The frozen lake of US-Iran confrontation is generating a pinging sound. The cracking of the ice is yet to produce that loud booming thunderclap. But these are early days.
It was only last Thursday that the US and the three European states who are party to the Joint Comprehensive Plan of Action (2015 Iran nuclear deal) – Germany, France and the UK, or the “E3” – lobbed a joint statement across the court to Tehran, whereby US President Joe Biden’s administration announced its willingness to return to diplomacy with Iran.
It was an opening move, where the Biden administration merely reiterated its position that it will return to the JCPOA if Tehran returns to strict compliance with it. The E3 and the US seek to strengthen the JCPOA to address broader security concerns related to Iran. But certain other moves went along with it on the same day:
Washington expressed its acceptance of an invitation from the European Union High Representative to attend a meeting of the so-called P5+1 countries – Britain, China, France, Germany, Russia and the United States – with Iran for an informal “diplomatic conversation” to chart a way forward;
The Biden administration rescinded the Donald Trump administration’s decision in September 2020 to invoke “snapback sanctions” worldwide at the United Nations – a provision under Security Council Resolution 2231 – that was earlier rejected by the other 14 members of the council; and
The Biden administration also informed Iran’s UN Mission in New York that it had removed Trump’s travel restrictions on its diplomats in New York, which allows them now to move anywhere within a 25-mile (40-kilometer) radius of the UN headquarters. Some Iranian officials also may be allowed to travel to the UN.
A conversation between US and Iranian diplomats in an informal setting certainly serves a purpose insofar as it is a follow-up on an idea floated by Iranian Foreign Minister Javad Zarif during an interview with CNN on February 1 that the EU foreign-policy chief Josep Borrell could assume the role of coordinator and create a mechanism to choreograph the steps to be taken simultaneously by both the Iranian and US sides to achieve JCPOA reinstatement.
Iranian Deputy Foreign Minister Abbas Araqchi speaks over the Iran nuclear deal during a press conference in Tehran on August 9, 2015. Photo: AFP/Fatemeh Bahrami/Anadolu Agency
Informal meeting
By Saturday, Iranian Deputy Foreign Minister Abbas Araqchi, the country’s chief nuclear negotiator, was on record saying that Tehran too was considering the proposition from Brussels and would “respond to this proposal [on an informal meeting] in the future.”
Now, it is easy to see that the retraction on the “snapback sanctions” and the removal of restrictions on Iranian diplomats are necessary prerequisites of a US-Iranian engagement.
Meanwhile, on Friday, Biden said at the virtual Munich Security Conference that the US is driven to “re-engage in negotiations” to revive the JCPOA. He added a positive note: “We need transparency and communication to minimize the rise of strategic misunderstanding or mistakes.”
On Sunday, White House national security adviser Jake Sullivan said the US has started talks with Iran over the return of at least five American hostages Tehran is holding. “We have begun to communicate with the Iranians on this issue,” Sullivan said.
Also on Sunday, Rafael Grossi, the head of the International Atomic Energy Agency, met with officials in Tehran to try to maintain his inspectors’ ability to monitor Iran’s nuclear program. After the talks, a joint statement was issued, which suggests that “a temporary bilateral technical understanding” has been reached for a three-month period to continue necessary verification and monitoring activities.
But the deal also calls for less access for IAEA inspectors and no more snap inspections. That is to say, Iran is sticking to its stance that unless the US lifts its sanctions, it will soon abandon the Additional Protocol of the JCPOA, but is only partially curbing the inspectors’ activity at this point.
Broadly, both the US and Iran are slowly but steadily edging back to the negotiating table. Both want the other party to go first, and neither would allow perceptions of weakness to form or that they’re acting under pressure. It’s a delicate tango where both are also compromising while appearing to do otherwise.
Newspapers on Sunday carried sensational reports quoting a national-security source that the US is considering sanctions relief for Iran as a first step toward reviving the 2015 nuclear deal. If so, Washington is about to make the first move on the expectation that Tehran would reciprocate with some significant compromises.
A difficult path for Biden
“Sanctions relief is definitely coming, not today or tomorrow but it is coming,” the UK’s Sunday Times quoted its source.
