China and the US talk turkey on climate

In the first substantial dialogue on the climate crisis between the US and China since relations were frozen in August 2022, US climate envoy John Kerry has met with his counterpart, Xie Zhenua in Beijing. In the impossible-to-ignore context of record-breaking heatwaves across the world, Kerry said of the two countries, which together produce around 40% of the world’s greenhouse gases, that these events represent “real life unfolding before our eyes as a consequence of the choices we make or don’t make”. 

It is well-documented that the Biden’s administration hopes to encourage China to curb its emissions more rapidly. Whilst Kerry acknowledged that China was doing ‘‘an incredible job’’ of building out renewable energy such as wind and solar, he also said that the ‘‘new coal coming online … undoes the benefit of that’’. For China, Xie Zhenua said that the two countries would aim to “seek common ground while shelving our differences” during the climate talks.

The ever-increasing growth of low-carbon energy solutions has led to an inevitable jump in demand for the minerals required to create batteries and photo-voltaic panels, such as cobalt and nickel. A newly-released report from the International Energy Agency highlights a 70% increase in demand for cobalt and a 40% rise for nickel now compared with 2017. The overall market for so-called energy transition minerals reached $320bn in 2022, and the IEA expects this to grow further and at pace. Reflecting this, investment in the minerals rose 20% in 2021 and 30% in 2022. 

Contrary to general concerns that supply of the minerals will not meet demand, the IEA has found that if all planned critical mineral projects worldwide are realised, there will be enough supply to support all current climate pledges. Whether there will be sufficient supply to meet the transition necessary is, of course, a different question. 

The IEA does recognise that critical challenges remain to ensuring that all supply chains for the minerals are secure and sustainable. These have been characterised as volatile and dependant on only a few countries, particularly China, for production. Other important next-step innovations include better recycling of existing batteries and PV panels – something that many auto sector companies and others are now looking to address. 

The role of investors in driving corporate behaviour change is often debated and carbon emissions is a frequently asked-for data point. But what about broader biodiversity? Research by think-tank Planet Tracker suggests that interest in biodiversity-specific data remains low from investors. 

Planet Tracker’s analysis of shareholder proposals at AGMs globally between 2010 and the end of 2022 found that only 37 that related specifically to biodiversity. Climate change risks are receiving more traction – in the period between 2018 and 2022, there were 174 proposals relating to climate change reporting, compared to 15 relating to biodiversity. ‘‘Deforestation’’ was the most frequently referenced biodiversity term, Planet Tracker found in its analysis of AGM voting data produced by Proxy Insight. While the headline numbers are perhaps disappointing, Planet Tracker says it is confident that biodiversity proposals will increase as the investment community gets its collective head around biodiversity risks and the behaviour change that should be encouraged. 

To align with its wider goal of creating a low-carbon circular economy, the EU is currently re-revising its packaging and packaging waste regulations. The latest proposal, coming after several previous attempts to take a harder line in reducing unsustainable packaging, has the potential to be transformative for the packaging sector. However, with EU parliamentary elections scheduled for June 2024, current MEPs must work hard to reach an agreement. 

Some potentially transformative policies set out in the proposed regulations include the stipulations that all packaging must be ‘‘recyclable’’ by 2030 and recycled “at scale” by 2035; that a proportion of some types of packaging must be reusable or enable refill by 2030 and 2040; and, that packaging waste should be reduced by 15% per capita by 2040, against a 2018 baseline. The proposal must go through a review and amendment process by the EU’s parliament and council. Packaging watchers hope that the immense political will behind it will push the new legislation through in its current form, despite some extremely polarised views in the parliament.