Analysis 11-01-2021


Don’t Expect Much from the G20
or COP26 Meetings


Diplomatic events are well scripted to look like successes.  Press release drafts are circulated long before the meeting starts, and prepared speeches merely reflect what was agreed upon beforehand.

The same is expected at the G-20 and COP26 meeting.  There will be signs of unity, and all will claim that new pledges of cooperation are historic.Don’t believe them.  There are loads of fractures.  France has recalled its ambassador from its oldest continuous ally, the United States, over the Australian nuclear submarine deal.  That’s serious for a relationship that goes back to the time when the US was just a group of British colonies rebelling against Britain.

Just to show that it isn’t picking on the US, France just this week, detained the trawler of its oldest, historical enemy, the British, over a fishing rights dispute.

Germany, on the other hand, is pushing for a European Union army that will allow it to bypass its NATO allies.  And Germany didn’t earn points with its NATO allies when German Defense Minister Annegret Kramp-Karrenbauer seemed to advocate a “first use” nuclear policy when she said that NATO is “prepared” and ready to activate its nuclear arsenal against Russia.

Meanwhile, the President of the United States will be attending in the most politically weakened condition ever.  Polls show many Americans think that Biden is mentally incapable to be president and his favorability numbers are collapsing.  Meanwhile, his domestic legislative agenda is in tatters thanks to fractures in his party and bipartisan opposition.

Don’t forget that there is inflation and shortages bedeviling Americans.

G20 will also have to solve the maze of travel restrictions and regulations hampering travel in this age of Covid.  And the smaller nations are complaining about un-kept promises to donate Covid vaccines to lesser developed nations.

The first meeting will be the G-20 meeting this weekend in Rome.  Obviously, the Covid pandemic will top the agenda and many of the smaller nations will push the major countries to make good on their pledges to send vaccines.  The Director General of WHO expressed his anger when he said, “But the concentration of these tools in the hands of a few countries and companies has led to a global catastrophe, with the rich protected while the poor remain exposed to a deadly virus.”

The big decision coming out of the G20 meeting will be a promise to send more Covid vaccines to the lesser developed nations.  However, like many of the promises coming from international meetings, the reality will lag far behind the promises.

The COP26 meeting in Scotland was to work out a new international agreement on climate change.  However, international events and the non-attendance of Russia’s Putin and China’s Xi imply that any agreement will not be worth much, especially since China is the world’s biggest polluter.

Other heads-of-state that aren’t expected to attend the COP26 are India, Japan, Brazil, South Africa, Iran, and Mexico.

The COP26 had been billed as one of the most important events in the past few years.  The goal was for world leaders to come up with a concerted effort to reduce emissions and tailor a mechanism for implementing the Paris agreement to contain global temperatures.

As many as 25,000 delegates are flying in on small private jets – making it a major pollution event itself.

Many of the attending nations have no real intention of following through.  China has moved back to coal fired generators as the current supply of electricity is insufficient for current economic growth.  Australia, the world’s largest coal exporter disagrees with the IPCC’s goal to shut down all coal fired plants.

India has made it clear that any agreement on reducing carbon emissions will depend on Western nations and their willingness to provide major subsidies to poorer nations (India included).

Even American climate envoy John Kerry has pessimistically stated, “There will be a gap between the commitments attendees are expected to make at the summit and actual commitments necessary to make the 1.5-degree scenario happen.” (temp of the planet)

There is also the reality that commitments made by delegates in Scotland will not be ratified back home.  In the case of the United States, the Paris Accords were never passed by the US Senate, which means that they don’t have the authority of law.  And, with an evenly split US Senate, there is no doubt that any agreement Biden makes in the next few weeks on climate change will not garner the 67 votes in the Senate necessary to ratify the agreement.

The same political problem is found in the Western democracies, who will need the agreement of their legislatures, and who will find strong political opposition as voters learn the cost of these agreements.

Whatever is agreed upon at COP26, it will face a harsh reality when the delegates get home.  Already citizens in Europe are facing the prospect of a cold and dark winter.  They are also facing the reality that “Green” energy isn’t meeting the needs of the Europeans.

The CEO of Blackrock, Steven Schwarzman, admitted this week that,” Many British residents are being faced with the fact that they may need to ration heat and could be faced with the chilling reality that lives could be lost if this winter is as cold as forecasters are predicting.”

“We are being told we are facing a propane Armageddon,” he continued.

In Europe, natural gas is $29 per million BTUs, compared to the US, where natural gas is only $5 per million BTUs.  Can the regular British citizen afford to pay the steep electrical prices this winter?

Coal, which was once the anathema of energy production is suddenly becoming popular again as European power producers bring coal powered plants onboard again.

The same is happening in the United States, which is a major producer of coal.  Even though American supplies of natural gas are good, power companies are hedging their bets with coal stockpiles because natural gas prices are too high to produce electricity at economical prices.  According to Bloomberg, American coal supplies are the lowest since 1997.  Currently coal produces 25% of America’s electrical power.  However, that number is expected to climb this winter as power plants are expected to burn 19% more coal this year.

The biggest problem isn’t the lack of coal reserves in the ground, but the number of coal miners who can produce enough coal this winter.

Escalating energy prices will also hurt food prices at the same time cold weather will be pounding the northern hemisphere.  The price of the traditional Thanksgiving turkey in America has risen 21.91% in the last year.

Will the average person tolerate that?

Blackrock CEO Steven Schwarzman is pessimistic.  He told CNN, “When power goes out, people are not going to be happy.  And, people are really not going to be happy if it goes out for an extended period of time…we will soon see very unhappy people all over the globe…you’ve got real unrest [in the developed world] …This challenges the political system and it’s all utterly unnecessary.”

In many ways, it seems that the delegates at COP26 are emulating the Roman Emperor who fiddled whole Rome burned.  Recent attempts to increase “Green” energy while decommissioning “dirty” energy sources have left many without reliable energy sources during high usage periods like winter.

Not only is heating impacted, but there are also reduced supplies of gasoline, which are expensive when they can be found.  This in turn increases the cost of transportation of food and other necessary goods.

Demand for “clean” transportation has also cost Americans.  In California, where container ships are piling up off the coast, only “clean emissions” trucks that have been produced in the last three years are eligible to pick up containers at the ports of Los Angeles and Long Beach.  This, in turn has left thousands of containers sitting in the port because they can’t be moved.

And, since there is a shortage of computer chips, the companies that produce trucks can’t increase production.

Given the wide range of problems right now, the regulations being pushed at COP26 not only seem difficult, but dangerous to a population that can’t afford food or heating and is on the verge of protesting and rioting.