But the catch is that Iran can return to the JCPOA by ceasing to enrich uranium over the limit set by the deal, exporting most of its stockpile, and warehousing banned centrifuges, whereas the Biden administration has a far more difficult path to traverse by way of untangling scores of Trump-era financial, economic, trade, targeted personal and business sanctions and lift those that violate the JCPOA.
Israel’s Prime Minister Benjamin Netanyahu has been advised to tread carefully with the Biden administration. Photo: AFP
One possibility is that the Biden administration may move in this direction after the “diplomatic conversation” that the EU foreign-policy chief is facilitating. In Tehran’s estimation, the lifting of US sanctions is now a foregone conclusion, only a matter of time. There is much optimism that the White House will not allow any interference by the United States’ regional allies.
A commentary published by Iran’s official Islamic Republic News Agency (IRNA) draws satisfaction that President Biden “gave a cold shoulder” to Israeli Prime Minister Benjamin Netanyahu and has not forgotten the latter’s defiant behavior toward then president Barack Obama by attending a congressional hearing in Washington without being invited by the administration and criticizing the administration’s negotiations with Iran.
It had “angered the then vice-President Joe Biden, who shouted that no authority in Israel has the right to humiliate the US president. Netanyahu has been advised to avoid direct confrontation with the Biden administration.”
Again, there is talk that the White House intends to release a redacted version of the Central Intelligence Agency report on the brutal killing of Saudi journalist Jamal Khashoggi at the consulate in Istanbul in 2018. If the report holds that the Saudi crown prince is culpable for the murder, it will rock US-Saudi relations.
Biden has made his aversion toward the Crown Prince Mohammad bin Salman known by letting it be known that he will only interact with King Salman.
Clearly, there is a profound sense of unease in Saudi Arabia and the United Arab Emirates over the Biden administration’s decision to engage with Iran. Conceivably, Tehran senses that a historic moment is at hand marking the end of the United States’ decades-old strategy to encircle Iran with an alliance of the Gulf Arab states and Israel.
As the situation around Iran begins to transform through the coming weeks and months, West Asian politics and the regional security scenario will change beyond recognition. The Western powers are for the first time talking about the imperative need of reconciliation between and among the regional states of the Persian Gulf instead of fueling the regional rifts and capitalizing on them.
In their statement of February 18, the US and E3 “expressed their joint determination to work toward de-escalating tensions in the Gulf region.” By force of circumstances, the Western powers are appropriating an idea that Russia and China have been expounding all along.
India’s ‘Solar Man’ lights path out of poverty with clean power
KOLKATA, India – Since he was a child, Santipada Gon Chaudhuri had sought ways to help India’s rural poor, so when the electrical engineer was invited to visit a co-worker’s home in the Himalayan village of Herma in the early 1980s, he saw his chance.
“I was appalled to see how local communities were living in darkness after sunset,” remembered Chaudhuri, 71, who then worked for the government in the northeastern state of Tripura.
“Some used kerosene lamps, but even kerosene was not always easy to get. Since I had both the skill and position to try and provide power to them, it made me act,” he said.
The villages of Tripura are located on tough, hilly terrain, where Chaudhuri realized it would be hard to put up power lines.
“But they had solar energy in abundance,” he said in an interview.
In 1983, he used government funding to install solar panels for 70 homes, as well as running a community television and water pump — the first time anyone in the hamlet had seen electric light.
That small project sparked a career dedicated to bringing energy to people in impoverished, remote communities, a mission that earned Chaudhuri the moniker of India’s “Solar Man.”
Today, more than 100 homes and businesses in Herma are lit by an updated solar energy system, allowing villagers to be more productive while reducing their use of expensive, polluting fuels like kerosene.
“Life in the village would come to a complete standstill after sunset. But with light in our homes now, our children are studying until night,” said villager Sumoti Riyang, 33.
“Shops and business establishments remain open in the evening. We can work more. All this is generating more income for us,” she said.
In his Kolkata office, adorned with awards he has won since his first project nearly 40 years ago, Chaudhuri said he gets “great satisfaction” from seeing how solar power has changed lives in Herma, connecting residents to the modern world.
