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Will China Take the Lead on Climate Change?

A ChinaFile Conversation

@realDonaldTrump via Twitter

At a time when the world is looking to China and the United States, the leading emitters of greenhouse gasses, to cooperate under the terms of the Paris Climate Change Agreement of 2015, will China now take the lead in fighting climate change? Working with our colleagues at chinadialogue in Beijing and London, we put the question to a range of experts. —The Editors

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President-elect Donald Trump is on track to become the only head of state of a major greenhouse gas-emitting nation to deny that climate change is real. Trump tweeted in 2012 that the concept of global warming “was created by and for the Chinese in order to make U.S. manufacturing non-competitive.” A top Chinese envoy refuted Trump’s statement, which it should be noted was plainly false.

At the U.N.-led climate talks last week in Marrakesh, Morocco, known as COP22, it was left to the outgoing U.S. Secretary of State John Kerry to reassure delegates that markets, not governments, have so far spurred the rapid deployment of renewable sources of energy around the world. He’s not wrong: economies of scale and competition between manufacturers in China helped create massive price deflation across solar and wind.

Yet, if the United States were to lead as a “clean energy superpower”—a campaign pledge of the defeated Democratic candidate Hillary Clinton, who had promised a massive increase in solar capacity—industries would need strong and consistent policy support, and opposition to environmental regulation and climate action is a rare stance uniting both the Trumpian and more traditionally conservative wings of the Republican Party.

Still, the global direction is clear. At COP22, countries issued an “Action Proclamation,” stressing the speed of the shift in the real economy and highlighting the urgent need for action. The transition away from fossil fuels is real—and in this context, other countries will spy the opportunity to master and supply the technologies needed for a carbon-constrained world.

Best positioned among these nations is surely China. “If America wants to forfeit that [renewable energy] leadership, or erode it, then China or India will very happily grasp it,” Tim Buckley, Director of Energy Finance Studies for the Institute for Energy Economics and Financial Analysis, told Mashable. “China and India are very happy to have the global leadership of industries of the future that employ millions of people and are seeing close to $2 trillion of investment a year.”

Sure enough, Chinese state media reported that Xie Zhenhua, China’s top climate envoy, told climate negotiators that his country—which the International Energy Agency recently confirmed had passed “peak coal” in 2013—would “act as facilitator to boost climate negotiations on implementing the Paris Agreement, regardless of the stance that the United States takes”.

Low-carbon innovation is a pillar of China’s strategy in the “new normal”: the era of economic upgrading towards higher-value industries the country hopes to see under its 13th Five-Year Plan, from 2016-2020. It already leads the world in installed wind-power capacity and is the world’s biggest investor in renewable energy.

Yet, as in many aspects of its economy, China still faces problems with implementation, from curtailment of renewable power (where wind and solar farms are not connected to the grid) to powerful local incumbents pushing the construction of coal-fired power plants that are likely to stand idle, or exporting overcapacity overseas.

Perhaps more critical is the potential erosion of trust that Trump’s victory represents: the climate accord agreed by Presidents Barack Obama and Xi Jinping, representing the world’s two largest economies and greenhouse-gas emitters, in late 2014 set a historic precedent, avoiding a collective action problem and smoothing progress towards the Paris Agreement, which Trump has vowed to “cancel.”

If Trump, who has also nominated an opponent of climate action as the head of his Environmental Protection Agency transition team, can undermine this cooperative stance, the question remains: will China step up and take the lead on climate change?

China was responsible for over one-quarter of the world’s carbon emissions in 2014—more than the U.S. and the European Union combined. It accounts for 33-40 percent of the carbon emissions gap between current trends and a 2 degree Celsius pathway. Yet China is moving to cut its CO2 emissions much faster than anyone expected, and is now on a path to achieving its Paris climate commitments, including peaking its CO2 emissions, well before its 2030 goal. China is on track to cutting its CO2 emissions by 0.5 percent this year as it burns less coal, building on a 0.7 percent reduction last year, and contributing to a global slowdown in CO2 emissions growth.

In fact, China is emerging as a global climate leader, taking the number one spot in global renewables investment for the past few years. In 2015 alone, China invested $102 billion in renewables, more than the U.S. and E.U. combined, representing half of new wind power installations globally and one-third of new solar capacity. Realizing the benefits of actively adapting to the new low carbon economy, China is committing to move ahead regardless of what the U.S. does.

