How China Aims To Beat the U.S., Europe at ‘Net Zero’ Carbon - David Zaikin

I write about global business and
investing in emerging markets.

China’s government wrapped up the
annual “Two Sessions” political meetings in Beijing on Thursday and – taking a cue
from the U.S. and Europe – climate change was top of mind.

What does it mean? It means China
is gearing up to invest in clean power technologies (think EV batteries and
solar panels) and will add more zero-carbon, zero-emissions energy to its grid.
Nuclear stood front and center during Premier Li Keqiang’s 2021 Government Work
Report delivered at the start of the week long meeting.

“We are going to increase nuclear
and make sure it is safe,” he said.

Li’s boss, Xi Jinping, had paved
the way for this in September when he said that the world’s worst polluter
(though India may have them beat on any given day) is going “zero carbon” by
2060 in its energy grid.

Perhaps we will know a bit more
about the new nuclear plans, and how many coal plants it plants to knock out
(they’ve been ramping up coal for the last several months), once the 14th Five
Year Plan is chewed over by the Chinese language press and it gets translated.
But for now, China’s government just ended its Two Sessions meeting with a nod
to Xi’s vision of an “ecological civilization” in China.

According to Li, Beijing will
“draw up an action plan to bring carbon emissions to a peak by 2030,”  adding that China would “improve its
industrial structure and energy mix” while also pushing to develop new energy
sources and nuclear power.

Bloomberg reported that China
intends to build more coastal nuclear power plants (no firm number given) and
is shooting for 20 new gigawatts of nuclear power in four years, up from about
50 gigawatts today.

As the U.S. and Europe are not
budging on new nuclear power, China is saying “we’ll lead on this and be net
zero before you.”

“China can make changes much
faster. If they say 35% of their energy matrix will come from coal…most likely
it will happen. If they say it’s going to be replaced by nukes…it will happen,”
says David
Zaikin, head of Key Elements Group in London. Zaikin advises companies
on mining and energy sector investments. “China will become clean energy
efficient must faster because the decision-making process in the U.S. or Europe
takes too long by comparison. The political and regulatory process (for
nuclear) is time consuming and expensive.”

The Two Sessions ended on
Thursday with the ratification of China’s 14th Five-Year Plan, a plan that will
give the country its policy directives through 2025.

China is reading the Western world’s tea leaves,
too. It knows that one way the West is gunning for them is to blame them for
all their C02 emissions. Canada is talking about a carbon tax, for instance,
though Justin Trudeau has not specifically singled China out. It goes without
saying that if you’re serious about taxing polluters, China is one of the worst
(emerging markets Pakistan, India and Indonesia are worse, in that order).