Career of firsts
Herma was the first tribal village in the country to gain access to solar power, and by 1989 Chaudhuri had led the installation of solar technology in nearly 40 villages across India’s northeastern states.
Four years later, he developed India’s first centralized solar power station with a distribution network on Sagar Island in the Sundarbans, home to one of the world’s largest mangrove forests, supplying 100 households through power lines.
The project was considered a breakthrough at a time when solar technology “was largely confined to laboratories and prototypes”, said Samrat Sengupta of the New Delhi-based Centre for Science and Environment (CSE), a nonprofit think tank.
By 2000, more than 400,000 people in villages around the Sundarbans national park were using solar power, through a mix of mini-grids and domestic solar power systems.
At the time, the area had the highest per-capita consumption of solar power in the world, Chaudhuri noted.
The project earned him an Ashden Award, known as the “Green Oscars,” and the Euro Solar Award from Germany.
In 2006, it also inspired India’s then-President A.P.J. Abdul Kalam to invite Chaudhuri to design a captive solar unit for the presidential palace.
“Chaudhuri’s work is a classic example of empowerment of indigenous communities through solar power,” said Arun Tripathi, director general of the National Institute of Solar Energy, an autonomous body under the renewable energy ministry.
In 2009, Chaudhuri installed the country’s first grid-connected solar plant in West Bengal’s Jamuria village, a 2-megawatt (MW) project serving 5,000 families.
This was lauded as an “environmental breakthrough” because, until then, solar power had been limited to remote areas without access to electricity, said CSE’s Sengupta.
Jamuria was the first location to use solar to replace coal power in the grid, bringing clean energy into the mainstream, he said, noting it cut the amount of coal burned locally by 2,000 kilograms per hour and decreased carbon emissions.
Floating solar
Sengupta and others said Chaudhuri’s work helped pave the way for India’s National Solar Mission, launched in 2010.
The initiative, on which Chaudhuri consulted, had an initial target of producing 20 gigawatts of solar power by 2022.
Having already nearly doubled that ahead of time, India has set a new goal of 100 gigawatts.
But as its solar power expansion has gained pace, a growing population and increasing urbanization have made finding enough land for big projects more difficult.
In response, Chaudhuri came up with India’s first floating solar power station.
In 2014, after joining the nonprofit NB Institute for Rural Technology, which he now heads, he led construction of an experimental 10-kilowatt government-funded floating solar panel on a lake in Kolkata’s New Town.
“Designing the floating structure of the panel and anchoring it in the water body were major challenges,” he said.
That project grew into a national program that now generates more than 1,700 megawatts of solar power from floating panels in various coastal states around the country.
Despite its progress, India’s solar push has some limitations including high capital costs, scarcity of land and the need for sunny weather, said Partha S. Bhattacharyya, former chairman of Coal India Limited, the world’s largest coal producer, which is also investing in solar energy projects.
“Thermal (coal) power is reliable and consistent, due to greater grid stability,” he added.
Chaudhuri and his team are currently experimenting with solar-powered pumps that push water up to a higher storage reservoir that can then generate hydro-electricity using micro turbines, supplying villages when needed.
“The very concept of solar power has changed from simply providing lights to controlling carbon emissions,” Chaudhuri said. “It is time that we seriously think about how to leave behind a more livable world for future generations.”
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The Lego Group will continue to develop new products that resonate with distinct and different consumer tastes in Hong Kong, Taiwan and mainland China as people in the three markets tend to prefer different products.
“In Hong Kong, brands are a big part of our everyday life… superhero and Disney-themed Lego products are quite popular,” Troy Taylor, the general manager of Lego (Hong Kong, Taiwan and Macau), said in an interview with Asia Times.
“Taiwan’s buyers have a deep interest in Japanese brands. Lego Super Mario did very well. NASA Space Shuttle and Ninjago are also very popular there.”
Lego Monkie Kid is tailored made for the Chinese market. Photo: Lego.com
“Mainland tourists would purchase different things, such as Lego City and Lego Friends. The mix is a little different,” Taylor said, adding that the company launched the Monkie Kid products for the Chinese market last year.
