333 : Inside COP: China, India… and the Text on the Table

Professor Wang Yi: [00:20:32] Maybe south north south cooperation. So I think we should, you know, use a different cooperation approach. Maybe we see it's a cooperative leadership not only to take the lead alone, but in some areas, maybe China can, uh, steer the direction, especially renewable development and also green transitions. I think, you know, China now is not only the development of renewable. It's like a system transition. We call it as a overall green transition, socio economic development. That means not only the renewable, but also we change our development pattern from past fossil fuel based, coal based and go to renewable based I think is the direction in this direction. Maybe China can in some degree it can steer because, you know, for the energy transition, the center is established, new power system and renewable plays a major role. That means not only the supply side like build mode, solar PV and wind turbine, but also in the transmission side. We should reform our grid system. In the past, we have a centralized grid system. Now in the future must be centralized plus decentralized.

Christian Figueres: [00:21:55] Taking that steering role, as you so aptly call it, professor, that steering role of China. Um, just one step farther. It seems to me that China is seeking to steer, with its clean tech economy to transform, as you say, systemically. Certainly, China's industrial strategy. Now, is that true for the domestic growth in China as well as for export strategy? And if so, which markets are the most interesting for China?

Professor Wang Yi: [00:22:34] Yeah, first of all, I think China now we adopted a new development concept or we called as a high quality development. So it's not only the green development but also the others like digital economy. And we call the innovation and the cognitive green and the opening up and also the co-sharing. I think it's it's a package. The green is one of them. So that we want to green the whole the manufacturing industry. So that's why we choose the our traditional way dependently. And we want to, you know, first one to do our best and then we can contribute to the cost reduce for the green green product. And like other developing countries who have a more affordable, renewable and for cooking, not only for the high quality development but just for cooking. So I think China would like to to contribute, even for other developed countries like the U.S., in they can help other countries to reduce the transition costs. It's not only the technology transition, it's a system transition cost. Yes I think yeah. So I think China would like to do. But now we have a new the trade barriers from other countries. So maybe we'll slow down the global transition and also increase the transition cost. So that's that's a very terrible situation. But but we should discuss with other countries which one which you know securities could be accessed by other countries. Yeah. Because maybe uh, maybe some, some, you know, No security issues and also some geopolitical geoeconomic, you know, tensions. We should think we should talk. We should, you know, understand each other and respect our, you know.

Christian Figueres: [00:24:29] Our concerns that that is the purpose of cops. Exactly. Yeah.

Professor Wang Yi: [00:24:33] Yeah. So we would like to establish this kind of just and inclusive trade system with other countries.

Christian Figueres: [00:24:41] Professor, thank you so much.

Fiona McRaith: [00:24:53] What did you take from that interview?

Paul Dickinson: [00:24:55] Well.

Paul Dickinson: [00:24:56] I mean, it was it was, um, interesting, the setup, you know, the US, when he said the US has left Paris for a second time, China will still do our volunteer efforts. Very measured language, you know, still China commitment to peaking emissions before For 2030. And then he spoke about rules. Rule based Paris implementation. You know, development company countries should take the lead. So, um, that's that's a that's a big kind of gauntlet being thrown down. Um, but in some areas you said maybe China can steer. Now, I think that's the, the sounds to me like the kind of the government voice that sits above what we all recognize as the monumental, um, industrial policy of China that has made, um, solar energy practically free, has, you know, ramped up to an unprecedented scale, electric vehicle production, you know, battery production. So many of us, me especially, you know, I'm always talking about the industrial power of China. And here that comes out as in some areas maybe China can steer. So I guess somebody, you know, aligned to the Chinese government at this inter-governmental event is going to use measured language. But I felt it was it was interesting to, to to have this kind of quiet but confident voice referencing China's emerging role in some areas. Maybe China can steer. What do you think?

Fiona McRaith: [00:26:37] There's been a lot of talk, including on the podcast, about the way the US has been inconsistent at the national level on climate. You know, joining, not joining. Et cetera. Et cetera. Lack of leadership. And Newsom in that episode, in his conversation with Christiana, made the point that that's not the case at the subnational level. And there's also been a lot of thus very naturally, conversation about China's leadership on this, especially because there's such a technical powerhouse, industrial powerhouse there, Belt and Road initiative, and their private sector is investing hugely all over the world in the global majority, i.e. Global South. And it was just incredibly interesting, as you say, to hear him extrapolate some of the signals that some of his remarks might have sent, about what that might look like, and how different it is likely to look from what the US's leadership on the world stage has been. Maybe will be again.

