Comments on: Why new coal in Turkey and the Balkans will test China’s and EU’s climate leadership https://www.euractiv.com/section/climate-environment/opinion/why-new-coal-in-turkey-and-the-balkans-will-test-chinas-and-eus-climate-leadership/ EU news and policy debates across languages Fri, 19 Oct 2018 16:55:24 +0000 hourly 1 https://wordpress.org/?v=4.9.5 By: Mike Parr https://www.euractiv.com/section/climate-environment/opinion/why-new-coal-in-turkey-and-the-balkans-will-test-chinas-and-eus-climate-leadership/#comment-334756 Tue, 19 Jun 2018 06:32:06 +0000 https://www.euractiv.com/?post_type=opinion&p=1248850#comment-334756 When a market is saturated it is inevitable that suppliers look to “develop” other markets. To some extent this is what is happening wrt Turkey & West Balkans (WB). The Chinese are attempting to bring work to companies that otherwise would have none.

The other consideration is that large coal stations, apart from generating CO2 also generate a flow of brown envelopes to politicians. The move to auctions for renewable projects makes them much less open to this type of political funding (that said – the Tories in the UK appear favour the nuclear/brown envelopes process which at least has the benefit of being zero carbon).

Moving back to financing, for any project, b(w)ankers will look at the risk profile of Turkey and WB and price it accordingly. The Chinese, using state financing might have a different view of the risk profile to that of western b(w)ankers & financiers. This automatically places RES projects at a disadvantage since EU-financed RES projects are likely to have a higher cost of finance compared to Chinese-financed coal. Indeed, it is impossible to know what the cost of finance for such Chinese projects will be.

One approach could be, (broken record starts) for the ECBundebank via the EIB to fund RES projects in Turkey & WB. 0.5% sounds like a good starting point coupled to linking the build-out of low/zero carbon power generation to trade (= access to EU markets).

One of the reasons humanity has dug itself into a CO2 hole is consumerism. Given this reality, the statement by CAN: “China needs to make sure that its Belt and Road Initiative is fully climate-friendly” is utter nonsense (does CAN think before making these statements?). The Belt road is designed to foster consumerism, the consumption of goods that for the most part will become junk in a few short years. This suits the Chinese, in the short term. However, it sits in direct contradiction to the EU’s 1st stumbling steps with respect to the circular economy.

The conclusion of the article was very much “pretty please” to the Chinese. This will not work. The only thing that will work is tying new power stations to trade with the EU. New coal stations should lead to declines in trade, new RES systems to increases in trade – with the EU, & with finance provided via the ECB/EIB through attractive loans for RES systems (which naturally will be supplied by EU companies). As it stands, China are economic competitors to the EU & are being given space in the EU’s back yard to build CO2 emitters in direct contradiction to EU carbon policies. This is a stupid & pathetic situation – the Chinese should never have been given space to do this in the first place.

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