“We are a Danish company. Predominately our brand has been very strong in western Europe, United States, Australia and New Zealand,” he said. “Over the past five to six years, we’ve developed products for the local consumers in Asia. Monkie Kid is one of them. It’s a classic tale of the Journey to the West.”
Lego Spring Lantern Festival Photo: Lego.com
Taylor said Monkie Kid had become one of the top-selling themes in China and across the Asia-Pacific. At every Chinese New Year, the company launches two new festival specials – Dragon Dance and Spring Lantern Festival – for customers in the Greater China region.
“To launch some Hong Kong-style products? We will never say never. There are a lot of things in Hong Kong which have a broader appeal, not only in Asia but also in western markets,” he said. “We are always going to look at something which can connect with shoppers in a different way.”
He said the company’s designers were based in Billund but they did research all around the world in order to understand what children want in different countries and regions. People can also submit their designs to Lego Ideas, a crowdsourcing platform.
Covid lockdowns
Established in 1932, the Lego Group said last month that its revenue rose 13% to US$7.04 billion for 2020, with double-digit growth in all major markets as people stayed home and played more with toys during lockdowns. Net profit surged 19.4% year on year.
“We had double digit growth in Hong Kong last year,” Taylor said. “We grew at an even higher rate in early 2021. The growth trend continues this year.”
Lego’s office in Tsim Sha Tsui in Hong Kong Photo: Asia Times
Taylor said Lego’s sales in Hong Kong were hurt more by the first three waves of the pandemic in February, April and July last year than the fourth wave between Christmas and Lunar New Year as people had “Covid-fatigue.” He said sales rebounded whenever social-distancing rules were loosened.
A mosaic made of bricks in Lego’s Hong Kong office Photo: Asia Times
In February 2021, the company opened its first Legoland Discovery Center in K11 Musea, a luxury shopping mall in Hong Kong’s Tsim Sha Tsui. However, the debut was disrupted by a virus outbreak at a restaurant in the mall.
“The Legoland Discovery Center had a tough start because of the situation in K11. But since then it has been booked out everyday…Apart from the Disneyland and Ocean Park, Legoland is a different attraction for families to have a great day out.”
The company has been in Hong Kong for about 30 years, with five certified stores now operating in the territory. During the pandemic, it has benefited from strong online sales by partnering with Hong Kong’s HKTVMall and Taiwan’s Momoshop.
“Our online sales tripled last year. We started the journey in 2019,” Taylor said. “When the social unrest hit Hong Kong 2019, our physical stores were being closed on weekends. We looked for opportunities to build our brand online…it’s all before the pandemic. We’ve already got the experience of dealing with some upheavals.”
“During the pandemic, we also shifted our focus from tourist locations such as the Times Square and Harbour City to local residential areas such as Tuen Mun Plaza. We are planning to add more stores in other residential areas,” he said.
Lego Flower Bouquet is one of the best selling items during the pandemic. Photo: Asia Times
He said the company entered Taiwan’s market 10 years ago, currently with one store in Taipei and another in Taichung, and would open a third in Hsinchu later this year. He said the island was one of the highest growth markets in Asia for Lego in the last two years.
In 2020, the company opened 134 new Lego branded stores worldwide including 91 in China with two new flagship stores. That growth took the total number of Lego stores worldwide to 678.
Counterfeit products
In recent years, China’s Lepin, which has a logo similar to Lego, has produced many toy brick kits that look identical to Lego’s products. This month, a group of Lepin’s manufacturers were fined 30 million yuan (US$4.6 million) by the Guangdong High People’s Court for making and selling copycat Lego products.
Lepin’s Castle Hogward Harry Potter Photo: lepinworld.com
Some Lepin products can still now be seen in shops in Sham Shui Po and Mong Kok despite the strong efforts of Hong Kong Customs and Lego’s intellectual property protection team to crack down on counterfeit products.
“Lepin has been a challenge for our brand for a while. It’s misleading the consumers that they were Lego,” Taylor said. “We only have one brand. We protect it not only because of financial reasons but also we want children to have a safe and high-quality play experience.”
