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What to expect from China at the upcoming major climate summit COP26

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A commuter wears a protective mask as they wait at a traffic light during a seasonal sandstorm on April 15, 2021 in the Central Business District in Beijing, China.

Kevin Frayer | Getty Images News | Getty Images

China, the world’s largest carbon emitter, has made commitments to climate change and set ambitious targets to reach carbon neutrality by 2060. But, so far, details on how to get there have been scarce.

Like many other large countries, China missed a July 30 deadline to submit new climate pledges to the United Nations.

That may change at COP26 this year, the 26th UN Climate Change Conference of the Parties, according to Gavin Thompson, vice chairman of Wood Mackenzie Asia Pacific.

Chinese President Xi Jinping has reportedly received a personal invitation to COP26, but has not confirmed his attendance.

In a Sept. 2 blog post, Thompson outlined five things to expect from China at the upcoming summit in the Scottish city of Glasgow.

Provide a roadmap

Formally submitting China’s national climate goals before COP26, which begins on Oct. 31, is a “critical step” that Beijing now seems ready to take.

“We should expect much more on how this will be achieved, with key targets for all of China’s provinces and sectors of the economy,” Thompson wrote.

To reach its 2060 net-zero carbon emissions goal, Wood Mackenzie expects that China needs an almost “complete transformation of how energy is produced and delivered,” he added.

Demand flexibility

Despite pressure from the international community, China has insisted on charting its own course to net-zero emissions and will continue to do so, Thompson said.

Coal-fired plants in China are unlikely to be banned anytime before 2025, he predicted. The country’s five-year plan still includes support for carbon-intensive coal.

“The twin goals of energy security and economic growth will drive China’s push for flexibility in meeting targets,” he said.

Still, China has been investing in renewable and clean energy as it works toward its target for carbon dioxide emissions to peak by 2030.

Oppose carbon border tax

Pressure richer countries

China has long believed that the responsibility to reduce global emissions rests with more developed countries, Thompson said.

“You broke it, you fix it,” he wrote of Beijing’s stance, adding that their position “is not without justification.”

Pushing the blame to richer nations also has potential economic benefits for China because it dominates the supply and processing of most of the raw materials for clean technologies.

“By heaping pressure on developed nations to more urgently address climate change, both at home and through increased financial support to poorer countries, Beijing is banking on much of the economic benefits likely flowing back to China,” the WoodMac note said.

Position itself as a leader

Beijing attempted to present itself as a global leader on climate change in 2020 when the Trump administration left that position empty, Thompson wrote. Under former President Donald Trump, the U.S. withdrew from the Paris climate change agreement that was signed in 2015.

But with the Biden administration taking a “radically different approach,” China will now need to work harder to become a genuine leader.

“This should encourage bolder policies on carbon and technology, as without these, China’s reputation and global standing could be eroded by U.S. ambition,” he wrote.

The U.S. and China held talks on climate change last week, but tensions between the two sides came to the fore when Chinese Foreign Minister Wang Yi said cooperation on climate action cannot be separated from the wider relationship, Reuters reported.

U.S. climate envoy John Kerry responded by telling Chinese leaders that climate change was more important than politics.

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Elizabeth Holmes pushed faster Theranos Walgreens rollout: Testimony

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Elizabeth Holmes, CEO of Theranos, attends a panel discussion during the Clinton Global Initiative’s annual meeting in New York, September 29, 2015.

Brendan McDermid | Reuters

SAN JOSE, CALIF. – A former Theranos scientist testified Friday that Elizabeth Holmes pressured her to validate blood test results from the company’s Edison machine to speed up a rollout in Walgreens despite problems with the device’s accuracy.

Surekha Gangakhedkar, a senior scientist at Theranos for eight years who reported directly to Holmes, testified that she returned from a vacation in August 2013 and discovered that Theranos was about to launch its Edison blood-testing devices in Walgreens stores.

“I was very stressed and unhappy and concerned with the way the launch was going” Gangakhedkar said. “I was not comfortable with the plans that they had in place so I made a decision to resign and not continue working there.”

Gangakhedkar recalled meeting with Holmes in September 2013 about the issues that prompted her resignation.

“At that time she mentioned that she has promised to deliver to the customers and didn’t have much of a choice then to go ahead with the launch,” Gangakhedkar said becoming emotional on the stand.

“Ms. Holmes said she didn’t have much of a choice?” asked Robert Leach, an assistant U.S. attorney.

