The Secret Deal to Save the Planet
In the next few days, there was a flurry of e-mail and phone exchanges. The APEC summit in Beijing was just a week away, and the Chinese clearly wanted to have something big to announce. But as Obama flew to Beijing, there was still no deal. Podesta told the president they were close to an agreement, but they were still juggling the language. The deal had to be “something we could feel good about,” says Podesta. “Otherwise, we could still walk away.”
The day before the summit began, Podesta and Stern hammered out the last details. The Chinese agreed to go public with the 20 percent renewable goal, as well as agreed to language that they would work to hit the 2030 CO2 cap earlier and to make clear that these reductions were made in the context of a long-term deep decarbonization effort (a point that Podesta says was “very important” to the president). In return, Chinese negotiators made sure the distinction between the obligations of the developed and the developing world was not lost in the agreement.
The next evening, Obama and Xi met privately to discuss the agreement. “It was important to both Obama and Xi to have real understanding where they were going with this, and to agree to keep talking throughout the year as we head toward Paris,” says Podesta, who briefed Obama beforehand. “The thing everyone wants to avoid is a last-minute Perils-of-Pauline situation like we had in Copenhagen.”
In China, response to the deal was straightforward: President Xi had not only pledged to clean the air and reduce carbon pollution, he had proved his diplomatic chops by striking a deal with the most powerful nation on Earth. “Xi was like a hedge-fund manager who just acquired a trophy wife,” one experienced Chinese observer notes. “It’s an affectation of being a great power.” In the developing world, there was criticism of the low ambition of the carbon-reduction targets. “These commitments are nowhere near the kinds of reductions we need to limit warming to 1.5 degrees Celsius or even 2 degrees Celsius,“ one South American activist told me.
But more practical-minded observers saw the announcement as a major breakthrough. “In one move, Obama and Xi broke the logjam of climate politics,” says Jairam Ramesh, a member of Indian Parliament and a longtime climate negotiator. “Until now, China has insisted that the U.S. and the EU are largely responsible for climate change. But this raises the bar for other nations.”
The deal also has huge economic implications both for fossil-fuel industries that dominated the 20th century (i.e., the losers) and the alternative-energy entrepreneurs poised to grab a much bigger piece of the world’s energy mix (i.e., the winners). “There is no question where the world is headed,” says Podesta. “Instead of thinking of the U.S. and China as two captains on two different teams, it’s a sign to everyone that we are both pulling in the same direction.” For tech investors, this kind of high-level alignment has a powerful impact on strategic decisions about where to put their money. It will particularly benefit clean-tech companies that can help the Chinese figure out ways to integrate massive amounts of renewable energy into their grid. “This is not some bullshit deal between [former U.S. Secretary of Energy] Steven Chu and Tsinghua University,” says Shah. “This is the U.S. government saying to American companies, ‘Go ahead, set up shop in China – we’ve got your back.’ ”
Finally, the agreement eviscerates one of the favorite talking points of climate deniers. “Their argument has always been we can’t do anything to cut emissions because China is not doing anything,” says Democratic Sen. Sheldon Whitehouse of Rhode Island. “Well, now China is doing something pretty significant, while Republicans are still huddled in the dark castle of denial.”
Of course, in the U.S., it took conservatives 30 seconds to begin hammering the deal as an economic suicide pact, arguing that the U.S. had committed to deep carbon reductions over the next decade, while the Chinese agreed to basically do nothing until 2030. In a column titled “The Climate Pact Swindle,” Fox News regular Charles Krauthammer called the agreement “the most one-sided deal since Manhattan sold for $24 in 1626.” Among other things, Krauthammer’s argument ignores China’s commitment to 20 percent nonfossil fuel power by 2030. As Sen. Whitehouse told me, “The idea that China has committed to doing nothing for the next 16 years is only true if you believe that Chinese leaders are going to wake up on New Year’s Eve in 2029 and suddenly build 1,000 gigawatts of clean energy in one night.”
The more substantial question is whether China and the U.S. can follow through on their commitments. Ironically, the Chinese may have more credibility than the U.S. “ ’Face’ is very important to the Chinese,” says Schell. “When they commit to something publicly, they do it.” Podesta agrees: “The Standing Committee has approved this commitment. The People’s Congress will approve it. It will be imbedded in Chinese law. That is significant.”
The U.S. commitment, on the other hand, stands on shakier political ground. As David Victor, professor of International Relations at the University of California, San Diego, and author for the Intergovernmental Panel on Climate Change, puts it, “It’s not clear yet if it is an Obama climate agreement or a U.S. climate agreement.” In the Senate, Mitch McConnell has already said that he will use his new powers as majority leader in 2015 to launch a full-scale attack on the EPA rules on power-plant pollution – if that attack is successful, it would be all but impossible for the U.S. to meet its
carbon-reduction commitment.
Podesta, who will leave the administration in early 2015 and will likely play a senior role in Hillary Clinton’s not-yet-announced presidential campaign, relishes the fight. “They can investigate us, harass us, try to defund us,” warns Podesta. “But the president won’t flinch on this. This is our line in the sand.”
The fact that implementation of the EPA rules is likely to come in the middle of the 2016 election campaign is just another part of the White House political strategy. “What will become more apparent is that a candidate who denies the reality of climate change will have a hard time getting elected president,” Podesta says. “The candidate who says, ‘Hey, we’ve got a problem, I think we can work to solve it’ is going to win. I don’t think you ever go wrong playing for higher ground.”
However this plays out in the U.S., it is an indisputable fact that this deal has changed the odds for a new global climate agreement in Paris in 2015. Big questions remain about how much cash the West will pony up to help the developing world finance clean-energy projects and adapt to climate change, but that can be resolved. “This is a sea change in how we think about solving the problem,” says Mohamed Adow, Christian Aid’s senior climate-change adviser in London. “We will get a deal in Paris now, I’m certain of it. Will it be enough? No. But it will lay the foundation for the future. And it will say to the world, for the first time, ‘We are serious about this.’ ”