He said although counterfeits would never be completely eradicated that Lego’s legal team would continue to fight against them.
China breaks off big tech’s romance with the state
China’s state-run anti-monopoly bureau has tightened its regulations on big tech players, as shown by its recent move against the country’s largest e-commerce company, Alibaba Group.
Alibaba was hit with a record antitrust fine of 18.2 billion yuan (more than A$3.6 billion) over the weekend for supposedly abusing its market dominance. The company, which operates the digital payment platform Alipay and offers bank loans to entrepreneurs, issued a public apology:
“Alibaba accepts the penalty with sincerity and will ensure its compliance with determination. To serve its responsibility to society, Alibaba will operate in accordance with the law with utmost diligence, continue to strengthen its compliance systems, and build on growth through innovation.”
Meanwhile, questions have been asked about the whereabouts of Alibaba’s founder Jack Ma. In October last year, Ma lashed out at China’s financial watchdogs and banks.
Among other complaints, he criticized the state-managed financial sector and was subsequently hauled into a meeting with regulators. After that, the always-visible Ma was not seen in public for months.
Ma’s sudden withdrawal is just one of several developments that point to a huge shift in the regulation of China’s digital space. The lenience once accorded to tech companies by the state no longer holds true.
And recent actions against Alibaba may signal the beginning of the end of the romance between Chinese big tech and the government.
A fawning apology
The first real test for this relationship came late last year. China’s State Administration for Market Regulation charged Alibaba’s affiliate Ant Group (also owned by Ma) with anti-competitive behavior.
Some of Ma’s comments around that time were not received well in Beijing. In October, he claimed China’s banks operated with a “pawn-shop mentality.”
According to reports, President Xi Jinping himself authorised the subsequent withdrawal of Ant Group’s initial public offering launch on the Shanghai and Hong Kong stock exchanges.
A 2015 file photo shows Xi Jinping shaking hands with Jack Ma during Xi’s meeting with prominent Chinese and US entrepreneurs. Photo: AFP
The company was then forced to incorporate itself as a financial institution and subject itself to supervision by China’s state-controlled central bank.
The anti-monopoly ruling dealt out to Ant Group last year, and Alibaba more recently, aren’t incompatible with corporate governance in Western democracies. However, the chief executives of Western tech companies generally don’t make fawning apologies to government following accusations of anti-competitive behavior.
There was a time in China when big tech firms lived the dream. Historically, China’s regulators have given its internet companies much more latitude than afforded to the tightly controlled state-owned media.
As my colleagues and I explain in our book, the Chinese government’s decision in 2007 to require all video-sharing platforms to be licensed led to the rapid market dominance of Baidu, Alibaba and Tencent. These were followed by Bytedance (which owns TikTok), Kuaishou and Meituan.
The licensing requirement was a response to pressure from international copyright holders, including the Motion Picture Association of America. It eliminated less financially robust operators, many of whom were breaching copyright.
Aware of their social responsibility, many big tech leaders espoused the Chinese Dream: Xi Jinping’s roadmap for national rejuvenation. And Alibaba led the way.
Alibaba is still widely considered among China’s tech national champions. Image: Agencies
Over the past decade, it set up rural e-commerce hubs called Taobao villages to play to the government’s tune of “rural revitalization.”
In 2015, when the central government announced a campaign to activate grassroots entrepreneurship, Alibaba partnered with the local provincial government in Zhejiang. The resulting project was aptly named “Dream Town”, which the governor of Zhejiang described as:
“a new type of mass entrepreneurial space, a giant incubator, a young entrepreneurial community, a new information economy motor, an internet start-up ecosystem.”
All the while, Alibaba had been adding several enterprises to its war chest, mostly acquisitions of smaller companies. It took the major share of popular video site Youku Tudou and bought into the film business, getting closer to younger audiences.
The state steps in
China’s internet companies have built the infrastructure of China’s digital economy, which is now estimated to account for 36.2% of GDP. This growth is largely due to the forces unleashed by China’s new breed of digital capitalists.
