Trump ditching the Paris climate change agreement

China is now the leader for the climate change pact

You wonder what goes on behind the scenes in the American camp before this announcement.  Are they just hustling to force a change on their internal targets? They can just change it themselves man, and there’s no need to kick up a big fuss.

A quick summary on the Paris climate change agreement: All participating countries have to cut emissions, but they set their own targets. 

Trump wants to make coal great again in America. In 2008, the US produced 1.2b tons of coal to fuel to generate half of US electricity.  In 2016, the production has dropped to 728m tons of coal, about 28% of the nation’s needs. In the past years, cheap natural gas has replaced coal and many powerplants have converted to burn Nat gas. (Source EIA). Coal production plays an ever reducing role in the US economic numbers. Making coal great again? I don’t think it’s happening.

Some argue that the Paris agreement implies a heavier burden on developed nation’s economies, while more slack is given to the developing countries because they’re ‘developing’. Well it’s up to each country to set their own targets, so I think all this is about 面子 (face in Mandarin).  Bigger developed countries are expected to lead by example right? If they don’t, why should smaller countries even bother?  If you believe that the Chinese government will do their part and focus on cleaning up, this may be a long term play, maybe a very long one. 

I’m going to look at the wind and battery sector in China. The problem is that most of the key companies are not lised, but I’ll list my selection here anyway. China longyuan power (wind, on HKEx), United power China (wind, not listed​) BYD (battery, HKEx), CATL (battery, not listed). 

Happy to discuss my reader’s thoughts too 🙂

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