If you need to kill two birds, the timeless wisdom is, better to do it with one stone.
A great new way to do it may have just made an appearance – a way to address two very different, but nevertheless extremely important, problems facing the West.
Problem number one: how to deal with climate change
Problem number two: how to counter China's increasing economic assertiveness on the world stage.
While most people haven't generally thought about these two issues at the same time, it now makes sense to do so. That's because by addressing the two issues together, there may be a great way to "kill two birds with one stone". Let's consider how.
Begin with problem number one – how to deal with climate change. Lots of efforts are underway to reduce the risks of putting more carbon in the atmosphere. The problem is that attention isn't adequately focused on where the real problem is. The good news: to the credit of the people and government in California, huge efforts are being made to reduce the carbon footprint, and even become "carbon neutral" in a few decades; and even though there has been considerable growth in the state over the past 10 to 15 years, the carbon footprint has been reduced by 13%, a real accomplishment! The bad news is that California emits only about 1% of the world's total carbon, so no matter how effective the Golden State is, it really isn't making much of a difference with the worldwide problem. Unfortunately, and sadly, for all of the "patting on the back" that Californians are doing, what they're doing to stop worldwide climate change is, frankly, largely meaningless on a global scale.
The same is true in the rest of the USA, as well as in other parts of the West. That's because, unfortunately, while the USA and the European Union are making big reductions in their carbon emissions, those reductions are being offset by increases in places like Asia and Africa. Net result? Virtually no worldwide reduction. If we hope to solve the problem and reduce worldwide emissions, we need to do more than reduce emissions in the West. Instead, we need to have a real impact in reducing carbon in Asia and Africa.
Which brings me to problem number two. China has not only expanded its own economy dramatically over the past 25 years, it is now projecting its economic power outside the country. The best example of this is what is called the "One Belt, One Road" initiative, also referred to as the "Belt and Road Initiative" (BRI for short). Started in 2013, BRI is a multi-year project to invest $ 4.0 trillion US dollars worth of investments in 65 countries, representing 70% of the world's population, 55% of world GDP, and 75% of energy reserves.
China is quite serious.
The rest of the world is beginning to take notice, including the USA. In fact, a bill has been introduced in Congress, with support from the Trump Administration, to create a new body with authority to do $ 60 billion in development financing. That's only a small fraction of what China is doing, but it's a good start. "People are waking up to what China is doing and see that we have to counter that," US Representative Ted Yoho, a Republican from Florida, recently told the Wall Street Journal. The proposed new agency could help fund infrastructure projects, providing at least some counterweight to what China is trying to do.
This new agency could "kill two birds with one stone" by focusing on financing infrastructure projects that simultaneously promote economic development AND reduce carbon emissions. Developing economies in Asia and Africa need large investments in power generation, for example. Why not use such an agency to encourage the development of new sources of clean power, as well as help with the conversion/removal of existing plants that generate large amounts of carbon emissions? The economics of low or no carbon emission projects become more compelling by the day. Why not use such an agency to promote this, especially since it's pretty clear that to meet carbon emission reduction goals, old "dirty" power capacity need to be taken out of commission more quickly.
Besides direct investment, such an agency could provide incentives for other financial institutions to invest in such projects. The financing demands are huge, so such help would likely be very beneficial.
Creating a Western counterweight to China's Belt and Road Initiative, one focused on investments to prevent climate change, could fill the gap in the Paris Climate Accord. The "gap" isn't the pullout of the USA (though we shouldn't have pulled out). Instead, the real "gap" is that it doesn't provide a good way to address the problem of growing emissions in Africa and Asia.
The USA isn't the only country that wants to counter the increasing economic weight of China. Canada, the European Union, Japan, Australia, and other countries want to do the same. There's no reason they couldn't join the USA in such an effort. Like the USA, those countries want both to counter China's increasing clout, as well as reduce the impact of carbon emissions.
China's BRI focuses on transportation infrastructure such as roads, railroads, and ports. But while projects such as Hambantota, a port that China built for Sri Lanka, then re-possessed by China when Sri Lanka defaulted on its loan obligations, gets most of the attention, there's also a big energy component to BRI. This energy component should really raise concerns because China appears to be focusing on coal and hydropower. As an example, it's building a lot of coal-fired power plants in Pakistan.
Unquestionably, lots of developing countries want and need such infrastructure investments. Unfortunately, if the USA and other Western countries try to counter BRI with alternative transportation infrastructure projects, we'll probably just end up in a bidding war. Instead, if we focus our investment on clean energy, we'll get the following benefits: 1) the promotion of clean energy; and 2) an attractive alternative to what the Chinese are doing.
Why do I say that energy projects will be more impactful? It's because these countries need power in order to build their economies, likely more than they need other forms of infrastructure. We can help them get this infrastructure, and make certain that it is clean energy. Clean energy is already highly competitive in an economic sense. It just happens to have hugely important added benefit of being much better for the environment.
In particular, the USA should focus attention on power plants in India and Pakistan. As part of BRI, China is in the process of helping these countries meet their voracious appetites for new power by building coal and hydropower facilities. If these new coal plants are built, it will work against all of the efforts of California, and other places, to reduce the carbon footprint. Not only that, but the more the Chinese help built the economies of India and Pakistan, the less influence the West will have in these places in the future.
As a result, we could offer India and Pakistan (and other countries, for that matter) two starkly different options: dirty coal power from China or clean power financed by the West. Given such a choice, which do you think public opinion on those places will support? I'm confident that people in these countries like clean air just as much as you do. Not only that, they are now just as aware of the risks of climate change as you are, maybe even more. Moreover, given that people in much of Asia and Africa are already suspicious of the Chinese, I think the answer is fairly clear which alternative they'd choose, if just given the chance.
Is this a panacea? Absolutely not! Will it be an effective counterweight to China? If well thought out and properly executed, probably yes.
By focusing on energy infrastructure investment, the USA and its partners can address real needs in these developing countries. At the same time, by focusing investment on clean energy, they can accomplish a large part of the goal of either eliminating existing "dirty" capacity or adding "clean" capacity.
If the West focuses its "BRI response" on clean energy, it will provide these countries in Africa and Asia with an attractive alternative to China's offer. Of course, the Chinese may respond by offering clean energy alternatives, too. While it doesn't do anything about China's "hidden political agenda for BRI", at least it will stop the proliferation of coal fired plants.
Killing the two "birds" of "removing carbon" and "countering China" with the one stone of "a USA/Western alternative to China's Belt and Road Inititative" could make great sense. Of course, we'll never know the answer unless we move from talk to action. No time like now!
