UN Biodiversity Conference, Russian Oil Sanctions, China’s COVID Protests, and More

MCMAHON:

In the coming week, the UN holds its 15th Biodiversity Conference. Western allies move to tighten restrictions on Russian oil. And, China grapples with protest against its zero-COVID policy. It's December 1, 2022 and time for The World Next Week. I'm Bob McMahon.

LINDSAY:

And I'm Jim Lindsay. Bob, next Wednesday world leaders will convene in Montreal, Canada for the UN Biodiversity Conference, also known as COP15. This is the second phase of the conference, and it will focus on the finalization and adoption of a post-2020 global biodiversity framework. Coming on the heels of the COP27 Climate Summit, what makes COP15 different?

MCMAHON:

Well, Jim, it's in many ways the other half of the global conferences dealing with epic environmental crisis as we know it or as we fear it. The two are very much intertwined, actually. It wasn't completely by design that they take place in the way they are. We should note China was supposed to host this conference and had to beg off because of its COVID restrictions, which we'll get to a little bit later. But while the COP27 in Egypt was about primarily climate change and how to deal with cutting back on the emissions that are causing heat-trapping gases and lowering global temperature increases and also helping countries to cope with those changes caused by that, this is about a broader sense of the biosphere, the functioning of the biosphere and how the land, air, water altogether are going to be able to support life on the planet, not just human life, animal life, plant life, insects and so forth, and making pledges to stop the ravages that have taken place.

There's all sorts of information. It'll be distressingly familiar to the information we heard about what's happened on climate, Jim, if we looked at what's happened to the biosphere, the loss of species, the introduction of invasive species, overfishing, overharvesting of timber and so forth. These countries are going to be actually, in some ways, have a stricter requirement here. There was a lot of dithering going up to the end of the COP27 in Egypt about whether or not they would agree to some statement, a closing statement, pledging at least to finance countries that needed to react to climate change. This one's about really establishing a framework that will work for less than 10 years and get the planet on a basis for reducing damage to the biosphere, Jim.

LINDSAY:

Bob, do we have a sense of what specific steps are going to be taken to address these problems? Let's just take one issue, which is the warming of the oceans, which is leading to fish moving to different places than they normally have. Obviously, for people who depend upon fish for protein, for food, that's an enormous problem. But also, the problem that for some species the water will get too warm and they will disappear.

MCMAHON:

Yeah, you're touching on a particularly challenging aspect of this, which is the moving target. So say you do set aside, if you're a maritime nation or a nation with a large maritime presence and you set aside part of ocean, and those oceans are warming and the species leave, it's then sort of not your problem. So part of this is that there's an emphasis on saying, "Look, this is a global problem, that countries need to sign up." And I should note that these are countries that are parties to the UN Convention on Biological Diversity. It's almost a universal treaty. I should note United States is not a party to it, although the United States has made some pledges of recent that are somewhat consistent with the goals. But these are countries saying the world needs to conserve at least 30 percent of land and oceans by 2030.

So individual countries are pledging to do that, but the world needs to be preserving almost a third of its land and oceans to stop what has been a really rapid depletion of species, of the environment, and so forth, Jim. And it's taking stock of the fact that climate change has already introduced at a faster pace than expected.

Some countries are going to have disproportionate burdens. And then we're going to get into another familiar refrain that we heard in Egypt, Jim, which is, how are we going to pay for this? How are poorer countries, let's say the DRC, vast country, enormous country, straddles Central Africa, incredibly poor, politically dysfunctional in most times. How are they going to deal with preserving their massive rainforest that are still the host to incredible biodiversity, really important resources, and also resources that the country could use to survive? How is that going to be affected? So I think you're going to see as we come to the run up of this, this is conference in some ways that also is similar to COP27 in that it's a long conference. It's going to be, I think almost a fortnight.

LINDSAY:

A lot of speeches.

