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Welcome back to the Watch Floor. I'm Sarah Adams. Today we're digging into a story from COP30. Yes, the global climate Summit. While a lot of people were saying this summit was about green pledges, you're going to learn today, it was not at all. And China was there making moves that have really surprised a lot of people on the global stage. And the crazy part is the US Wasn't there, not at a senior level. So you might ask, why are we talking about an event that occurred all the way back in November? It's because sometimes it takes a few months and real hindsight to see what exactly happened behind the scenes, who took advantage and who benefited from the circumstances. Now it's of course, in this case, China who benefited. And they benefited in very measurable ways. And we're going to talk about some of them in detail today because this does affect US Influence going forward. If you're not there and you don't have a seat at the table, someone will always come in and fill the vacuum. So as a quick overview, what's COP30? It's just the 30th running of of the United Nations Climate Change Conference, and it brought together over 200 countries. It was hosted in Brazil and It occurred from November 10th to the 21st. Now, officially, the conference was supposed to focus on emissions, renewable energy, and then the financing behind energy kind of initiatives. Unofficially, it became like this global marketplace for energy dominance. And guess who came prepared? China for a little bit of background. So you're aware China produces over 70% of the world's wind turbines and they control 80% of the world's Global solar panel market. I mean, these are huge numbers. Their companies are Longi Green Energy Technology and Trina Solar. They dominate the solar supply. And then Goldwyn is who really controls these turbines. When we talk about it now, they got to the top of the market because the state of China was involved in pushing putting them there. You know, in the US we have a lot of restrictions on how you can help private industry, but none of that exists in China. So they were able to put in real state investment into these projects. They were able to allow manufacturing at scale. They subsidized the research. Right. It can be very expensive doing the R and D behind some of this. Well, not when a government's financing and backing it. You don't take that risk on as a company. So now because they have this dominance, they really control the prices and it's very hard for other competitors to really compete with them. And this is something China's always focused on doing. No matter kind of the piece of technology. This is just one of their big wins that kind of helped put a foot in the door at the summit so then they could take advantage of other opportunities. There were a number of people who showed up to the summit and they said, hey, this wasn't like a climate summit. This was like a tech trade show. And that was not accidental.
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China's Ministry of Ecology and Environment has emphasized its commitment to active participation in global climate governance.
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We hope this conference will send a clear and positive signal that collective climate action must not stall, that the trend toward green and low carbon development is irreversible, that international cooperation is indispensable, and that multilateralism must remain firm.
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The NDCs will be revealed at this year's conference, a critical step to keep global warming within 1.5 degrees Celsius. President Xi Jinping recently announced that by 2035, China will reduce net emissions by 7 to 10% from peak levels, raise the share of non fossil energy to over 30%, as well as expand wind and solar capacity to 3,600 gigawatts.