China is not waiting until 2030 before taking climate action. In September and October of this year, for example, China cancelled dozens of coal plants already under construction with a combined capacity greater than the U.K.’s entire coal fleet, in order to avoid building coal power capacity that would become stranded, un-used assets given increasingly cheap renewables. It has set a national coal consumption target of 4.2 billion tons for 2020, about the same as its coal consumption in 2013, and its coal consumption has actually fallen for the past two years, with 2016 likely to continue the trend.

China’s 13th Five-Year Plan (2016-2020) for power sector development and greenhouse gas emissions control, announced recently, calls for increasing wind and solar power to 210 GW and 110 GW respectively, achieving sales of five million new electric vehicles, establishing a national carbon market to price carbon, and developing 100 pilot low-carbon cities (from the current 40) by 2020. China will also reduce its CO2 emissions per unit GDP by 18 percent below 2015 levels by 2020 and seek to meet new energy demand with low-carbon energy sources, as it has been doing for the past several years.

China’s transition to a low-carbon economy is neither easy nor painless. But China recognizes that transitioning from fossil fuels to renewable energy will ensure its long-term economic development by creating jobs in new industries such as renewables, EVs, and efficiency; combat its relentless pollution; and protect China from the devastating impacts of climate change on its food security, human health, cities, and infrastructure. And rather than denying the reality of climate change and continuing to expand fossil fuel use, as Trump and the Republicans seek to do, China has pledged to set aside $15.8 billion for job retraining and other support for workers.

Much new job growth is already coming in the clean-energy sector. China is the world’s undisputed leader in green jobs, driven by unprecedented growth in the solar and wind industries: 3.5 million people now work in the renewable energy sector in China, while 769,000 work in the renewables sector in the United States. China’s leadership in renewable energy technology, revenue, and jobs will only accelerate if the U.S. pulls back on its climate commitments. In fact, at least one commentator has called Trump’s climate denial “a gift to China’s green industry.”

That’s not the only gift that Trump would give to China if he abandons the Paris Agreement. Relinquishing America’s international leadership role on climate change would open the door for China to become the world’s de facto climate leader, diminishing U.S. influence and enhancing China’s across multiple issues.

With the political situation in the U.S. uncertain, China has, in effect, already been installed in the driver’s seat by international expectation. This expectation is expressed nowhere stronger than in Marrakesh, where 197 parties to the U.N. climate convention are currently gathered. Throughout this two-week climate talk, the question of who will fill the leadership vacuum was asked by journalists over and again to the Chinese delegation.

This emerging call for new leadership sends a challenging question back to Beijing: Is China ready to go beyond its negotiation rhetoric and embrace more international responsibility? For the past few years since the catastrophic failure in Copenhagen, China has transformed itself from a climate zero to a climate hero. But international leadership requires more than only taking domestic action, it asks China to bring others along too. It remains to be seen to what extent Beijing is diplomatically capable and politically willing to achieve that. Instead of speculating what President elect Trump might do on climate, it is perhaps time better spent for Chinese strategists to chart out a meaningful and concrete game plan for Beijing.

The good news is there are already voices that are shaping a new narrative from China. Zou Ji, a former negotiator for the Chinese government, has suggested the potential leadership deficit will present China “a way of raising its status, power and leadership in the global order.”

What’s underpinning Zou’s idea is the firm, systematic, and predictable domestic actions that China has undertaken over the past years. A latest report found that the world’s CO2 emissions have been stalling for the past three years, largely contributed by China’s coal consumption decline. As I argued in this space previously, now is the best historical moment to advance China’s climate agenda.

With the wind shifting in Washington, China will also need to look at Europe for cooperation. Both the G20 and next year’s U.N. climate conference will take place in Germany. These will offer good platforms and moments for Berlin and Beijing to work together and move the world further in implementing and enhancing the Paris Agreement.

All of these leave the U.S. with a forked road ahead. It could either maintain its current focus on climate change, or risk becoming politically irrelevant and suffering from serious reputational backlash and geopolitical consequences.

Donald Trump’s appointment of Myron Ebell to head the EPA transition suggests he will not get advice that will dispel his ignorance on climate change, a topic on which he does not seem to have been keeping up. His campaign promises to bring steelmaking back to Pittsburgh would, if fulfilled, be the biggest surprise since Lazarus. The recreation of thousands of jobs in coal would require the deportation not of Mexicans, but robots.

One hundred eighty-nine countries reaffirmed their commitment to the Paris Agreement in Marrakesh last week. That is a lot of diplomatic capital for the U.S. to squander and a huge diplomatic gift for China. Action on climate change meshes neatly with China’s vision of an advanced technological future, and global climate leadership enhances China’s image and helps to counteract the fears that a powerful China evokes.

