Green Giant, Amy Myers Jaffe (Council on Foreign Relations)

The Time Summit is an alternative investments event series, with a legacy dating back to 2000. We've indefinetely postponed new events due to Covid-19, but will notify subscibers of future plans as they take shape.

Renewable energy and low carbon-technology are coming at an increasing rate and may have a serious impact on the underlying fundamentals in the capital markets.  This recent article published in the March / April 2018 issue of Foreign Affairs touches on China’s role as a leader in renewable energy and will be a topic of conversation at our upcoming time Summit event in April.

In the late 1990s, China embarked on a new energy policy with the goal of replicating America’s relationships with major energy producing nations.  Their strategy was to target countries with tenuous relationships to Western governments in the hope of leveling the playing field with the United States.  Their initial targets – Iran, Iraq, Sudan, Russia and Venezuela – have fallen well short of their stated production.  Lack of security has hindered projects in Iraq, Iran and Africa which has caused political and social ramifications at home and abroad.  Their $9 bn investment in Russian state owned oil conglomerate, Rosneft, for a 14% stake in the firm has resulted in a multi-billion dollar loss as Rosneft’s $50 billion debt burden has forced them to change strategic course.  Finally, China has provided roughly $60 billion in loans to Venezuela but crude exports to China have resulted in only half the expected volume.  “One of the largest lenders, the China Development Bank, currently receives barely enough oil and refined products from Venezuela to cover the interest payments on its loans.”

China’s dependence on foreign oil has made it uneasy.  The United States is projected to become a net exporter of oil and natural gas by 2030 and there is concern in Beijing that they will abdicate their security role protecting oil flows in the Middle East forcing others to intercede.

With this as a backdrop, China has pivoted and focused on investment in renewable energy and low-carbon technologies.  The International Energy Agency reports that Chinese public and private sector investments in low-carbon power generation and other clean technology will total $6 trillion by 2040.  Substantial progress in this area has already been realized.  “The Chinese renewable energy sector already boasts 125 gigawatts of installed solar power, over twice the figures for the United States (47 gigawatts) and Germany (40 gigawatts).  Chinese firms now have the capacity to manufacture 51 gigawatts worth of photovoltaic solar panels every year, more that double global production in 2010.”  China is also leading the way in investments in electric vehicles.  Currently, there are over one million EVs on the roads today which is almost double the number in the US.  They aim to have over 5 million electric vehicles on the road by 2020.

As the United States looks to foster it’s burgeoning natural gas and crude production while China and others focus on renewable energy solutions, what are the geopolitical implications?  Will the majority of US states and cities continue to implement projects outlined in the Clean Power Plan?  What effect will these outcomes have in domestic and global energy markets?

At our upcoming time Summit, we have invited Jon Creyts from the Rocky Mountain Institute to offer some of his thoughts on these issues.  Jon is the founder of RMIs China Program and is a thought leader on the business implications of global climate change.  We hope you are able to join us.  To request an invitation or to register for the event please click here.

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