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China, for example, came prepared to push kind of their businesses, their technology, make trade deals, sign MOUs. And while others were publicly making these speeches about our pledges to the climate, China was in the background, literally signing contracts. So I want to walk through some of these contracts. It can be a little dry, but just so you understand at least what was going on, because we always don't want to know just what the press tells us is happening. It's like, no, no, I want to know what happened in the closed room. That's where we're going to get real insights into what's happening in the world, who's taking charge, who's making impacts and who's really moving forward in this space. So one of the things China came away and had a lot of wins on again was with their solar program. And they kind of expanded their global dominance even though they were already at such a high percentage. So they secured agreements across Latin America, Africa and South Asia. They made some really big deals in Pakistan, kind of for rooftop solar. And it's because they combined it with like low cost hardware. And then of course, Chinese financing, you know what they always like to add on. You know, solar has dropped about 80% in the last decade. I mean, it used to be very, very expensive. So now a lot of countries who weren't really investing in it previously are saying, hey, so now is the time to move into this space and take advantage while the prices are so low. And China knows this, that everybody's starting to look in this affordable energy space space. And they were ready to show up with a number of different deals and packages to offer to some more developed nations like Pakistan. But then a lot of these kind of underdeveloped nations, another thing they focused on is they didn't just go there and sell hardware, they focused on software. But they played it in a really interesting way. They said, hey, let's show you how you can use our AI technology to help kind of build out and improve upon your energy grids. And this is for really underdeveloped nations who have a hard time keeping the power on. They use Malawi as a great example to show how this works. China is not like altruistic or some big humanitarian. It wants to keep power on in Malawi. They want to of course, take control of the energy system. And this gives them, as you can imagine, access to the entire power grid. If they're buying China's AI, let's say to implement and make their system work better, they're buying the software, they have to buy the tech support or obviously any like troubleshooting and continued problems. And then a project like this doesn't just take six months, this is going to go on for years. And now this actual software is the back end of their entire grid system. Right? Think of the influence involved in that. And then it's not like these countries could just pay for this out of pocket. So of course China made other deals like, we'll give you financing, you can buy our hardware and use it, you can bring in Chinese nationals to set this up. And it's just an interesting way they do this. So don't think of like energy plus AI generates more electricity. In this case it was solely used to generate influence. Another thing that China did. And then now that you take a step back, you're like, wow, that they signed a bunch of MOUs. So when you think of these MOUs, it's just kind of like this introductory discussion of hey, these are topics we might work on and partner on. And a lot of these are like newly established relationships that happened at the Summit. China signed 40 MOUs just at this summer for like those couple of weeks in Brazil. 40, that's 40. 40. Basically new relationships. I mean that is a very big number when we tell you like 200 countries came to this event. So the way they started is very simply like first off, they might just go in and help you with one thing. A really great example that came out of the conference was with Tanzania. So they worked on a project with Tanzania and it's kind of like clean cook stoves and it's really sold as, hey, if you give these stoves to families in these poor rural areas, there'll be less emissions. It sounds really great, but it just helps China get their foot in the door. Some of these MOUs included environmental training. You're getting environmental training from China, technology transfers to help you get into this renewable energy energy space as a country. And then different project implementation support. And this occurred across Africa. Some of these deals were in Latin America. And MOUs don't make any sort of headlines. But what you need to understand is they then move on and they really do become future projects and financing and technology exchanges. And they move from MOUs to official contracts to long term deals, long term agreements and of course long term partnerships. And then what China wants most, reliance. You now are reliant on China for these things. In these projects you advance from the MOU from. I mean it's a very smart way they do business. Another thing is we saw a lot of bilateral talk. There's like China and Brazil and several African nations and they were focus on joint renewable development and then the green energy supply chain coordination. This is really smart. So if you have a supply chain, a lot of things matter, right? We want things to move quickly, cheaply. This needs to be efficient. If we're working on renewable energy and the supply chain's all hunkered down, that's a problem. And so China's like, oh, we can help you fix these things. So essentially a lot of these people from these supply chains get the materials from China. So China is a vendor in most cases. Well, here China said let's make these deals where they now are a partner in helping you make these supply chains more efficient. You get the supplies cheaper, you get them faster. I mean, it's a very smart way they did this. Lastly, when it comes to these deals, what China always does and they're famous for is they offer financing. We brought