How much more leadership can China offer? The current pledges in the Paris Agreement on greenhouse gas reductions fall far short of what is required to meet the goal of less than 2 degrees centigrade of warming, let alone the aspiration of 1.5. All countries will have to increase their efforts. If the world’s second-largest emitter opts out, it places a greater burden on the rest.

China will not opt out. The vision of a low-carbon future, with its ambitions for clean energy, new technology, and changes in consumption and city design, is embedded in its strategic economic and industrial planning. China’s coal use has peaked and its greenhouse gas emissions are likely to peak years earlier than the promised 2030. China has nurtured a range of low carbon technologies for a cleaner and more prosperous future, as well as a higher value export offer. China’s capacity to manufacture at scale has lowered the global cost of renewables, bringing the option of low carbon development within reach of others. China is already demonstrating leadership. How much more can it do?

China, like all nations, must increase its ambition. Global leadership would also demand that China pro-actively provide funding for mitigation and adaptation in poorer nations, and to compensate the people of the Marshall Islands (or Florida) when their habitat goes under water. If a Trump administration cuts funding, the gap will be much bigger.

China is already contributing—through a small south-south fund and through aid and trade—but more will be required. It could stop funding and building coal power plants overseas and at home. Its new multilateral institutions could join its developing bank in pro-actively supporting low carbon development around the world especially where it is tied to Chinese low carbon goods and services; President Obama’s efforts on climate change were important and welcome, but U.S. leadership has been, at best, fitful over many years. China can claim to be a steady friend.

And of course, major U.S. businesses also called in Marrakesh for the president-elect to think again, acting not out of philanthropy but because they see that the world has changed. They, and those U.S. cities and states that have made their own climate policy in recent years, will continue to act in their own best interests. China will continue to cooperate with them, even as its businesses compete. The potential prize for China, in moral, diplomatic, and economic terms, is huge.

Donald Trump’s unexpected victory in the U.S. presidential election caused a stir in Marrakesh and created uncertainty over what policy decisions he might make, including around whether the U.S. might withdraw from the Paris Agreement. This also raised discussions around China’s potential role. In my view, there will be restrictions put on the size and speed of the Trump retreat. In the meantime, China should lead the global community in keeping collective pressure on the U.S. and restricting potential damage from a U.S. exit to a minimum, but also should not go beyond its capability and capacity.

On the campaign trail, Trump promised to cancel the U.S. involvement in the Paris Agreement and cut the U.S. international obligation to provide climate-related funding. However, past evidence shows that the U.S. president-elect doesn’t always stick to promises made as a candidate. Whether this applies to Trump remains open, given that by any standard he is completely different from any previous U.S. president.

According to Article 28 of the Paris Agreement, it would take four years for any country to exit the United Nations deal. Even if the U.S. decides to withdraw from the Paris accord, it would be 2020 before it would get what it wanted. If it exits, the U.S. would pay high political and diplomatic costs. The U.S. could be confronted with potential carbon tariffs, on the same grounds that the U.S. used them as a threat against other counties for not taking climate change reduction steps comparable to its own. The plausible option is that the U.S. remains a party to the Paris Agreement, but waters down some initiatives and efforts undertaken during the Obama administration.

To what extent the U.S. could retreat remains to be seen. On the one hand, in a bid to make the U.S. fully energy independent, Trump might support renewable energy, along with sources such as fossil fuels. On the other hand, Trump lost the popular vote and a large number of states, counties, and cities across the U.S. have been taking great actions and making great efforts toward climate mitigation through the wide use of renewables, even in those states where Trump won. All these may restrict the size and speed of the Trump retreat.

In the meantime, China and the E.U. should lead the global community in keeping collective pressure on the U.S. In Paris, China showed itself both as a great collaborator and a leader in global governance. With the potential vacuum left by a U.S. retreat, China should grab with this opportunity and strengthen its role in global governance of climate change. Meanwhile, it should avoid taking too much responsibility that goes beyond its capability and capacity.

The election of Donald Trump as president of the United States is bad news for the global environment. He does not support the steps required to meet the pledges to reduce emissions as part of the agreement reached in Paris at the end of 2015. As a result, many worry that the Paris agreement may fall apart completely.

But, bad news is not the same as fatal news. And, it is may be less likely that global efforts to reduce emissions will fall apart than many believe. Following are some reasons why.

Consider the motivations of the world’s largest emitter, China, for continuing with emissions reductions. China has powerful reasons to reduce coal use due to local air pollution. Air quality in Chinese cities is frequently abysmal. It constitutes a serious health, economic, and political threat. To enhance air quality, China would be likely to make substantial efforts to shift to lower emissions technologies over the next decade in all cases.

