China is conning the world on ‘net zero’

Mike Jeffreys & Leith Van Onselen I 2GB+4BC I Published Feb 3, 2025, 3:28 AM

Leith van Oselen is the chief Chief Economist at the MB Fund and MB Super & Co-founder of MacroBusiness. He talks about China and how it's conning the world on ‘net zero’.

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“Residents of the Western world are being told that we must stop burning fossil fuels like coal and gas etc to stop so called dangerous climate change.

I think we can all agree we'd love to live in a cleaner world and if you can reduce pollution that's a good thing. But the problem with these policies is that they are effectively forcing manufacturing industries across the Western world - including Australia and Europe - to basically shrink.

We are shutting down cheap reliable baseload power, stuff that's powered our electricity grids for generations and given us cheap power. Consequently, it is forcing up our energy costs and contributing to the decline in our manufacturing sector. In Australia our manufacturing sector is the smallest in the advanced world, and has shrunk to about 5% of our national GDP or national economic output which is deplorable.

But? places like Germany and the United Kingdom etc., are also having their manufacturing sector shrink at an alarming pace. Principally because of high energy costs in the pursuit of ‘net zero’ etc. They got less reliable energy grids, the cost of energy is going up while they phase out their old fashioned reliable fossil fuel based power and try to go this renewable stuff.

Now, I argue that China is the largest beneficiary of the West ‘net zero’ policy. However, it's not abiding by the same rules and what we are effectively doing is while we are reducing our carbon footprints - through these sorts of policies and given us incredibly expensive energy and shutting down manufacturing becoming less diversified economies – China is simply expanding its carbon output and expanding its manufacturing sector at our expense.

The world's not getting cleaner, it’s just shifting the pollution away from us to China which is actually less regulated and the world is arguably worse off now. China accounted for 31.5% of world’s carbon emissions in 2023 according to Our Welding data - which is a fantastic website where you can plot and track carbon emissions by country. What this data showed is, yes China accounts for nearly one third of the world's carbon emissions and its emissions are growing at a near straight line upwards exponentially.

China has accounted for nearly 2/3 of the growth in the world's carbon emissions since 2000, so effectively China is driving the climate crisis. China is also the largest importer of gas and coal in the world much of which comes from Australia, so at the same time that we are being told they we are not allowed to burn coal and gas, we are actually sending that gas over to China to burn instead of us.

It's also worth noting that China is the largest coal producer in the world, so although China imports the most coal in the world it actually domestically produces more coal than anyone else. China actually burns 30% more coal than the rest of the world combined, so again this all gets down to that the developed world is cutting back on fossil fuel use while China is going gangbusters.

We are shrinking our manufacturing sector through high energy costs. We are giving ourselves a cost-of-living crisis, we are creating inflation etc., while we're cutting back we're sending the same fossil fuels over to China to burn instead of us and then just going willy nilly ranking up emissions, expanding China’s manufacturing sector at our expense and shooting ourselves in the foot!

The number of coal fired power plants in China according to a key study is 1161 coal fired electricity power plants. That’s a stark number to a lot of people particularly when they're constantly being told that we have to shut down coal fired power plants in this country. Australia’s got 18 and China's got 1161 – that’s 65 times as many as Australia and China is actually building 3 new coal fired power plants every month or approving 2 new coal fired power plants, while we are being told that we have to cut back.

China burns 30% more coal than the rest of the world combined. It's just crazy! There’s a report that came out by John Kemp from Reuters just after Christmas and he showed that China's electricity generation from coal grew by 51% in the decade to 2024. The developed world is saying we’ve got to meet ‘net zero’ and cut back on fossil fuel use for the good of the planet, give ourselves expensive energy costs and downsize our manufacturing because of those high energy costs.

Meanwhile, China is going gangbusters doing none of these things. Burning more coal than the rest of world combined and growing it's coal use every single year. It's emissions are going up almost in a straight line. Meanwhile, Australia’s emissions have not moved for a decade or so - effectively down a little bit – while the rest of the Western world's emissions have fallen.

So what are we doing here? I argue that the world would be better off, it'll be a cleaner planet, and it would be a lot more balanced, if the Western world simply did not export so much fossil fuel to China to burn. They could burn it themselves and keep their manufacturing at home rather than sending the manufacturing to China instead, because China has looser environmental controls than the West and its energy efficiency is relatively poor compared to the West.

We are being hoodwinked on ‘net zero’. We are being told that we've got to continually make sacrifices for the planet, continually cut back on old reliable power generation, while three quarters of East Coast gas is exported – most going to China.

So, we are creating gas shortages at home and we have given ourselves expensive energy. In Victoria we are being told that to we are not allowed to put in new gas appliances, and we are sending that same gas to China to burn instead of us - which makes no sense! And the same with coal. Almost all of Australia’s East Coast coal goes to China – and and China gets to burn our coal but we can’t burn our coal.

None of this makes any sense and yet the government maintains a blind eye. It's crazy, and we are wearing the cost of these policies. The concept of ‘net zero’ is ridiculous if China is not involved. If we are going to make sacrifices, then China is going to have to make sacrifices.

China is burning with gay abandonment, and they are increasing the world’s emissions. At the same time we've been forced to cut back, and as a result they've been expanding manufacturing industry because they don't abide by the same rules.

Consequently, Australia and the West has shrinking manufacturing industries, we’ve given ourselves a cost of living crisis, higher inflation and less diversified economies through these ‘net zero’ and high energy cost policies.

It makes no sense! Why are we doing what we are doing?"

Mike Jeffreys & Leith Van Onselen