Paul Dickinson: [00:27:38] So don't hold your breath.

Fiona McRaith: [00:27:40] I don't know. I found it really interesting and what a wonderful opportunity to have him on the podcast. Um, we also today had a chance to sit down with Doctor Arunabha Ghosh, who's the founder and CEO of the Council on Energy, Environment and Water, which works across India and beyond to promote the energy transition. He's also special envoy for Cop 30, representing South Asia. I wanted to start. Fossil fuels have been a huge topic at this cop. Transitioning away from phasing out. I know you shared a ten point agenda for a fair and planned transition. Can you walk us and our listeners through some of those ten points, or the key ones in your mind?

Dr Arunabha Ghosh: [00:28:25] Well, first of all, we should all recognize that two years ago, we made a major breakthrough at the Dubai Cop, which was that for the first time, countries agreed that we had to transition away from fossil fuels as part of the overall transition. It was, along with a tripling of renewables and a doubling of energy efficiency that was committed to. Now, this year, President Lula mentioned that we need road maps for transition away from our dependence on fossil fuels. Now, I've emphasized these two words road maps and dependence, because this matters. The fossil fuel story is not just a binary between a dirty molecule and a clean electron. It is actually a lot more. When we think about roadmaps. It means that there are countries that will find their different routes out of the fossil fuel age and into the clean energy age. Some of those countries might be fossil fuel exporters, some might be importers, some might be developing countries, some might be developed countries. So you kind of get a mix of different permutations of what those roadmaps could look like. But also this importance of the transition away from dependence. When we say dependence, it's not just the energy source. For many countries, it's a major source of public finance. For many, it's a major source of jobs. So when we think about that transition, we've got to look at the energy part, the social part, the political part, the fiscal part.

Dr Arunabha Ghosh: [00:29:50] And therefore I laid out a ten point approach. It's not a plan. I think a plan should be co-created, as I said myself in that speech. But the ten point approach broadly looks at what do we need to do to stick more renewables into our system. And that's not just building the renewables capacity. It's actually building out our grids. It's making sure our grids are interconnected. So if you're producing wind and I'm producing solar and someone else producing hydro, we can optimize even more. How do we manage a very different grid? How do we design power markets of the future that allows for a lot more decentralized and distributed energy generation from clean sources. So that's one component. And then there's another component that this is not just about the energy transition. This is an industrial and an economic transformation. So how do we diversify our supply chains. How do we refine critical minerals in our home countries. So that's an agenda that many other developing countries are bringing to the table. And then finally there's the social dimension. As I said, you know, you can repurpose the physical fossil fuel asset. You can re-engineer the stranded financial asset. What happens to the people asset. You can't just write them a voluntary retirement cheque.

Paul Dickinson: [00:30:59] I think we should really come on and talk about this energy transition And but I just also want to pick up now on the tough one that a lot of people talk about, which is coal. You know, it's a dependence. How quickly do you think we can get past, you know, a kind of peak of coal use, for example, in India? Is it in sight in the next 5 to 10 years, or is it happening?

Dr Arunabha Ghosh: [00:31:20] Well, first of all, it's important to understand the counterfactual. When I wrote my first paper on energy, I don't know, 15 or 16 years ago. At that time, our scenarios looked like we might have well over upwards of 400, maybe 500GW of coal by 2030. And then India kicked off its solar mission, which has now become the world's third largest solar market in the world. What does that mean? We basically avoided about 300 or 400GW of coal from being built altogether in India alone. So this counterfactual is extremely important. Every new electron is more likely to be a clean electron today than dirty. So for a lot of developing countries, not just for India, the issue is not between coal versus renewables. It's between injecting more and more renewables into the system, or rather non-fossil, which includes nuclear as well, dramatically reducing inefficient coal. I think that within the next decade, you can certainly see a major peaking of coal, at least in electricity generation, and then a dip for coal for heavy industries. That's why you need a different approach. India now has the world's largest green hydrogen mission.