The Chinese do care about emissions. With nearly 1.4 billion people crammed into a relatively small area, the Chinese leadership correctly views global warming as a real threat.

The Chinese have already invested heavily in low emissions technologies, including solar, wind, and nuclear power generation. These investments reduce emissions and position China as a global leader in the production and servicing of low emissions energy technologies.

Finally, China aspires to be a global power. By reneging on U.S. commitments made in Paris, a Trump administration will be handing China the opportunity to assume the mantle of global leadership on a defining issue for the 21st century. A strategically wise China will accept the offer.

Meanwhile, back in the United States, nearly two out of three Americans cite global warming as a worry. While not as effective as concerted action at all levels, American democracy provides multiple avenues for reducing emissions based on actions by states, cities, companies, families, and individuals, particularly in coalition.

Finally, rapid technical advance is providing a tailwind. Clean energy systems now regularly outperform fossil fuels in open, large scale energy supply auctions. This competitiveness substantially eases the political economy of clean energy transitions. This is reflected in actual investments. In 2015, global investment in renewable power capacity was $265.8 billion, more than double dollar allocations to new coal and gas generation, which were estimated at $130 billion.

With these investment volumes, the private sector has ample incentive to pursue innovations in the clean energy space, meaning that these very favorable technology dynamics look likely to continue.

These factors, combined with solid commitments to emissions reductions from other major economies such as the European Union and Japan, imply that the global movement to limit emissions formalized last year in Paris might not fall apart. Instead, the world may demonstrate just how alone the Trump administration is in refusing to confront climate change.

A version of this post was originally published by The Conversation.—The Editors

With Trump’s election to the White House and his denial of climate change (at one point, calling climate change a Chinese hoax), many analysts predict that China and India would gladly make up the “leadership deficit” left by an American retreat on climate change. China in particular is poised to take the leading role on green technology development as it has already invested the most in renewable energy. While the analysts are right to assume China’s continued commitment, the rolling back of the United States’ commitment inevitably will affect China negatively as it weakens one of the most powerful innovation engines in green technology and reduces competitive pressure that drives the progress in this field.

In the last five years, the world has celebrated China’s growing commitment to low carbon development, seen in the U.S.-China climate agreement signed in 2015. What motivated China, though, is not primarily the global pressure of climate change, but three other strategic concerns: China’s national security, technological autonomy, and alarming domestic pollution.

First, since the early 1990s China as a nation has turned from an energy exporter to an energy importer, with an ever-larger volume of oil and gas imported from politically unstable regions of the world. Given that China cannot project much military force in these regions or in international shipping lanes, its reliance on the United States for security caused Obama to call China a “free rider.” Renewable energy development is one way to reduce foreign dependency and enhance national security.

Secondly, technological autonomy is a crucial concern for China. China has invested massively since 2004 in solar, wind, and nuclear energy with some powerful industrial players. Given that China has had a hard time catching up with technological leaders in traditional sectors, these areas are viewed as the best chance for China to achieve technological leadership and gain a measure of autonomy.

Third, China’s leaders are facing rising public anger and protests due to environmental pollution in air, water, and soil. Every winter, the air quality in northern China dips to unacceptable levels due to heating. The jammed urban streets also demand alternative vehicles to reduce emission. The public anger has soared to such a level that the Chinese leadership is forced to look for alternative energy or low carbon development.

While China will continue its efforts in green technology, I am afraid that the retreat of the United States will still have negative ramifications. In our recent book, China as an Innovation Nation, we found that one of the key strategies of China’s technological advance is through system integration—i.e., Chinese companies draw from the best ideas, practices, and products in the world and integrate them into their products. China is good at replicating cutting-edge technology, expanding the scale of production, and producing affordable green products, as in the wind and solar industry. But Chinese firms owe these earlier innovations to the United States and other western countries. To undercut the innovative genius of the United States is akin to cutting off the water at its source. The Chinese eventually will make up for some shortfalls in innovation but it will take time, time we do not have in combating climate change. Chinese firms also look up to American firms as role models in addition to their being competitors. When that competitive pressure is lifted on one side, the other side also will slow down, and the world will be worse off. Let’s hope that Trump’s administration will come to its senses and this does not happen.

Four days before the Paris Agreement was due to go into effect, the result of the U.S presidential election threw the COP22 into an uncertain atmosphere. Delegates discussed who would lead the fight against climate change through domestic actions and international cooperation. The quick international consensus was that China must take up that leadership role.