MCMAHON:

A lot of speeches and a lot of big statements using big language that you might fall on deaf ears. But I think if they get down to the basics here, it will connect with a lot of people because just like climate has affected the entire planet, everybody has a climate story these days. Many countries have an environmental story. And so it's really about, can they come with a firm agreement to a new framework with a strict deadline 2030, "30x30"? It's a catchy slogan. It's maybe something that the climate summit wishes it had.

I would just note though that I think there's a concern that people are kind of saturated right now. People meaning publics, meaning some government leaders saturated by the commitment. The commitments are already laid out in the Climate COP27 and then coming into this now, it's going to be a bit tough to handle. I think it did get affected by the fact that China's not hosting anymore. China is seen by some observers as maybe not playing the role they had envisioned playing in this, was not inviting world leaders, environment ministers. That sends a message. You will have the Canadian Premier Trudeau at the summit. Maybe he will try to present a rallying force, Jim, but it's not clear whether they're going to come up with this framework that everybody sees, certainly every expert sees as necessary.

LINDSAY:

Bob, your point about the unequal burden I think is quite significant. One of the important things to note about climate change is that the countries who did the least to contribute to the problem are going to be the hardest hit and are the least capable of adjusting. But beyond the issue of who bears the burden, there's also the question of who has the responsibility and the responsibility to respond varies across countries because in many cases we're talking about what individual countries do within the borders.

The classic example would be Brazil with the Amazon rainforest, which many scientists fear is now reaching a tipping point where it's going to lose its resilience, it is going to collapse. And again, the Amazon rainforest functions essentially as lungs for the planet. And if we have them deeply damaged, it has big ripple effects across the world. But Brazil, under leadership of President Bolsonaro basically said, "This is a matter of sovereignty. We'll do with the Amazon what we want." Likewise, you have countries that operate very big fishing fleets that are essentially strip mining the seas and that intersects with the warming of the oceans. So a lot of this still comes down to choices by individual countries to preserve biodiversity. But many of them are not inclined to do so because they insist they have sovereign rights to do as they wish.

MCMAHON:

You're absolutely right, Jim. It's a crucial issue and it really is going to have to require a sea change and a real cognizance that this is something that is going to really need to focus attentions on changing tact. Brazil's an excellent example. The Bolsonaro government was voted out of office. We'll have January 1st, the Lula administration coming back. It should be noted Lula and his supporters were out in force at the COP27 basically saying, "Brazil is back. Brazil is going to play a role in responsible stewardship." We'll see how far and how fast they're able to go on that.

But Brazil playing this crucial role because of the massive amount of the Amazon that resides within its borders and that tipping point aspect is a real illustration of that intersection of here you have a biosphere that's playing a role in climate, that is a carbon sink, that is allowing there to be replenishment of resources of tree cover and of water and so forth. And by depleting that, it has this incredible knock on effect that goes way beyond Brazil's border. So it's ending the year on a note that could be incredibly sour, Jim, or potentially a little bit hopeful.

LINDSAY:

Well, let's be hopeful.

MCMAHON:

Well, Jim, I want to take us to another state on state issue that's creating a lot of tensions, and that is energy. As we approach the winter in the northern hemisphere, especially in Europe, we have several energy restrictions expected to take effect. The EU and the G7 are planning to make cuts to their reliance on Russian oil in response to Russia's continued war in Ukraine. At this point, Jim, will these measures make much of a difference?

LINDSAY:

Well, that's one of the hotly debated issues, Bob, and the question is, what impact will it have in Russia, but also what impact will these decisions have on global oil markets and the global economy? Let me note that there are really three significant things happening next week. The first is that the European Union is introducing a partial embargo on Russian oil. The second thing is that the G7 countries are placing a cap on the price they will pay for Russian oil. That's designed to try to limit the amount of money that Moscow makes off of the basically boom in oil prices since it invaded Ukraine. The third is that OPEC and OPEC+ are holding a ministerial meeting in Vienna to talk about their levels of production. But let's go through each of them.