Dr Arunabha Ghosh: [00:32:37] We've got tens of billions of dollars that have been put towards it from public finance alone, let alone the expectation of private investment, because that will be needed for the heavy industrialisation, decarbonisation and also displacing coal in those sectors. If we actually built out the 500GW of clean energy capacity that we expect to by 2030. We've already hit over 250GW. We will need very little additional coal to balance the grid. But actually, if we push even harder and went to 600 gigs, we could eliminate any new need for coal. Of course, with a huge surge in batteries and grid balancing, we expect our grid balancing needs to go up five x over the next five years alone. This is, of course, driven by a huge amount of power demand that's coming from cooling requirements, but also overall economic growth. So how do you grow the world's fastest growing major economy, while making sure pretty much every new electron that is coming into the system is a cleaner electron? That's what is a transition. It's never a binary.

Fiona McRaith: [00:33:50] Um, the presidency has framed this as the implementation Cop. And I wonder if you both in your role as CEO, but also a special envoy could help us understand or could dive in and explain a little bit what would implementation ready packages look like for emerging economies, including, but not limited to, India coming out of this cop?

Dr Arunabha Ghosh: [00:34:11] No. In fact, let's talk about other countries. If you think about the energy transition itself, you've got Vietnam today in Southeast Asia that is, uh, deployed more renewables than any other country in that region. It's not the largest economy in that region, but it's got a huge amount of renewables. Now, what what does it need? It needs more investment in the grid so that where you're generating renewables capacity, power and where the sources of demand are, are connected. If you look at sub-Saharan Africa, there's a huge surge in distributed energy. If you look next door here in South America to Uruguay, you've got nearly all power generation coming from clean sources. What I'm trying to say is that in emerging markets and developing countries, you already see the leapfrog. In fact, in that speech that I gave, I said, it's not a leapfrog, it's not a triple jump, it's a pentathlon. Because countries are going through five energy transitions, getting electricity into homes for the first time ever, dealing with a shift in the nature of the power demand, where there's a huge surge of people moving from rural to urban areas. So the pattern of energy demand shifts, making sure that that energy is cleaner. This is a simultaneous story that is playing out.

Dr Arunabha Ghosh: [00:35:23] So what is therefore an implementation ready package? It is of course about technology. It is about finance, but it is also about investment. We've got to convert the finance into investment. If there are no changes in the structural way in which risks in developing countries are assessed, I can have the best plans in the world to go to the moon and still I will not get investment. So how do we make sure that macro risks are de-risked through concessional finance? How do we make sure that technology is not transferred because it is actually never transferred, but co-developed. How do we make sure that the use cases for this clean energy is designed for the local circumstances? This is why the nationally determined contributions are meant to be bottom up, because countries have to design their own pathways not just to a transition, but an economic transformation. So if we can nail down those conversations at a cop and even more so outside of a cop, then we will see that there is there will be a degree of trust reinjected in a system that is honestly not recognised, the scale of transformation that's occurring in developing countries.

Paul Dickinson: [00:36:34] There's been, um, how can I put it? Essentially, I suppose what I'm driving at is the traditional has it competition, perhaps, between the great nation of India and China in terms of different aspects of development and even climate change policy. Now there is a history, for example, of the US and China collaborating. Do you see increasing opportunities for there to be synergy and agreement in ways of conceiving and delivering objectives between India and China?

Dr Arunabha Ghosh: [00:37:01] Well, I think that collaboration has been occurring. Um, India's clean energy story has in part been driven by the reduction in solar prices in which has been a consequence of huge buildout of solar manufacturing capacity in China. It's not the only reason India has done a lot to reduce the cost of finance, to make investments more credible by bringing in institutional reforms, etc., but there are Chinese panels deployed all over India in negotiations. China and India have often been, you know, in coalitions together. But I think we have to to again start thinking about it in a, in a different way, which is that we don't have an energy security architecture for the fuels of the future, whether it's a solar panel, a wind turbine, a. An electrolyser for hydrogen, a battery, a critical mineral. And why is that needed? Today, India has over 120GW of solar. Our big.

Paul Dickinson: [00:38:07] Number.

Dr Arunabha Ghosh: [00:38:07] It's a big number already. Our analysis at CDW suggests we will need 5000GW of solar for net zero, along with another 2000GW of wind, etc.. Now, today, we have about 92% dependence on imported solar panels. No government anywhere in the world will be comfortable with building out an energy system of 5000GW, with 92% dependence on 1 or 2 countries. So I think the story here is not about competition. It's about collaborating to intentionally design more diversified supply chains in clean energy, where China also has a big market to play in, so does India, so does Kenya, so does Brazil, as do the United States or European Union or Australia with its minerals. If we try to build an energy system of the future by making each of our economies vertically integrated firms, we will have a very suboptimal and very slow progress towards the goals we all want to collectively achieve. So I think it's not an India China competition. All major economies need to put their heads together and think about green, comparative, advantage driven manufacturing and value chains that are interdependent. If we'd started doing that, we would have a lot more confidence in building out even more clean energy capacity faster.