Alibaba has invested heavily in research and development over the years. It has a modern campus in the Yuhang district in Hangzhou, recruiting foreign talent. Other tech giants aren’t far behind. Tencent has similar campuses in Guangzhou and Shenzhen, and Huawei has one in Dongguan.
As Stephen Barthlomeusz of the Sydney Morning Herald notes, the state regulator’s recent targeting of Alibaba (and other major tech companies) doesn’t come without cost.
China’s tech market has driven growth and innovation. In fact, China’s anti-monopoly laws have existed since at least 2007. But their enforcement was lacking, as the state opted for innovation by nationalizing the tech sector and letting it develop.
Putting a squeeze on activities now runs the risk of slowing down China’s economy. At the same time, the Chinese public is growing disillusioned with the predatory practices of big tech. Sound familiar?
The visible hand
At the same time, China’s tech companies owe a great deal of their success to the government. The state allowed them to benefit from policies designed to keep foreign competitors at bay, and to attract human capital back to China to work in these enterprises.
In return, the companies have helped the Chinese state further its technocratic model of surveillance, through investing in the social credit system and facial recognition.
A mobile screen with the most common applications of the four Chinese technological giants Baidu, Alibaba, QQ from Tencent and MI from Xiaomi. Photo: AFP/Riccardo Milani/Hans Lucas
But the market no longer offers the pretence of distance from government intervention. And new laws allow the Chinese government to access information about the users of China’s tech platforms.
This is the status of the relationship going forward. The question now is whether this will lead to a permanent chill. In the year celebrating the 100th anniversary of the Chinese Communist Party, perhaps it would be more expedient for China’s tech companies to toe the party line.
With the state’s propaganda apparatus reminding people of its victory over capitalism, it’s in the interest of incumbent players to adopt the principles of socialism, rather than play to their shareholders.
This story originally appeared on The Conversation website and is republished with permission. To see the original, please click here.
U.S. condemns sentencing of Hong Kong activists on ‘politically motivated’ charges
Washington – The United States on Friday condemned the sentencing of several Hong Kong democracy activists for their roles in protests that triggered a crackdown on dissent by China, again accusing Beijing of denying Hong Kongers freedoms they were promised.
U.S. Secretary of State Antony Blinken called the charges against the activists “politically motivated” and demanded the release of “those detained or imprisoned for exercising their fundamental freedoms.”
Hong Kong media tycoon Jimmy Lai was jailed for 14 months on Friday along with four other veteran activists. Martin Lee, who is known as the “father of democracy” in Hong Kong, received a suspended sentence.
The sentences decided on Friday were the latest in a relentless and successful campaign by China to silence dissent since the protests in 2019.
Blinken called the decisions an example of how authorities in Beijing and Hong Kong “undermine protected rights and fundamental freedoms” guaranteed when Britain handed Hong Kong back to China, “in an effort to eliminate all forms of dissent.”
“We will continue to stand with Hong Kongers as they respond to Beijing’s assault on these freedoms and autonomy,” Blinken said in a statement.
Britain and the European Union also condemned the prison terms handed out to Lai and others.
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Rush for carbon credits spurs surge in power company schemes
A rush by companies to buy credits to offset carbon emissions has led to contentious schemes being developed by large power companies including India’s Adani Group and US-based NextEra Energy.
Fundamental to the principle of offsetting is that the projects that generate credits should deliver carbon benefits that are additional to a business-as-usual scenario, and be able to show they would not have been viable without the revenue from offsets.
But some of the most abundant credits are from big renewable energy schemes developed by well-funded power groups, according to data compiled by the Berkeley Carbon Trading Project.
As the world races to decarbonise power grids, climate policy experts are questioning the validity of these renewables offsets — which account for about a third of the more than 1bn credits issued to date.
“If you buy carbon credits from a large-scale renewable electricity project you are making zero difference for the climate,” said Gilles Dufrasne of Carbon Market Watch. Since offsets from renewable energy projects were among the most plentiful and cheapest available, companies looking to neutralise their emissions were buying them “whether they have good intentions or not”.