The first issue, the European Union embargo back in June, the EU agreed to ban seaborne imports of Russian oil. That is oil coming in on tankers as opposed through pipelines. And it's set to go into effect on December 5th. Now, despite the impending ban, Russia still provides about 20 percent of the EU's seaborne oil imports. This is crude oil. As you can imagine, if that goes away, that really has a tendency to tighten the market and dry prices up. And again, economists, people in the energy markets are debating how significant the impact will be. Because to some extent, oil is a fungible product. You can just move it around. So a lot of Russian oil that previously went to Europe is now going to Asia. And conversely, oil that previously would've gone to Asia is now being redirected toward Europe. There's some speculation if we follow this issue closely that the real pain point will come in February when a rule is supposed to go in effect limiting the entrance of refined oil products into Europe and that they argue will have a bigger impact and economic squeeze in Europe.

Now, specifically on the G7's cap on Russian oil prices, they agreed to do this back in September. Once again, goes into effect on December 5th. The idea is you're going to cap imports of Russian oil, it's $65 per capita. Again, the idea is make sure that Russia doesn't benefit from the consequences of the war that it began. Now, the conventional wisdom is that this isn't going to have a very large immediate impact either on Russia or global oil prices. Indeed, right now, many Asian countries, India and China come to mind are already buying Russian oil essentially at a steep discount to global oil prices. Now, Russia has threatened to retaliate against any country that tries to enforce this ban. We'll see how that will go. I think some of the details of how this will operate in practice are still being worked out. Now, this is one issue in which the old saying, "The devil is in the detail," really applies because there are all kinds of exemptions and loopholes and what have you.

The third big development, the OPEC and OPEC+ ministerial meeting is significant because the question has been, will they decide to increase production? You might recall back in October they announced a significant cut in oil production that incensed the Biden White House, which thought that the move was designed to interfere in the U.S. congressional midterm elections. The Saudis who really championed the oil production cut said that wasn't the case. It was simply based on market demands because they're trying to keep oil prices at a certain level because they need the revenue to run their country. There had been some talk that OPEC+ was now willing to add a little bit more production because they were concerned about oil prices getting too high. But given recent developments, particularly in China with the COVID lockdown, fears have resumed that we're going to see Chinese demand, the Chinese economy slow down, and that means the global economy will slow down, which means oil prices will fall, which means now is not the time to put more oil on the market.

MCMAHON:

Jim, you've laid out a very interesting set of steps and circumstances. I think I'm going to need a scorecard to see how the week progresses, but I can't help but note first that we've just discussed threats to the biosphere, especially posed by fossil fuels and here we are talking about global crises. It's certainly a European one on the verge of a crisis because of fossil fuel dependency, which is not going anywhere anytime soon. So it's just a reality check on that front. It's also stunning to hear that there's still 20 percent of Russian oil coming into European markets nine months after the invasion of Ukraine. It just, again, points to the fact that the intertwining of energy really knows no bounds.

LINDSAY:

Just to be clear, it's not 20 percent of Russian oil.

MCMAHON:

20 percent oil of shipborne.

LINDSAY:

Well, it's 20 percent of the oil that Europe receives via tankers that comes from Russia.

MCMAHON:

I'm wondering, and you mentioned the threats of reprisal, we heard previous threats after previous European pledges to do this then followed by a murky explosion of a Nord Stream pipeline in the North Sea. It makes one wonder what is in the playbook of the Kremlin after next week's events play out, but I guess we'll have to wait on that

LINDSAY:

Because again, there are a range of ways that Russians can retaliate including cyber attacks, physical attacks, political interference and the like.

MCMAHON:

The other thing I would note is it seems like the state visit that's taking place as we went to tape this podcast, Jim, is happening at a propitious moment. This is the French President Macron and President Biden. Tonight, Thursday night will be the big state dinner. They have a lot on their plate, but certainly European energy is a big one. Do you see any meeting of the minds coming out that that might be important?