it up a little bit previously, but it is a huge chunk of everyone in these deals because obviously these developing nations, if they work with China on this financing piece, they can start these projects in the next month or two if they actually had to finance themselves. These are long term projects. They're going to start five years from now. Well, when you're a developing nation or even kind of a weaker state and you can get a project kicked off quickly and you can show wins to your people, that's a huge win and that is a sell. And that is something China understands and knows and really takes advantage of. So in this case, a lot of support came from the Asian Infrastructure Investment bank and then some Chinese backed lenders. And so basically they were offering low interest financing as long as you use like Chinese equipment, some Chinese contractors and labor. And it really offers this powerful incentive system that is hard if you're a nationwide without a lot of funds that you really are going to have another option. And again, the US Wasn't even there to be a partner that could offer you a different financing model where you might be able to afford something like this. The fact that the US Wasn't at the table, so there wasn't anyone from the White House, the Secretary of State wasn't there, the Vice President wasn't there, our climate envoy wasn't there. Really the most senior person, if you just said like an American kind of power broker, was Gavin Newsom. He has no power right now to broker any real deals. Obviously with the US Government. He could broker deals of course with the state of California, which he was trying to do. But we had a real missed opportunity because as China started engaging with these people and offering these deals, we weren't there to first off see who they're engaging with, offer different alternatives, undercut China. Right. We're supposed to be competing with them economically and we're not even in the room while they're having these discussions. We're not even a thought because these countries went to this conference and they were given these kind of different diplomats or envoys or scientists. They were given approvals from their Governments, you can make deals on X, Y and Z. You have this freedom from left to right, you know, go in, broker deals. We need to move into some of this, like cleaner energy or renewable energy, or just fix some of the issues we've been unable to solve. So they go to the summit with tons of freedom to negotiate, and then the US isn't even there to even offer them an alternative. Right. So we lost so much influence in this event because China was just there wheeling and dealing and going all in on this. Now think about it. When you're a small country and you really need to work on your renewable infrastructure, it's simple. You have to go there and make a deal. So who's present? Who's there to make a deal? Okay, now who is offering you equipment financing? Who can say, I know how to integrate this exactly into your systems? I mean, China put in all that work. So we think a lot of times these summits are just about diplomacy, happy hours at night. But the absence here really shows it created space and it created space for China to come in and undercut us. Right. This energy dominance is the future. And China just went in and made dozens of relationships that we could have had, but we didn't show up and even try to make them. I mean, this is a huge problem. If you just take a step back. We always make up all these excuses about how China performs the differently economically against us. And we hear all these excuses. My favorite excuse is we spent all these years on the war on terror and counterterrorism and we didn't focus on China and that's how they got ahead of us. Well, now you can focus on China and they're still getting ahead of us. So what is the excuse? Like, we're tired of hearing why you're not competing, because this is a clear example. No American was there to compete. And China walked away with plenty of contracts and new relationships, new openings and greater influence. When we talk about something like controlling renewable energy, it's almost like being in charge of the plumbing behind the future energy system. China's being smart. Let's get into it now. Let's control it at the ground. Even if people expand it out, if parts of the system are based on our equipment and our technology, it almost forces them, as they expand and grow, to continue that model. So China then, because of the backbone of some of these systems, they influence cost, they influence access, they influence the reliability of the system system. Right. They control how it works. I mean, they basically have control of an entire energy infrastructure for you know, whatever nation we're discussing who they made the deal with. As you become more reliant on China and you have this economic integration, it's of course political alignment, right? You're working together, you have this long term relationship. And it's an important relationship because it's of course the infrastructure of your country. I mean, it's something we forget about. But this is very smart. In China, we talk about even just how we're concerned, how they make inroads and they control companies or land that some of our infrastructure runs through, bypasses or just is in. But now think about it, when they control the infrastructure, an entire nation in a nation that we view as an ally or as a partner, we maybe want to back us in a future war. I mean, you have to think through all the long term effects of these business deals because it's not just business. So where did China strengthen their relationships the most when it comes with COP30 out of the summit in Latin America and Africa and Asia? Remember, all those relationships they strengthened were basically unchallenged in real time. Now if you go back after the fact and start to challenge them, it's like you weren't even present to begin with. You weren't even invested enough in this to begin with. And that makes you not a reliable partner. So when you're