Biden and Xi Break the Ice
The leaders of the world’s 20 biggest economies are meeting this week in Indonesia.
What they decide will go a long way toward shaping the global climate of the near future — and with it, the destiny of us all. The Group of 20 represents 80 percent of the greenhouse gas emissions warming the planet.
The main headline: China and the U.S. are back on speaking terms.
The White House announced that the United States and China would resume their climate talks. The news came after a three-and-a-half hour meeting between President Biden and his Chinese counterpart, Xi Jinping.
It was their first in-real-life meeting in more than five years. They had a lot to talk about, most of it unpleasant, like their polar positions on Taiwan. The resumption of climate talks was arguably the most concrete thing to come out of the session.
Two reasons that’s critical.
The United States is history’s largest emitter of greenhouse gases. China is today’s largest.
Their two-way talks were frozen by Beijing this year after Speaker Nancy Pelosi visited Taiwan. Given that the overall relationship between Washington and Beijing is so prickly right now, an open channel, focused on climate, is important for two reasons. It could go a long way toward reducing distrust. It could also give both sides a chance to learn what the other is doing to rein in emissions at home and what they’re doing to persuade other countries to do the same.
“The global community is breathing a sigh of relief,” Ani Dasgupta, president of the World Resources Institute, said in a statement from United Nations-led climate talks, which are now in their second week in Sharm el Sheikh, Egypt. “There is simply no time left for geopolitical fault lines to tear the United States and China away from the climate negotiation table.”
There was also promising news about Indonesia.
Biden told reporters on Monday that the United States had no interest in a conflict but rather sought to “compete vigorously” with China.
Indonesia offered an opportunity.
The country has been forging ever-closer ties to China. It also needs money to shutter its coal-fired power plants. Enter the United States. After months of negotiations, American officials on Tuesday announced a $20 billion package to help Indonesia transition away from coal and into renewables for its domestic electricity supply. Japan, Canada and some other rich countries are part of the deal.
Half of the money is expected to come from a coalition of banks that had agreed last year to work together to shift their balance sheets away from fossil fuels, but have nonetheless invested heavily in oil and gas as energy prices have soared. (My colleague Manuela Andreoni wrote about that coalition, known as the Glasgow Financial Alliance for Net Zero, last Friday in this newsletter.)
Some terms of the deal, such as whether the interest rates will favor Indonesia or the banks or both, aren’t fully clear. The package is modeled after a similar deal for South Africa, announced last year. To understand how challenging it is for South Africa to get off coal, read this story from my colleagues Lynsey Chutel and John Eligon.
It’s a drop in the bucket of what needs to be done.
The International Energy Agency said in a report on Tuesday that the world needed to “rapidly mobilize massive financing for clean energy alternatives to coal,” especially in big emerging economies.
The money is a fraction of the $600 billion that Indonesia estimates it will need to retire its fleet of coal-fired power plants, according to Bloomberg.
Considering the high cost of carbon storage and the rapidly falling costs of renewables, “retiring coal plants earlier than expected is economically beneficial for Indonesia,” said Matthew Gray, an analyst for a research and advocacy group called Transition Zero.
Indonesia is the world’s largest exporter of thermal coal. As coal prices soared this year after the Russian invasion of Ukraine, Indonesia cashed in. It’s now poised to cash in again from a coal exit.
The G20 mood shift will be felt an ocean away at the climate talks in Egypt.
Negotiations are intensifying on the final outcome of the climate talks. They’re scheduled to wrap up on Friday but could well go into overtime. We’ll keep you posted.
Related: More details about how the United States and China agreed to resume talks, and why that matters.
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Listen to the climate activist Bill McKibben in conversation with Times podcast host Ezra Klein. They talk about the “new era” that the climate movement is entering — and the urgent need to take action.
From outside The Times
Before you go: Electric cars start to go mainstream
Battery-powered cars now make up the fastest-growing segment of the auto market, with sales jumping 70 percent in the first nine months of the year from the same period in 2021, according to data from one research firm. And industry analysts say that growth could have been stronger if automakers had been able to make more electric vehicles.
Correction: The Friday newsletter misstated the scope of pledges made last year at COP26 by the institutions that make up the Glasgow Financial Alliance for Net-Zero. The group noted its combined $130 trillion in assets and said it would work toward a net-zero economy. It did not say it would contribute $130 trillion.
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Manuela Andreoni, Claire O’Neill and Douglas Alteen contributed to Climate Forward. Read past editions of the newsletter here.
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