LINDSAY:

I don't know if we're going to get a meeting of the minds, Bob. I do think it's important to flag that there is some growing resentment in Europe over the burden they're bearing because of the consequences of the war in Ukraine. You're starting to see some leading Europeans complain that in their view the United States is actually profiting off the war in two ways. One is by selling a lot of weapons. That is, American companies are producing weapons used in Ukraine. You're also seeing the argument that the rise in the price of oil is benefiting big American oil companies. I should say that's also a complaint you hear from some people here in the United States.

But again, the challenge of trying to address these issues is very, very difficult. We're about to head into winter and Europe is facing a winter in which its energy supplies are not as secure as Europeans want it to be. And one of the great fears is that you could have an epically cold winter as we had an epically hot summer because climate change has come and that could put tremendous pressure on European governments as they're unable to deliver what their publics expect. And that could tear at the fabric of the Western alliance in the coordinated cohesive front being presented to Russia.

MCMAHON:

Just to put a figure onto that concern, Jim, I heard from the Economist group about estimates for excess deaths in Europe caused by excessive cold and it's something along the lines of 200,000. So this gets to the point of people saying Putin has weaponized winter.

LINDSAY:

He certainly has, and it's clear that the Kremlin is banking on winter to test and hopefully, in their view, bring about concessions from the West.

MCMAHON:

So all eyes on Europe next week.

LINDSAY:

I think next week and for the next several months. Bob, let's pivot to China. This past week widespread student-led protests erupted across China against the Chinese Communist Party's zero-COVID Policy. What was interesting about these protests is we started to hear demands that President Xi resigned. What do we think is happening on the ground, Bob?

MCMAHON:

It is extraordinary, Jim, and it's both important not to exaggerate, but also not to underestimate the impact of these because I think most close China watchers are saying with a bit of conviction that these are certainly the biggest anti-government protests since Tiananmen Square protests of '89. On top of it, you had an interesting unexpected development, which was the death of the former Chinese leader, Jiang Zemin, who came into office right after Tiananmen Square crack down and was basically the person who shepherded the country through both controlling of social unrest as well as an opening of its economy and in some ways emerging as a pragmatic figure. And I say that because many people have drawn connections between the death of another senior Chinese official before Tiananmen Square Hu Yaobang they saw that as a triggering event. Not so clear this will be a triggering event, but it certainly is raising interesting notions about how Chinese are viewing their leadership and how they're viewing the stability of their leadership.

Just in October was this extraordinary Party Congress in which Xi Jinping was anointed almost absolute powers in the country. It was quite a show and yet there is a lot of concern that the country has boxed itself in on its zero-COVID policy. We mentioned in previous podcast, Jim, why it felt like it had to go in that direction, very low vaccination rate, and the lack of capacity to deal with a massive COVID outbreak. But we've now seen after these protests and the concerns that they've raised, a couple things going on, some crackdown definitely happening, massive police forces. As the government has regrouped a little bit, it has sent its police forces in to see cellphones and what are called VPNs and networks that people use to transmit information and images and so forth to just do the typical information crackdown. But it's also, its top official for COVID-19 said the country is entering a, what he called a new stage of its pandemic response. And while control measures will continue, there seems to be some easing.

For example, not so much emphasis on big quarantine centers, but more like people can quarantine at home. It doesn't sound like a big deal to people in the West who are kvetching about being home for a couple of weeks in the height of the pandemic, but it's a big change for China. Also, some inkling that they might be expanding vaccinations a little bit. That's also going to require though I think some reckoning with the more potent vaccines that are the so-called mRNA vaccines, Jim. And so I think it's going to be worth watching China.

We just had a visit of the European Council President Charles Michel. He visited Xi Jinping. Not completely clear what they spoke about. They did talk about COVID-19 responses as well as things like Ukraine and climate change and Taiwan. But it'll be interesting to see if we start to see something happening on that front in terms of European resources being brought in to assist China, potentially. A bunch of intriguing things are going on and I still think it might be too early to say writing's on the wall for the Xi Jinping leadership at this point.