For renewable energy projects, the financial test for offset credit eligibility has become more difficult to apply as investor demand and government support for clean energy has accelerated. A 2016 study for the European Commission found that many renewables projects were “unlikely to be additional”.
“The revenue from the [credits] for these project types is small compared to the investment costs and other cost or revenue streams . . . Moreover, many projects are economically attractive,” it found.
There are more than 126m renewable energy credits for sale, each representing a saving of 1 tonne of CO2-equivalent, with roughly 191m used since the early 2000s, according to Trove Research. While some of those available were issued more than a decade ago, many were generated in the past few years.
Renewables credits linked to emissions reductions between 2016 and 2018 from large projects in India and China have largely driven the value of S&P Global’s Platts CEC, which tracks the price of credits eligible for the aviation industry’s flagship offsetting system. It has been valued at about $2.10 per metric tonne of CO2-equivalent since mid March.
“Most people are going to take the easiest way to transact,” which was often a $2 renewables credit, said Jonathan Goldberg, chief executive of advisory group Carbon Direct. Credits from other project types, such as carbon capture schemes, can cost much more.
Among the renewables projects with the most available credits — 3.1m, according to the Berkeley data — is a solar-power development by Mumbai-listed Adani Green Energy, tycoon Gautam Adani’s renewables business in which French oil major Total has a 20 per cent stake. Adani has said he intends to build the world’s largest solar-power company by 2025.
The project, designed to deliver 990MW of power to five states in India, is expected to produce 15.5m credits over 10 years, linked to emissions savings from 2017 onwards. Recent buyers of the credits include aerospace manufacturer Boeing.
The application to generate offsets was approved by Verra, a Washington-based body that certifies carbon emissions. It says that without the revenue from the credits, the development would have generated an estimated return of only 6-10 per cent for equity investors, below the benchmark of about 15 per cent for energy projects in India — a figure based on a standardised United Nations methodology.
Project documents state that its debt-to-equity ratio was 70:30. Utility-scale solar and wind projects in India are typically “highly leveraged, with average debt-to-equity ratios of around 75:25”, according to an International Energy Agency clean energy report in November.
In 2019 Adani Green issued $862.5m in green bonds to refinance solar plants. Another Adani solar scheme has been issuing offsets since 2020, and an Adani wind scheme is in the process of registering with Verra.
The same methodology, which in most cases does not consider the financial clout of the project developer, has been applied to two grid-connected solar projects in India by big renewables groups Acme Solar and New York-listed Azure Power, a New Delhi-based solar company. They are expected to produce a combined 30m credits over 10 years, related to emissions savings from 2017 onwards.
Also for sale are half a million credits from a Texas wind farm developed by NextEra Energy, the solar and windpower group that last year briefly overtook Exxon as the most valuable US energy group. The project’s earliest credits related to emissions savings from 2010, but savings made in 2019 produced the greatest number, according to the Berkeley data. Recent buyers include Delta Air Lines and London-listed insurer Hiscox.
Barbara Haya, research fellow at the University of California, Berkeley, said the rules governing which projects could generate offsets should be tightened up “urgently.”
“We continue to produce more and more credits that clearly do not represent real emissions reductions,” she said. Haya’s 2010 PhD on earlier renewable energy offsetting projects in India and China found that “the large majority” were not additional.
Verra and Gold Standard, another certification body based in Geneva, stopped approving most new renewables projects from the start of 2020. Verra said large projects that applied before the deadline were “more frequently rejected” than smaller schemes.
“Early [renewables] projects took additional risk and depended on carbon finance to do so — and that investment helped change the space,” Verra said in a statement.
Adani declined to comment, while Acme did not respond to requests for comment. NextEra said it had followed Verra’s protocol.
Azure Power said that while revenue from carbon credits was “small overall”, carbon credit sales could allow certain projects to be viable that otherwise may not reach minimum return. “Ultimately, revenue from the sale of carbon credits allows us to provide lower prices for renewable energy to customers.”
China’s massed drills near Taiwan take aim at Washington audience
Taipei – Chinese carrier drills and stepped-up incursions into Taiwan’s air defense zone in recent weeks are meant to send a message to Washington to stand down and back off, security sources in Taipei say.
