping’s global ambitions, is a powerful policy tool that puts US foreign policy influence to the test.
When it comes to geopolitical strategy there’s a saying among foreign policy experts: Russia play chess, China plays Go, and the United States plays football. Iran – with its strong anti-American sentiment, large military, and vast hydrocarbon reserves – is an important piece of China’s global Go board.
The China-Iran deal is the latest step in Beijing’s attempt to expand from a regional hegemony to a world power via BRI. China is often criticized by Western policy analysts for its so-called “Debt Diplomacy” – the policy of indebting an economically weak nation with predatory investment packages. Often times, this manifests itself as leverage for key infrastructure grabs, one of the most famous examples being Sri Lanka’s Hambantota port, which the government was forced to lease to China for 99 years after it failed to repay Chinese loans. Similarly, Pakistan owes China at least $10 billion in debt for the construction of Gwadar Port, and the territory is leased to the Chinese government through 2059. Another country in the region, The Maldives, owes China roughly $1.5 billion in debt which is about 30% of its GDP.
The giant deal with Iran would increase Chinese investments in Iranian banking, telecommunications, and transportation infrastructure including airports, railways and free trade zones (FTZs). China is also eyeing a central role in Iran’s cyber space with the country offering "greater control over what circulates." The prospective agreement also extends a number of potential defense cooperation projects and underscores increased intelligence sharing.
While the arrangement could offer new life to Iran’s sanction-choked economy, there is also the distinct possibility that it could leave the Islamic Republic inescapably beholden to Beijing. Many in the Iranian geopolitically savvy elite understand that.
China Plays The Long Game
Beijing is exploiting Tehran’s growing desperation exacerbated by the COVID health and economic crises. Recent cyber-attacks on its nuclear and naval infrastructure are also pushing to government into the arms of China. After all, the rising superpower offers an insatiable oil market, military and civilian technology, massive investment, and a potential political cover on the global stage, including a veto power in the UN Security Council – all things that Iran is in dire need of.
Both countries see the deal as mutually beneficial, but also as a potential mechanism for confronting US dominance in the Middle East.
Iran is one of world’s the top five natural gas producers and sits atop 15% of OPEC's crude reserves but as of October last year their economy was projected to shrink by some 9.5% due mostly to the reintroduction of US sanctions. Oil output and revenues have plummeted — falling from nearly 4 million bpd in 2018 to just 2 million bpd today. This dire situation preceded the outbreak of COVID 19, which hit Iran particularly hard (and crushed demand for its chief export).
Clearly, the anti-American edge of the deal is what attracts Washington’s attention. It would bolster China’s new digital currency e-RMB as a way to bypass American financial systems, and reduce the power of the dollar. It would also serve to benefit the world’s most voracious energy consumer and provide a mechanism to sell Iranian oil while evading US sanctions policy.
China’s strategic investment together with military cooperation would boost one of the most anti-American powers, threaten American allies in the Middle East from Riyadh to Jerusalem, and provide Chinese companies preferred access to trillions of dollars in untapped hydrocarbons and markets. India, which traditionally maintained good relations with Iran, and recently clashed with China militarily in the Himalayas, is looking wearily at the double encirclement Beijing is executing against it.
Beijing Bites More Than It Can Chew
Yet there is some Iranian concern about a full economic embrace of China. In late-June former President Mahmud Ahmadinejad warned in a speech that policymakers were “handing Iran's purse to other countries without informing the nation." Others have since joined the criticism, including former conservative lawmaker Ali Motahari, who appeared to suggest on Twitter that before signing the pact Iran should raise the fate of Muslims who are reportedly being persecuted in China. And Crown Prince Reza Pahlavi, an exiled opposition leader, join the choir of opponents to the deal.
It is also worth bearing in mind that while China likes to talk a big game about its BRI initiative, there is mounting evidence that Beijing’s goals are too lofty for their own good. As COVID-19 impedes the trend towards globalization, Central Asian countries, a cornerstone of China’s Belt and Road stratagem, are also seeing their economies slow down. The BRI land route has also been criticized for waste and fraud, which is certainly part of a broader pattern.
The US will continue to take action against any Chinese company breaking sanctions, according to a US State Department source. Beyond that, companies which are getting involved in the Sino-Iranian honeymoon will be doing so at their own peril, while high economic and security risks are only mitigated by Beijing’s strategic commitment, focus, and implacability.
One recent authoritative forecast suggests that China’s electricity demand might top 10,300 TWh in 2030, rising to 12,700 TWh in 2050.
Figure 2: Electricity Demand in China: 2015 (actual) projected to 2050. Source: Michael Meidan, Glimpses of China’s Energy Future (Oxford Institute for Energy Studies: 2019).
The same projection suggests a total of about 1,000 TWh of wind energy onshore and offshore in 2030 wind, comprising about 10% of China’s electricity generation, which is dominated by conventional energy, coal, gas, hydro, and remains so even in 2050.
