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Air conditioning and climate change: Start-ups trying to help

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This June was the hottest in American history. The 116-degree heat melted power cables in Portland, Oregon, and smashed previous temperature records. Seattle recorded an all-time high of 108 degrees, as did the Canadian province of British Columbia, at a whopping 121 degrees.

As the world warms, more people are installing air conditioning. Global energy demand for cooling has more than tripled since 1990 and could more than double between now and 2040 without stricter efficiency standards.

But air conditioning itself is a major contributor to global warming. Altogether, building operations that include heating, cooling and lighting account for 28% of the world’s total greenhouse gas emissions. That’s more than the entire global transportation sector.

But SkyCool, Gradient and a number of other companies are working on the problem. They’re trying to apply new technologies to the traditionally inflexible heating and cooling industry, finance the upfront costs, communicate the value to property owners and make sure it’s all done equitably. 

Watch the video to learn more.

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What the energy crisis means for Europe’s green ambitions

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A woman on the bicycle rides pass the power station in Neurath, Germany.

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LONDON — The European Union could struggle to advance its green agenda as gas prices soar across the bloc, according to experts who warn against slowing down investment into the sector.

The European Commission, the executive arm of the EU, has vowed to become carbon neutral by 2050, presenting a concrete plan to reduce greenhouse gas emissions by at least 55% from 1990 levels by the end of this decade.

However, these ambitions could be hit as a natural gas shortage on the continent drives prices higher. The front-month gas price at the Dutch TTF hub, a European benchmark, has risen more than 250% since the start of the year. It traded at about 74 euros ($87) a megawatt-hour on Tuesday — just shy of its record high of 79 euros it hit last week.

You can’t stop financing windmills for people’s bills.

Jacob Kirkegaard

senior fellow, German Marshall Fund of the United States

The recent spike is already having a tangible impact. Spain, for instance, has announced emergency measures to limit the profits that energy companies can make from gas alternatives, including renewables. The government is also hoping to cap what consumers are paying for their electricity.

“Soaring energy prices have hit economies across Europe, and if Madrid’s actions are imitated elsewhere as governments prioritize cheap energy over the green transition, the EU’s credibility in advancing global climate action could take a hit,” Henning Gloystein, director of energy at the consultancy firm Eurasia Group, said in a note Friday.

Spain is not the only country to cap energy price increases, with France and Greece making similar moves. But the plan in Spain has been the subject of some criticism.

Iberdrola, a Spanish energy firm with a focus on renewables, said the move “would undermine investor confidence in the country” at a time when the nation needs private money to achieve its climate ambitions.

Had we had the green deal five years earlier, we would not be in this position.

Frans Timmermans

EU Climate Chief

“The risk to climate policymaking lies perhaps mostly in a loss of credibility ahead of the global COP26 climate talks in Glasgow later this year,” Gloystein told CNBC via email.

“If wealthy countries in the EU are seen subsidizing energy for households that is in part supplied by fossil fuels, then the EU can hardly tell poorer countries to stop subsidizing household fuel consumption supplied by fossil fuels,” Gloystein added.

Meanwhile, Jacob Kirkegaard, senior fellow at the German Marshall Fund of the United States think tank, said he is not overly worried at this point, but that the ongoing energy crisis “makes it even more important that the Spanish government finds other sources of financing.”

“You can’t stop financing windmills for people’s bills,” he said, adding that countries should not ease their investments in greener energies.

The EU’s fault?

There is a wider problem, however: Some European leaders and lawmakers have blamed the EU for the energy price increases.

Polish Prime Minister Mateusz Morawiecki, for instance, said earlier this month that “Polish power prices are tied to the EU’s climate policies,” according to Politico.

When asked if comments like these could hurt the EU’s green ambitions, Kirkegaard said: “There’s absolutely that risk because clearly the Polish government want to extract more money from the EU for the green transition.”

Vapor rises from the cooling towers of the Turow coal powered power plant, operated by PGE SA, in Bogatynia, Poland.

Bloomberg | Bloomberg | Getty Images

Poland said Monday that it will keep a coal mine running, even though the European Court of Justice ruled it should be shut down. Under the same ruling, Krakow has to pay a 500,000 euro fine for every day that it keeps the mine open.

The EU’s climate chief, Frans Timmermans, has insisted that the price increases are not the bloc’s fault. “Only about a fifth of the price increase can be attributed to CO2 prices rising,” he told the European Parliament earlier this month. “The others are simply about shortages in the market.”

“Had we had the green deal five years earlier, we would not be in this position because then we would have less dependency on fossil fuels and natural gas,” he added.

‘Fair green transition’

Kirkegaard said that “it is too early to tell” if the price rises are going to jeopardize the EU’s green ambitions. The biggest risk, in his opinion, is whether public support for a greener economy falls because it is perceived to be impacting on their bills.

The European Commission announced earlier this summer that there would be special funds allocated to support the most vulnerable parts of the population in this green transition. The question is whether that will suffice.

“This must be a fair green transition. This is why we proposed a new Social Climate Fund to tackle the energy poverty that already 34 million Europeans suffer from,” Ursula von der Leyen, president of the commission said at a speech last week.

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India slams UK’s new travel rules as ‘discriminatory,’ warns of retaliation

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Travelers at Indira Gandhi International Airport in New Delhi, India, on Tuesday, Aug. 24, 2021.