“Yes,” she replied.

Despite signing a non-disclosure agreement, Gangakhedkar said she printed some documents and took them home when she quit because she was “worried about the launch, I was actually scared that if things do not go well I would be blamed.”

Gangakhedkar was granted immunity from criminal charges in exchange for her testimony.

She testified that in August 2013 she didn’t think the Edison 3.0 and 3.5 were ready to be used for patient testing, adding “there were problems with getting consistent results.” However, Gangakhedkar recalled that Holmes was pressuring the team to validate the tests even though “in my opinion she was aware,” of the accuracy issues.

Holmes is fighting 12 charges of wire fraud and conspiracy to commit wire fraud, and has pleaded not guilty. In opening statements, her defense attorney told jurors that Holmes was an ambitious young woman who made mistakes but didn’t commit a crime.

Earlier in the day, Erika Cheung, a former lab associated turned whistleblower, concluded her testimony after three days on the stand. Cheung recalled that frequent quality control failures in the lab created substantial delays in test results for patients.

“We had people sleeping in their cars because it was just taking too long,” Cheung testified. “Every few days we were having to run samples over and over again.”

Cheung, who quit Theranos six months after joining as a college graduate, said she “became concerned probably a month in with the Vitamin D samples.”

Gangakhedkar’s testimony continues on Tuesday. Among the insiders the government plans to call to testify next is Daniel Edlin, a project manager who reported directly to Holmes and worked on the Walgreens partnership. Edlin was also friends with Holmes’ brother, Christian.

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After years of being ‘squeaky clean,’ the Federal Reserve is surrounded by controversy

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The Marriner S. Eccles Federal Reserve building in Washington, D.C., on Friday, Sept. 17, 2021.

Stefani Reynolds | Bloomberg | Getty Images

The Federal Reserve has a big meeting on tap next week, one that will be held under the cloud of an ethical dilemma and a policymaking committee that finds itself with fairly pronounced divisions about the path ahead.

Markets largely expect the Fed to follow the two-day session with no major decisions, but rather just the first but significant nods that the historically easy money pandemic-era accommodation is coming to an end soon if slowly.

“Tapering” will be the word of the day when the post-meeting statement is issued Wednesday, at which time individual officials also will release their forecasts on the future arc of interest rates as well as economic growth and inflation.

All of that will be set against a backdrop of controversy: News reports in recent days indicate that Fed officials have been trading stocks and bonds that could be influenced at least indirectly by their policy decisions.

At the same time, speeches over the past several weeks indicate a schism between those who say the time is now to start tightening policy and those who’d rather wait.

For the normally staid Fed, the present circumstances are unusual and could yield some interesting dynamics.

“I think it’s embarrassing for the Fed. It had such a squeaky-clean reputation,” Greg Valliere, chief U.S. policy strategist at AGF Investments, said of the trading controversy that largely involved regional Presidents Robert Kaplan of Dallas and Eric Rosengren of Boston. “But I don’t think it’s going to change policy in any regard at all. I think it will be rearview mirror pretty soon, assuming there’s no other shoe to drop.”

Valliere did note the issue will help fuel Fed critics such as Sen. Elizabeth Warren, D-Mass., who had been a vocal detractor of the Fed’s looser regulatory approach in the years since the 2008-09 financial crisis.

A matter of credibility

More than that, though, the Fed lives on its credibility, and some of the recent problems could dent that.

There’s the market credibility issue – Wall Street and investors need to believe that the Fed is at least mostly unified in its monetary policy approach to setting interest rates and associated moves that have market impact. Then there’s the public credibility – at a time when faith in Washington’s institutions has plunged, ethical missteps only add to that and can have repercussions, especially at such a delicate time.

“The ethics here look bad. They should have known better,” said Joseph LaVorgna, chief economist for the Americas at Natixis and former chief economist of the National Economic Council during the Trump administration. “Once you lose that moral authority, it’s a problem.”

Rosengren, Kaplan and any other Fed officials who traded stocks didn’t violate any laws or policies. In fact, that’s become part of the criticism leveled in some circles – that following the financial crisis the Fed didn’t do a housecleaning when it came to internal rules to make sure it avoided the kinds of conflicts that came to light during the financial crisis.

“Keep in mind, they already have [trading] rules they imposed on banks, for example, and yet the Fed’s governors don’t live by those same rules,” said Christopher Whalen, a Fed veteran and now chairman of Whalen Global Advisors. “After Dodd-Frank [the post-crisis banking reforms], every agency in Washington tightened up little conflicts like insider trading. And yet the Fed is somehow exempt from those rules? They look ridiculous.”