The Global Wind Energy Council hype collapses into dust as the sunlight of fact falls upon it. Even very rapid growth in Chinese offshore wind capacity, gigantic as it appears in the European mind, will be only slightly better than marking time in the overall context of Chinese growth.
China’s electricity system is and for many years will continue to be firmly ballasted by cheap coal and gas to contain costs and maintain system security. For such a vast and conservatively engineered system 60 GW of offshore wind is an affordable gesture, and emphatically not a high risk, farm-betting, commitment. For other smaller economies and markets the projected growth is very different, and the United Kingdom, for example, is already dangerously over-exposed. China is simply dressing the window.
It is obvious that the government of the People’s Republic has concluded that renewables are not where their country’s interest lies. The engineer bureaucrats of Beijing understand thermodynamics as well as anybody and they are clearly aware that conventional energy is indispensable to their national ambitions and their security, and it is on conventional energy that China’s wolf warrior diplomats are focusing their minds.
In recent weeks it has become known that China has signed an economic co-operation deal with Iran, with China promising $400 billion of infrastructure investment over twenty-five years, presumably in a non-convertible form, in return for privileged access to Iran’s oil: “Pourquoi le mystérieux traité entre l’Iran et la Chine inquiète tant”, FigaroVox, 28 July 2020; “Defying U.S., China and Iran Near Trade and Military Partnership” New York Times 11 July 2020.
The promised Chinese investment amounts to about $16 billion per year on average, which is close to the historic value of Iran’s total annual oil exports of $19 billion per year (OPEC), suggesting that China may become the predominant perhaps even the sole customer of Iranian oil exports.
Iran is heavily dependent on the value of oil exports, which are about 1/4 of all its exports and 4% of total GDP, so for the comparatively trivial sum of $16 billion a year China has acquired a substantial degree of control over the Iranian economy, created an income stream for Chinese state owned construction companies, and also secured Iranian oil exports for its own use.
Iran has proven reserves of about 200 billion barrels, and it exports about 350 million barrels of crude oil and petroleum products per year. That is approximately 550 TWh of exported oil energy per year, available now, and nearly twice the hoped for output of the 60 GW of offshore wind that China may never in fact build by 2030.
As if this were not enough, in the last few days media in the United States have reported that US security services are currently investigating alarming signs that China may have been assisting the Kingdom of Saudi Arabia in the construction of a nuclear processing plant, presumably for something more than mere cash in return (“U.S. Examines Whether Saudi Nuclear Program Could Lead to Bomb Effort”). As the New York Times puts it:
"Saudi Arabia’s work with the Chinese suggests that the Saudis may have now given up on the United States and turned to China instead to begin building the multibillion dollar infrastructure needed to produce nuclear fuel. China has traditionally not insisted on such strict nonproliferation safeguards, and is eager to lock in Saudi oil supplies."
Crown Prince Mohammed bin Salman of Saudi Arabia with President Xi Jinping of China in Beijing in 2019. China is helping the Saudis develop nuclear fuel production ability. Liu Weibing/Xinhua, via Associated Press
The Iran co-operation pact and the Saudi nuclear project are not the actions of a country that believes the future belongs to renewable energy and that fossil fuels are stranded assets. China’s government knows that oil remains of the first importance, and it aims to seize those valuable resources while the West is distracted by the shiny toys of wind and solar and foolishly thinks fossil fuels are history.
It is depressing to note that neither of these remarkable stories has yet had much coverage in Europe, though the Figaro article, cited above, is a notable exception. Both matters should be front page news, an ice-cold shower of reality for day-dreaming Europeans, dozing Brits. Western political discussion has become so neurotically obsessed with the distal and poorly understood threats of climate change, and is so ignorant of the underlying physical realities of wealth and strategic interest that we have all but completely forgotten what a well-designed, pragmatic and rational energy policy looks like. China’s activities in and around the Persian Gulf are a stern and intimidating reminder.
Dr John Constable: GWPF Energy Editor.
6) China And Iran Approach Massive $400 Billion Deal
Ariel Cohen, Forbes, 17 July 2020
China, sensing America’s internal political difficulties amidst social justice protests and a poor COVID-19 response, is taking off the gloves: Beijing is said to be in the final stages of approving a $400 billion economic and security deal with Tehran.
China's Foreign Minister Wang Yi (R) shakes hands with Iran's Foreign Minister Mohammad Javad Zarif ... [+] POOL/AFP VIA GETTY IMAGES
In addition to massive infrastructure investments, the agreement envisions closer cooperation on defense and intelligence sharing, and is rumored to include discounts for Iranian oil. If finalized, the PRC would gain massive influence in this geopolitically critical region, and simultaneously throw a lifeline to the embattled Mullah Regime.
The United States is likely to push back against this partnership, which threatens US security and energy interests in the Middle East and Eurasia. It’s little secret that Washington’s foreign policy interest constantly clash with those of Tehran and Beijing.