T. Narayan | Bloomberg | Getty Images

India slammed the U.K.’s decision to exclude vaccinated Indian travelers from its new travel guidelines, calling it “discriminatory” and warning of reciprocal measures.

The British government will next month allow fully vaccinated travelers from a list of countries to skip quarantine upon arrival — but Indians who are fully vaccinated will still need to be quarantined.

The U.K. last week eased travel restrictions for fully vaccinated individuals from 17 countries and territories, including Japan and Singapore, saying they would not have to stay in quarantine for 10 days after arriving in England.

From Oct. 4, travelers from those destinations would have to show that they received a full course of one of the Covid vaccines currently approved in the U.K., at least two weeks prior to their arrival. The approved vaccines are: Oxford/AstraZeneca, Pfizer-BioNTech, Moderna or Janssen.

India’s main vaccine is the one from Oxford University and British-Swedish pharma giant AstraZeneca — but it is manufactured locally by the Serum Institute of India under the name Covishield. It has been approved for emergency use by the World Health Organization.

If we don’t get satisfaction, we would be within our rights to impose reciprocal measures.

Harsh V Shringla

India’s foreign secretary

“The basic issue is that here is a vaccine, Covishield, which is a licensed product of a U.K. company, manufactured in India,” India’s Foreign Secretary Harsh V Shringla said Tuesday at a press briefing. “We have supplied 5 million doses to the U.K., at the request of the government of the U.K. We understand that this has been used in their national health system.”

“Therefore, non-recognition of Covishield is a discriminatory policy and does impact on those of our citizens traveling to the U.K.,” he added.

Under the new rules, Indian travelers will be required to quarantine after arriving in England and must undergo three rounds of testing, regardless of their vaccination status. Many Indian nationals typically travel to the U.K. for work, study, leisure travel or to visit family.

India’s External Affairs Minister Subrahmanyam Jaishankar, who is in New York for the United Nations General Assembly, raised the issue “strongly” with U.K. Foreign Secretary Elizabeth Truss, according to Shringla.

“I am told that certain assurances have been given that this issue would be resolved,” he said.

Jaishankar tweeted that during his meeting with Truss in New York, he “urged early resolution of quarantine issue in mutual interest.”

Indian opposition lawmaker Shashi Tharoor said he pulled out of a debate engagement at the University of Cambridge due to the quarantine order.

“It is offensive to ask fully vaccinated Indians to quarantine, he said.

Another lawmaker, Jairam Ramesh, said the decision “smacks of racism.”

“We will have to see how it goes, but if we don’t get satisfaction, we would be within our rights to impose reciprocal measures,” Shringla added, without elaborating what some of those measures could be.

Government data showed India has so far administered more than 825 million vaccine doses in one of the world’s largest inoculation drives — roughly 15% of the country’s eligible population has received the two doses required to be considered fully vaccinated, according to online publication Our World In Data.

The country’s home-made vaccine from Bharat Biotech, called Covaxin, has yet to be approved by the World Health Organization. It will likely to further complicate international travel plans for many Indian nationals.



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Evergrande crisis to hurt China economy: Li Daokui, ex-PBOC advisor

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Evergrande‘s debt crisis will slow down China’s economic growth, but will likely have minimal spillover on the country’s financial system, according to a former advisor to China’s central bank.

Evergrande is the world’s most indebted property developer with total liabilities of around $300 billion. The company has been struggling to pay its suppliers and warned investors it could default on its debts, with one key payment due as soon as this week.

“The impact is on the real economy because with the default of Evergrande, there’ll be [a] slowdown in developments of many projects,” Li Daokui, formerly an advisor to the People’s Bank of China, told CNBC “Squawk Box Asia” on Wednesday.

“So the real property market will have an impact on the GDP growth rate for the coming year because of slower finance for the whole sector,” said Li, now a professor at Tsinghua University’s School of Economics and Management.  

He added that a default by Evergrande will have minimal effect on the Chinese financial system because there aren’t derivative instruments built on the company’s debt.

Derivatives are complex financial securities that derive value from an underlying asset, such as stocks and bonds. Traders use derivatives for various purposes including hedging a position and speculating on the underlying asset.

The Evergrande as we understand may not exist.

Li Daokui

former advisor to the People’s Bank of China

“I think it’s a bit too early to predict what’s the net impact [of the crisis]. I would say right now, by my rough calculation, 1 basis point on GDP growth … if the thing is under control from now,” said Li.  

The Asian Development Bank said Wednesday that it has maintained its growth forecasts for China at 8.1% for 2021 and 5.5% for 2022. That would be an improvement from the 2.3% expansion last year, when China became the only major economy to grow while most global economies were hit hard by the Covid-19 pandemic.  

Read more about China from CNBC Pro

Will Evergrande be dissolved?

Defaults by Evergrande will likely slow down the progress of development projects around China, which will hit local economies in mainland China, said Li.

That could prompt local and provincial governments to step in with their own money to keep those projects going, the economist said.

Li also said he expects China’s central bank to add liquidity in targeted sectors to make sure the spillover from an Evergrande default “will not travel too far too quickly.”

Li predicted that in the medium- to long-term, the embattled company will likely be “dissolved” into four main groups: property development, finance, electric vehicles, and other commercial ventures.

“Each of these four sub-parts of Evergrande will be sold to individual companies or even to some local governments,” said Li. “The Evergrande as we understand may not exist.”

— CNBC’s Weizhen Tan contributed to this report.

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