For its part, the Fed has noted that it is following rules for other government agencies and has supplemental rules as well.

Jerome Powell, nominee to be chairman of the Federal Reserve Board of Governors, shakes hands with US Senator Elizabeth Warren (R), Democrat of Massachusetts, prior to testifying during his confirmation hearing before the Senate Banking, Housing and Urban Affairs Committee on Capitol Hill in Washington, DC.

Saul Loeb | AFP | Getty Images

Still, a spokesman for the central bank said Thursday that Chairman Jerome Powell has directed Fed staff “to take a fresh and comprehensive look at the ethics rules around permissible financial holdings and activities by senior Fed officials,” a spokesman said.

“This review will assist in identifying ways to further tighten those rules and standards. The Board will make changes, as appropriate, and any changes will be added to the Reserve Bank Code of Conduct,” the official added.

The controversy comes against a delicate backdrop for the Fed.

The central bank is preparing to take its first steps to normalize policy again, after slashing benchmark interest rates to zero and doubling the size of its balance sheet through more than $4 trillion in bond purchases.

Fed officials are divided on policy: By Goldman Sachs’ count, six officials who have spoken publicly on the issue of tapering asset purchases are for it and six are against. On inflation, while Powell has said he expects price pressures to recede fairly soon, at least six Fed officials, including Governor Christopher Waller, have said they expect inflation to remain above the central bank’s 2% target beyond 2021.

One more complication thrown into the mix is that Powell’s term is set to expire in February, and President Joe Biden is expected to announce soon his preferred choice to lead the bank ahead. Most on Wall Street expect Powell to be nominated again, but there’s growing sentiment that Biden will move out Randal Quarles as vice chairman in charge of bank supervision and replace him with Governor Lael Brainard, who likely would use a heavier hand in bank regulation.

Amid all those pressures, Powell will have to make sure the Fed gets policy right and is able to clear away some of the contentiousness of late.

“It’s not a fait accompli that Jerome Powell is reappointed,” said LaVorgna, the Natixis economist. “The administration is understandably going to wait and see how the Fed handles the taper and what the markets do. That could be the determining factor in whether he’s reappointed.”

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California crews wrap trees fireproof blankets

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This photo provided by the Southern Area Blue Incident Management Team on Thursday, Sept. 17, 2021, shows the giant sequoia known as the General Sherman Tree with its base wrapped in a fire-resistant blanket to protect it from the intense heat of approaching wildfires at Sequoia National Forest in California.

Southern Area Blue Incident Management Team via AP

California firefighters are wrapping fireproof aluminum blankets around the bases of several giant trees in Sequoia National Park, including the 275-foot General Sherman, the largest tree in the world, to protect them from the rapidly worsening KNP Complex Fire.

The park shut down earlier this week after the fire, sparked by lightning strikes, began to burn through steep canyons. The western U.S. has suffered several large fires this season, including the Dixie Fire, California’s second-largest ever, and scientists and firefighters say climate change is extending the fire season and helping those fires burn faster and hotter than in previous decades.

“Crews are preparing the Giant Forest before the fire reaches that area, by removing fuel and applying structure wrap on some of the iconic monarch sequoias that characterize the most famous area of Sequoia National Park,” the National Park Service said in a statement. “The fire continues to grow in all directions.”

Crews also used fireproof wrapping to cover the Ash Mountain Entrance, the park’s entrance sign that invites travelers into Sequoia National and is carved out of blocks of sequoia wood.

Firefighters cover a sign at Sequoia National Park, California, U.S., in this picture obtained by Reuters on September 17, 2021.

Sequoia and Kings Canyon National | via Reuters

Crews are also prepping to conduct burnout operations in areas at risk. Prescribed burns involve igniting ground fires that reduce the amount of fuel available near the area in order to protect the land from larger, less-controlled blazes.

The KNP Complex had burned 11,365 acres and was zero percent contained as of Friday, according to the federal InciWeb incident information system. At least 28 fires have ignited in California and 129 across other western states since June, according to data from Inciweb.

While California’s endangered giant trees are adapted to withstand wildfires, record heat and drought are threatening the sequoia population.  

Last year, the Castle fire scorched Sequoia National Park and destroyed at least one-tenth of the world’s sequoia trees, according to a draft report by scientists with the National Park Service.

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