The increased activity — which China, unusually, described as “combat drills” on Wednesday — has raised alarm in both Taipei and Washington, though security officials do not see it as a sign of an imminent attack.
Rather, according to an official familiar with Taiwan’s security planning, at least some of the exercises are practicing “access denial” maneuvers to prevent foreign forces from coming to Taipei’s defense in a war.
“China claimed that the drills are near Taiwan, but judging by their location it’s actually meant for the U.S. military,” said the official in Taiwan, speaking on condition of anonymity as he was not authorized to speak to the media.
As China sailed an aircraft carrier group near Taiwan last week, its air force simulated attacks on American ships, although no U.S. Navy vessels were known to be in the area at the time, the source said.
The U.S. Navy has been carrying out regular transits of the Taiwan Strait, which separates the island from China.
One Western security source said the almost-daily flights by Chinese anti-submarine aircraft in the northernmost part of the South China Sea were probably a response to U.S. missions there, including by submarines, or to show the Pentagon that China can hunt for U.S. submarines.
“They are not chasing Taiwanese subs,” the source said, pointing to Taiwan’s own tiny fleet of four, two of which date from World War II.
Taiwan President Tsai Ing-wen greets former U.S. Deputy Secretary of State Jim Steinberg at a meeting at the presidential office in Taipei on Thursday. | POOL / VIA REUTERS
The U.S. Navy does not give details of any submarine patrols near Taiwan or in the South China Sea.
President Joe Biden’s White House has maintained a tough-on-China stance inherited from the Trump administration. That has included more visible support for Taiwan, angering China, which considers the island part of its territory and sees Washington as giving succur to Taiwanese who seek independence, a red line for Beijing.
Two U.S. military officials, speaking on the condition of anonymity, said that although the United States was concerned about Chinese activity around Taiwan, there was no sense of an imminent attack.
“For the past five years, China has been the centerpiece of the United States’ national defense strategy. So of course we’re concerned,” one official said.
China’s Defense Ministry and the U.S. Navy’s 7th Fleet did not respond to requests for comment.
Taiwan’s Defense Ministry said that it was keeping a close watch on “enemy movements” and that it has combat plans to deal with scenarios for a Chinese attack. It did not elaborate.
Very unusual image of the commanding officer and executive officer of #destroyer USS #MUSTIN DDG89 as they shadow #Chinese#carrier#LIAONING 16 in the Philippine Sea on 4 April. US #Navy rarely acknowledges both its efforts to shadow Chinese ships and Chinese shadowing US ships pic.twitter.com/2tv4GF7XIO
Although China has escalated its rhetoric in response to U.S. warships passing through the Taiwan Strait, a U.S. defense official said Washington had not seen any kind of operational military escalation by the Chinese in response.
In a statement to Reuters, China’s Foreign Ministry said the United States has “swelled the arrogance of Taiwan independence forces.”
Washington “bears an inescapable responsibility for tensions in the Taiwan Strait,” it added.
A senior U.S. administration official said that regardless of who Beijing’s incursions near Taiwan were aimed at, their effect was direct “intimidation and coercion” of Taiwan.
“Our operations there have been in a pretty steady state consistently,” the official said. “So I don’t think there’s an increased pace of U.S. military operations that are necessarily driving what Beijing is doing. That feels a little bit like an excuse there for what they’re doing.”
The U.S. Navy this month took the rare step of publishing a photo on its main website of a U.S. warship in the Philippine Sea watching China’s Liaoning carrier.
Raising the stakes, China’s Navy said for the first time last week that carrier drills near Taiwan would become routine.
Another U.S. warship sailed through the Taiwan Strait two days after China’s announcement of its carrier maneuvers, part of what the Pentagon refers to as “routine” transits that have prompted Beijing to accuse Washington of causing regional tensions.
“China’s top concern in any Taiwan contingency would be preventing or at least blunting armed intervention by the U.S.,” said Greg Poling, a maritime security expert at Washington’s Center for Strategic and International Studies.
“So demonstrating increased ability to deny U.S. access is a coercive message sent to both Washington and Taipei.”
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