LINDSAY:

Oh, I think you're right Bob. I think it is way too early to start writing Xi Jinping's political obituary. I don't think we should underestimate the power of the Chinese surveillance state or the willingness of the leadership of the Chinese Communist Party to crack down on people they believe are threatening their rule. Indeed one of the reasons Xi was made general party secretary was a concern that there had been too much freedom, too much liberty developing. And his job was to do was to reassert the control of the Chinese Communist Party. Because at the end of the day, Xi Jinping is not a CEO, trying to maximize profits, trying to maximize output. He's the general secretary of the Chinese Communist Party and his job is to make sure party control trumps over everything. And his belief is that he can both increase control over the economy and society and maintain the country's vibrancy and innovation.

We'll see if that happens. But again, their choices on COVID policy were initially very successful, but now have put them essentially in a box, a cul-de-sac, a boxed canyon if you want, in which trying to open up society leads to eruptions of COVID, which then required them to crack down precisely because they don't have the vaccines and they have a population that is as epidemiologists like to say, naive in terms of the virus. They're very susceptible to it and it's hard to get that way out. I think a lot of the calculations, they're hoping they can develop their own mRNA vaccine, they have one under development, clearly is a sign of Chinese nationalism. They're not looking to buy the Pfizer vaccine or the Moderna vaccine, which would seem to be the easiest way to ease things up. But there's an element of self-sufficiency and national pride that is operating here.

And I think you're going to see loosening of conditions and then tightening of them. But they also have a problem because Chinese people do get to see a little bit about the outside world and what they're seeing, especially as they watch the World Cup, is that a lot of people in a lot of places are leading what looks to be ordinary lives, whereas they're dealing with COVID in a way that's requiring shutdowns and a wholesale disruption of their lives.

MCMAHON:

That's a great point, that example as well as the aspect of access to information, because I did see a report that it seems to have been confirmed that Chinese state transmissions of the World Cup had switched to showing just focusing on the players and not crowd reactions because the crowds were not wearing masks, indicating, "Oh, the rest of the world might be getting on with life, while we here are enduring sustained lockdowns."

The other thing that's interesting I thought from the latest spate of protest, which was the triggering event, it seems to have been this fire broke out in a building in Urumqi, the capital of Xinjiang, heavily repressed, heavily locked down area, and the building itself was locked down to such a degree that rescue people could not get there in time to help those...audible screams were heard from the building and that information got out and it got out and it outraged Chinese and it outraged Chinese in other parts of the country.

It's very interesting how that got transmitted and how much it was believed and there wasn't an effort to kind of put it back into the box, so to speak. And so it does show that even with all the controls in place, and China has mastered this in a way no other country has so far, Jim, that this kind of information can get out. And I think it's going to be then a test of the, as you indicated, of the regime that whether it can sequence some path out that involves vaccination and opening up and sustaining some amount of spread of COVID. Because that's been one of the things that Xi has not allowed. He does not want to admit it, he does not want to allow it, and I think it's got to be some little bit of pragmatism there or the country's going to be in a really bad shape.

LINDSAY:

Well, certainly they're trying to find some way to get out of the situation they have put themselves in. And I think you're right, it's important to recognize that as powerful as the Chinese surveillance state might be, the Chinese people are also very innovative and can find ways to get around that surveillance. I think one of the things to focus on is to what extent does this public unrest and this willingness to go around the surveillance system to vent anger gets tied to or fueled by any economic slowdown linked to COVID.

Again, once you are in a situation in which you have to clamp down on your economy, on cities, you disrupt the economy. And again, the big selling point of the Chinese Communist Party for a couple of decades has been we are delivering growth, we are raising the Chinese people up. If that comes into question then I think Xi will have even bigger political problems.

