CERAWEEK: Kerry confident US can compartmentalize, work with China on climate

The US can compartmentalize its geopolitical tensions with China to work with the country on ambitious climate plans aimed at limiting global temperature rise to 1.5 degrees Celsius, Special Presidential Envoy for Climate John Kerry said March 2 at the CERAWeek by IHS Markit conference, held virtually.

The partnership between the US and China forged under the Obama administration to lead in combating climate change was seen by many as a turning point in galvanizing global action on carbon emissions reductions and other green policies.

However, geopolitical tensions between the US and China intensified under the Trump administration over trade and technology grievances, playing out through trade and Twitter wars that added to market volatility. The Solar Energy Industries Association, for instance, said the tariffs and retaliatory actions imposed on imports cost its industry 62,000 jobs and $19 billion in private sector investment while leading to a 26 million-mt increase in carbon emissions.

"The United States does well with competition, and we're not afraid of it. What we don't want is an unfair playing field," Kerry said of the situation with China. "But the climate crisis is not something that can fall victim to those other concerns and contests."

China contributes nearly 30% of the world's carbon emissions, roughly twice the amount emitted by the US, the world's second largest emitter.

"You have to have China at the table," Kerry said, adding that the US would engage with China on climate "as a compartmentalized issue... that does not get confused by the other items" at play.

Virtual summit

Kerry is working to put together an April 22 virtual summit that will bring together the world's largest emitting countries. "We will specifically be asking all of those major emitter nations to raise their ambition as we go to Glasgow," the site of the next UN Climate Change Conference of the Parties (COP26), slated for Nov. 1-12 to upgrade commitments to the Paris Agreement.

"Even if we did everything that every country set out to do in the Paris Agreement, ... the earth's temperature is predicted to rise something like 3.7 degrees Celsius," Kerry said. "That's obviously catastrophic. That is why raising ambition as we go to Glasgow is so critical."

He added that the US aimed to unveil its nationally determined contributions under the Paris Agreement at the April summit. "It will have to be aggressive because we're behind. ... So this issue of getting more done, of holding alive the 1.5-degree limit, and of setting the pathway clearly defined with real roadmaps for how we get to net zero by 2050, that's the key and that's exactly what we're going to be focused on with China and with a lot of other countries."

Supply chains

Pressed on the Biden administration's ability to untangle competition discord, particularly in light of growing supply chain and cybersecurity concerns, from climate cooperation, Kerry acknowledged that "perhaps not all of it" could be reconciled.

But, for instance, "there are advances being made in solar panels that create panels that are 40% more efficient and don't rely on the same ingredients as the panels being produced by China in a market they have cornered at this moment," Kerry said. "So there are future possibilities here of new supply chains, of new powerhouse production entities as the technology advances."

In addition to expecting "a very different field of competition" to surface, Kerry said other countries must put China to the test and hold it accountable for its coal investments around the world. He added that his impressions from past dealings with China suggest the country has a willingness and desire to be a player in the global market for clean technologies.

'Read the tea leaves'

And as more attention turns to transitioning to a clean energy economy, areas such as hydrogen will be key, and that sector presents a "jump ball" opportunity on which the US can seize, Kerry said.

"If you're a chieftain of an oil and gas company, you can't help I would think but read the tea leaves ... as you look at where the market is going," Kerry said, alluding to a forecast plateau in oil demand and potential for fewer gas station users as consumer interest in electric vehicles grows and the administration pushes forward with plans to stand up 500,000 charging stations and roll out a fleet of 500,000 electric school buses.

"Some people are obviously fighting to hold off that inevitability, but that fight, I think, is useless, and you're going to wind up on the wrong side of this battle," Kerry said. Instead, oil and gas companies ought to be figuring out how to become full-fledged energy companies that embrace new technologies and find ways to reduce their carbon and methane emissions.

He suggested, as a way of making up for lost revenue from demand dips and preventing stranded assets, that oil and gas companies look to their pipeline infrastructure to transport hydrogen. He said that some companies in the sector were already moving aggressively to make that transition while others were fighting to hold onto a diminishing market share.

Asked about resistance coming from within Congress, Kerry asserted: "We're going to have to get rid of some of our chauvinism and our parochial components that resist common sense, and the need to move very, very hastily to get this done."