In the 20th century the main political rival of the US was the Soviet Union, whose collapse in 1991 ushered in the unipolar world of the late 90’s and early 2000’s. In the 21st century that there is no question of America’s new ‘near’ peer competitor: the People’s Republic of China, a country with a much bigger economic base than the USSR ever had. China’s Belt and Road Initiative (BRI), the flagship of Chinese President Xi Jinping’s global ambitions, is a powerful policy tool that puts US foreign policy influence to the test.
When it comes to geopolitical strategy there’s a saying among foreign policy experts: Russia play chess, China plays Go, and the United States plays football. Iran – with its strong anti-American sentiment, large military, and vast hydrocarbon reserves – is an important piece of China’s global Go board.
The China-Iran deal is the latest step in Beijing’s attempt to expand from a regional hegemony to a world power via BRI. China is often criticized by Western policy analysts for its so-called “Debt Diplomacy” – the policy of indebting an economically weak nation with predatory investment packages. Often times, this manifests itself as leverage for key infrastructure grabs, one of the most famous examples being Sri Lanka’s Hambantota port, which the government was forced to lease to China for 99 years after it failed to repay Chinese loans. Similarly, Pakistan owes China at least $10 billion in debt for the construction of Gwadar Port, and the territory is leased to the Chinese government through 2059. Another country in the region, The Maldives, owes China roughly $1.5 billion in debt which is about 30% of its GDP.
The giant deal with Iran would increase Chinese investments in Iranian banking, telecommunications, and transportation infrastructure including airports, railways and free trade zones (FTZs). China is also eyeing a central role in Iran’s cyber space with the country offering "greater control over what circulates." The prospective agreement also extends a number of potential defense cooperation projects and underscores increased intelligence sharing.
While the arrangement could offer new life to Iran’s sanction-choked economy, there is also the distinct possibility that it could leave the Islamic Republic inescapably beholden to Beijing. Many in the Iranian geopolitically savvy elite understand that.
China Plays The Long Game
Beijing is exploiting Tehran’s growing desperation exacerbated by the COVID health and economic crises. Recent cyber-attacks on its nuclear and naval infrastructure are also pushing to government into the arms of China. After all, the rising superpower offers an insatiable oil market, military and civilian technology, massive investment, and a potential political cover on the global stage, including a veto power in the UN Security Council – all things that Iran is in dire need of.
Both countries see the deal as mutually beneficial, but also as a potential mechanism for confronting US dominance in the Middle East.
Iran is one of world’s the top five natural gas producers and sits atop 15% of OPEC's crude reserves but as of October last year their economy was projected to shrink by some 9.5% due mostly to the reintroduction of US sanctions. Oil output and revenues have plummeted — falling from nearly 4 million bpd in 2018 to just 2 million bpd today. This dire situation preceded the outbreak of COVID 19, which hit Iran particularly hard (and crushed demand for its chief export).
Clearly, the anti-American edge of the deal is what attracts Washington’s attention. It would bolster China’s new digital currency e-RMB as a way to bypass American financial systems, and reduce the power of the dollar. It would also serve to benefit the world’s most voracious energy consumer and provide a mechanism to sell Iranian oil while evading US sanctions policy.
China’s strategic investment together with military cooperation would boost one of the most anti-American powers, threaten American allies in the Middle East from Riyadh to Jerusalem, and provide Chinese companies preferred access to trillions of dollars in untapped hydrocarbons and markets. India, which traditionally maintained good relations with Iran, and recently clashed with China militarily in the Himalayas, is looking wearily at the double encirclement Beijing is executing against it.
Beijing Bites More Than It Can Chew
Yet there is some Iranian concern about a full economic embrace of China. In late-June former President Mahmud Ahmadinejad warned in a speech that policymakers were “handing Iran's purse to other countries without informing the nation." Others have since joined the criticism, including former conservative lawmaker Ali Motahari, who appeared to suggest on Twitter that before signing the pact Iran should raise the fate of Muslims who are reportedly being persecuted in China. And Crown Prince Reza Pahlavi, an exiled opposition leader, join the choir of opponents to the deal.
It is also worth bearing in mind that while China likes to talk a big game about its BRI initiative, there is mounting evidence that Beijing’s goals are too lofty for their own good. As COVID-19 impedes the trend towards globalization, Central Asian countries, a cornerstone of China’s Belt and Road stratagem, are also seeing their economies slow down. The BRI land route has also been criticized for waste and fraud, which is certainly part of a broader pattern.
The US will continue to take action against any Chinese company breaking sanctions, according to a US State Department source. Beyond that, companies which are getting involved in the Sino-Iranian honeymoon will be doing so at their own peril, while high economic and security risks are only mitigated by Beijing’s strategic commitment, focus, and implacability.
The London-based Global Warming Policy Forum is a world leading think tank on global warming policy issues. The GWPF newsletter is prepared by Director Dr Benny Peiser - for more information, please visit the website at www.thegwpf.com.
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