MCMAHON:

And I would just note two pieces by our colleagues here that were published in Foreign Affairs. One in October from Yanzhong Huang called "Can Xi Jinping Reopen China?" And another one that just went out this week by Ian Johnson called "Xi Versus the Street." Both give a lot of interesting context on what to expect and what to look for.

LINDSAY:

Yeah, I think the most likely outcome if Xi faces trouble, is not that the Chinese Communist Party gets overthrown, but that you see a reshuffling at the upper echelons of the Chinese Communist Party.

MCMAHON:

Yeah, that would be consistent with how they try to handle things. Jim, I think it's time to pivot and discuss our audience figure of the week, which listeners can vote on every Tuesday and Wednesday at cfr_org's Instagram story, and I think we're going to stay in the region with the audience selection this week, Jim, which is Taiwan's President Tsai Ing-wen quits as party chair. Why is that important, Jim?

LINDSAY:

Because it raises significant questions about the direction of Taiwan, Bob. I should note that President Tsai resigned as head of the ruling Democratic Progressive Party after the party feared poorly in local elections held over the weekend. I want to stress, she remains the president of the self-ruled island.

The critical point here is that going into these local elections, Tsai framed the election as a vote for democracy and for standing up to China. But Taiwanese voters turned out for the Kuomintang, or KMT, which is seen as being more dovish, if I can use that phrase, in dealing with China. The KMT's counter argument was that Tsai and the DPP were far too confrontational in dealing with China and as a result, we're putting the island and the Taiwanese way of life at risk.

Now, it is way too easy to read too much into President Tsai's resignation. Local elections are usually about local issues, crime, schools, housing, and the like. And it's hard to say from a distance how the DPP's policies on those issues or it's failure to speak about those issues because they wanted to talk about macro issues of relations with China affected the choices that voters made. But to the extent that it did, I think it's worthwhile to remember that thinking that the DPP is too aggressive in dealing with China does not merit the conclusion that the Taiwanese people want to be reunited with the mainland.

MCMAHON:

It's a great point. It's fascinating that this was our figure of the week as well because I think there has been a narrative accepted by some in the West at least that Taiwan is this literal and figurative island of democracy that is standing up to the big bully China at all costs, when in fact there's nuances about how its own people see the way they should do business with China. And doing business with China, by the way, is really important to Taiwan, incredible amount of integration between industries in the two entities. And I think there's a desire, as this local elections have shown, that they don't push it too much and don't poke it too much and see if they can work out some pragmatism. We should also note Xi Jinping has been making all sorts of stronger statements about the unification of Taiwan with China, so that doesn't help either. But the elections are also just, they just had an interesting nuance to everything.

LINDSAY:

And obviously, Bob, one of the things that matters is how does Xi Jinping read the results of the Taiwanese elections? Does he see it as creating an opening for China, as indicating that the Taiwanese people really want to be reunited with the mainland? My sense is that most Taiwanese would really like to just have the status quo persist because the life is pretty good. As you note, their economy depends heavily on interactions with China and they can't imagine severing that relationship. I know we talk a lot about decoupling, but it's not practical for Taiwan to decouple anytime soon from the Chinese economy.

MCMAHON:

Great point. And with that, that's our look at the world next week. Here are some other stories to keep an eye on. The UN marks the International Day for the Abolition of Slavery. Israel's President Isaac Herzog visits Bahrain and the UAE. And, Peru hosts the Pacific Alliance Summit in Lima.

LINDSAY:

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The articles mentioned in this episode as well as a transcript of our conversation are listed on the podcast page for The World Next Week on cfr.org. Please note that opinions expressed in The World Next Week are solely those of the hosts or our guests, not of CFR, which takes no institutional positions on matters of policy.

Today's program was produced by Ester Fang with Senior Podcast Producer Gabrielle Sierra. Special thanks go out to Sinet Adous and Elia Ching for their research assistance. Our theme music is provided by Miguel Herrero and licensed under Creative Comments. This is Jim Lindsay saying so long.

MCMAHON:

And this is Bob McMahon saying goodbye and be careful out there.