viewed not reliable, it's like it puts us at a diplomatic crossroads. I mean it's the best way to put it. And we made it very clear to you, Cop 30 was nothing to do with climate change, at least not by the big power brokers. It was about kind of the future of global energy and who's going to take the lead in it. Right? And China secured, as we told you, expanded solar supply agreements, advanced AI agreements into countries grids, they signed a number of belt and road mous, they held bilateral clean energy talks, and they backed a number of projects all around the world with Chinese state backing. Right. They own the entire project because they fund the entire project that support even the commerce behind it, but built new influences for China and the US completely missed the opportunity. So they weren't just not visibly present, they weren't able to offer competing financing or equipment or support packages. They weren't able to strengthen alliances in these emerging markets. Especially when these emerging markets for the first time are saying, hey, we think we're at a point now where we can maybe invest in renewable energy. We why would we not be the ones they want to invest in? So being absent from a summit like this isn't Just symbolic. It shifts leverage. And China swooped in and said, we are glad to take that leverage. They planned well in advance for every engagement they had there, every interaction they were going to have, they were ready to take advantage of the situation. And now we have to watch after the fact and realize everything we lost out on, you know, so what are the lessons here? Because there's plenty of lessons. First off, presence matters, then economic tools are strategic tools. If anyone's ever taught us that, it is China. And they're still doing it so successfully. Another thing is financing is influence. If you can give money to a country that doesn't have the funds, you are kind of the winner, you're the hero. You're the one who made this initiative happen for them. Another thing is technology integration is long term alignment. When you make these agreements now, the relationship has to continue, of course, to make the whole system work that you sign up to support. China kind of showed a power of scale, state coordination and diplomatic presence. Right? They were able to take all the tools and advance not just the influence of their government, but some of the power and control and even revenues of some of their most important companies, be it in the solar front, the wind turbines, AI et cetera. So moving forward, we can't be making mistakes like this. So the US really needs to start thinking when you look at the next copy like the G20, any upcoming UN meetings, hey, we need to have high level people there because it's not just what the agenda says. There are all these backroom deals happening and we have to affect them. We cannot let China come in and take advantage of all these situations. Right? We have to be a power broker. We are a power broker. And it's like we almost forget that you can't just pick and choose where America's gonn dominate. Yes, we need to also dominate in renewable energy. Another thing is we need to strengthen our own renewable manufacturing at home. I mean, China owns such large percentage of the market because they invested in it, right? They made it more lucrative for their businesses to be involved in it. So we need to think of ways to make it something that companies want to invest in here, they want to compete here. We want to cut into their global dominance. Because remember, when China is the top of this market, then we also rely on them. The more we rely on China, it puts us in a tougher situation. And we learned this during COVID when it was realized so many supply chains the US relies on comes out of China and we did not have alternatives for some things that's a very dangerous thing. Another thing is we have to think of different ways we can offer financial alternatives to these developing countries. If you want the business deals, you have to not just have the product, you have to have the solution to where they can finance the product. If you don't come to the table with that, you're never going to get those deals. China is always going to think through that piece and have it at the beginning of the deal. And remember, in all these deals that happened in the summit, China was there from the beginning. So no matter what deal we're talking about that kicked off at the summit, we're already playing catch up. And when you're playing catch up, you have to incentivize them to go with you instead of China. Lastly, we need to engage with these emerging markets early. I just told you we're playing catch up. But why are we playing catch up? You know, we have some of the smartest people in the world working on economics in this country. Like nobody said, hey, let's go take advantage of these emerging markets in renewable energy. I mean, it's a frustrating thing to just kind of watch a few failure at this scale. Now it would be different if a bunch of countries went and picked up these contracts and a lot of them are allies. In this case, China went in and China basically almost like realigned the 21st century energy order. They basically said, we're on top. You know, we're the king of the mountain. Now you got a battle to take us down. I mean, that is what's happening. It's like the kids game, but it's happening in real time and in real life. I think we showed you today. Cop 30 was not about climate. It was not really about reducing emissions. It wasn't about these pledges to save the environment. It was a deeper story about influence. And one country definitely came out on top when it comes to influence. And unfortunately it wasn't the US when every single time it should be the US Right? That is why we have you in your jobs. China showed up, the US did it. And that's why we're here in the watch for we want to show you when these mistakes get made so we don't allow them to be made. Again, thanks for tuning in.
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