Paul Dickinson: [00:39:33] Arnab, thank you so much for joining us on inside. We really appreciate it.

Dr Arunabha Ghosh: [00:39:37] Thank you.

Fiona McRaith: [00:39:37] Thank you, Doctor Ghosh. What did you make of our conversation with Doctor Ghosh?

Paul Dickinson: [00:39:48] Yeah, fascinating. Talking about the amazing features of India's success with renewable energy, which is non-trivial, I have a colleague I work with in Indian company, and he's like boasting quite correctly, about 120GW of solar and the speed of that growth. And, you know, the kind of scale of the ambition, it's kind of mind blowing, frankly. And in terms of what is collaboration between India and China? Well, most of that solar was manufactured in China, bought by India. So that's sort of a reality of a kind of commercial partnership of sorts in the wider conversation outside of the recording. Really interesting to dig in a little bit about the nature of grids and the secret behind what happened in India is that 20 years ago, they broke up the big monolithic utility, they generation. Let's separate that up from the central grid, from the kind of consumer distribution. And that's liberated the whole thing there. I'm sure there are lessons for so many countries about how these grids that have been asleep under the government for 100 years have now got to kind of wake up. And, you know, the speed of your transition as a nation is is predicated on the speed of your ability to deal with the grid. So I found that incredibly exciting. And then, yeah, they're massively fueling their development with renewables. I'm going to ask a question. Are they more responsible because they are the world's most populous nations? Can they see is there something about like a billion person nation that just thinks about human survival better than a 5 million person nation? I don't know, but I although I know that there's still crazy amounts of coal in China, I have confidence in different ways. These two biggest nations on earth will become leaders for you. You're. I haven't got that sense. I haven't convinced, you.

Fiona McRaith: [00:41:33] Know, I just think that's a really big question. And I was thinking about your framing will become leaders. I really think of them already as yeah, you're right. And I think one of the things that continue to strike me through both interviews is the fact that these are nations where the signals and the momentum are already driving the future. They are already leading in the green tech revolution, in decarbonizing grids, in like the the way in which both private and public in these countries are making that reality come together is, I think, incredibly important and a very important reflection to have. As we look around the cop at all of the hustle and bustle, the fact that the negotiations are what's happening these two weeks, and they're really important for signal setting. And there are examples in the real world that go way beyond the text. And I think that really came to life for me from both of these conversations.

Paul Dickinson: [00:42:35] Yeah. In the holes the governments discussed, the way they can come together around the world on these issues. But in a sense, India and China are almost planets in their own right. You know, I feel kind of humbled by the enormity of of the states that we've we've had the privilege to talk to today.

Fiona McRaith: [00:42:55] You know, just one thought that I had as I bumped into an old colleague from my time at the World Resources Institute, who's been supporting negotiations for a really long time, is we were chatting about this question mark of whether or not the cop will end on time. They sometimes, often, frequently do not. But also the presidency, because Lula's coming tomorrow and the Unsg are coming tomorrow is really aiming to do this. Something that had slightly, surprisingly, not been acutely on my radar is the fact that the G20 is this weekend in Johannesburg in South Africa. So not only, you know, are they hoping to close it? Lula will be flying to South Africa to join that as a major economy in the G20. So of course they're trying to close it early. They really want this moment with Lula, who was the first one, as Jennifer said, to lay out this beyond fossil fuel roadmap, who has been at the heart of the Brazilian presidency and this cop. So, you know, I don't know. We will know a lot more next time we're recording. But that, to me, is just something I'm absolutely going to be looking forward to talking about tomorrow.

Paul Dickinson: [00:43:59] Lula's kind of larger than life character. Maybe Brazil's becoming a bigger and bigger actor on the world stage and this kind of, uh, international diplomacy with the cop in Berlin, with the G20. It's exciting to see that Brazilian leadership and maybe the world starting to hear new voices, taking us new places.

Fiona McRaith: [00:44:17] And hopefully whatever's agreed here, the mouchiroud, the cover text can be carried into the G20 to really help solidify it in a different but extremely complementary arena.

Paul Dickinson: [00:44:28] There is nothing we hope for more. Thanks.

Fiona McRaith: [00:44:30] See you tomorrow.

Paul Dickinson: [00:44:31] Bye bye.