China’s leadership is based on its political commitment to climate action. Beijing has been consistent, firm, and positive in taking on increasing international responsibilities in accordance with the times. As the world’s largest emitter of greenhouse gasses and the second largest economy, China has shouldered more international responsibilities in bilateral and multilateral arena. China was among the first to ratify the Paris Agreement and it’s widely expected that China might deliver on its goals faster than expected on the short term and reliably in the long term.

Beijing puts transition to green energy at the core of its economic development strategy. China could achieve the major political goals pledged in Copenhagen at the end of 2016, and will formulate more ambitious emission reduction targets by 2020. China’s energy transition has made rapid progress but still faces serious challenges. China’s coal consumption peaked in 2013, and its growth in oil use is decreasing. China has set up five-year targets for energy-saving renewable energy development. China’s 13th Five-Year Plan added total energy consumption control and total carbon emissions control. China is planning to establish a carbon emission trading market in 2017, and develop it into the world’s largest by 2020. China promoted and established a finance system to promote a green, low-carbon and circular economic development. Beijing pledged to reduce emissions from HFCs and CH4; launched an alliance to encourage provinces and cities to achieve an early peak in their carbon emissions.

Meanwhile, the private sector has started to regard emission reduction as its social responsibility and civil society has made rapid progress in emission reductions, with the public increasingly caring about climate actions that will combat climate change, curb environmental pollution, and change energy consumption patterns. With these aforementioned efforts and the 13th Five-Year Plan (2016-2020) and the 14th Five-Year Plan (2021-2025) China could achieve its CO2 emissions peak much earlier than 2030.

China’s climate leadership is based on increasing global influence over the economy, finance, culture, and the environment. China contributes around 20 percent of global trade, accounting for the largest share of world exports. The yuan has become one of the major currencies of the IMF. China has established multilateral financial institutions, such as the Asia Infrastructure Investment Bank, the New Development Bank (formerly the BRICS Development Bank) and the Shanghai Cooperation Organization Fund. Moreover, China pledged RMB 20 billion to its South South Cooperation Fund, and donated $6 million to the Southern Climate Partnership Incubator at the United Nations. Domestically, Peking University has set up the South-South Research Center, with increasing support for capacity building, technology transfer and financial support. China’s “One Belt, One Road” initiative synchs nicely with the economic development strategies of many nations and will play a leading role in achieving the goals of the 2030 Agenda for Sustainable Development and implementing the Paris Agreement.

If the U.S. rolls back its climate commitment, it is unlikely that China will step up to take the lead role in global climate action. Although Chinese leaders would love to expand China’s influence in global affairs, they are also cautious about the cost of being at the center of the stage. In particular, climate leadership is not a privilege but requires serious responsibility.

Climate leadership comes at a hefty price. China’s journey in de-carbonization has proved to be a tough challenge. With the economy losing steam, local governments are reluctant to curb energy- and emission-intensive industries. Even worse, many provinces are now limiting renewable energy production in order to protect the fragile coal industry. If economic growth continues to slow, many would go back relying on dirty industries to create jobs, unless the emerging clean sectors can become the new engine of economic growth.

The value of climate cooperation in the Sino-U.S. relationship will depreciate faster than the RMB. China was surprisingly aggressive in climate action, evidenced by the commitment to peak its carbon emissions by 2030. Its enthusiasm was partly fueled by the U.S., especially Obama’s endeavor to leave a climate legacy. Climate change cooperation was one of the few bright spots in the Sino-U.S. bilateral relationship in the past four years. Now that president-elect Donald Trump vows to withdraw from climate action, the diplomatic value of climate change cooperation will be minimal at the federal level.

I am still optimistic. Even if China cannot fill the void of climate leadership, it does not imply that China will stop its effort in combating climate change.

China will stick to low-carbon development because of its importance in ecological civilization, which is an official development strategy endorsed by President Xi. However, China will probably adjust its climate strategy. China’s climate effort will be less likely driven by diplomatic needs. Instead, it will primarily focus on those areas that can enhance its own national interests, such as clean energy, energy security, and green job opportunities.

China’s aspiration for blue sky is a major incentive for its engagement in climate change. As many local cities are still struggling to clean up the sky, climate policy will become an auxiliary instrument to supplement environmental regulations. Therefore, the climate activities that are associated with large local co-benefits will be preferred.

China’s climate policy will pay more attention to the costs and benefits of climate actions. In an era of new normal with slower economic growth, it is instrumental to ensure that climate policy has the least economic impact if it cannot contribute to GDP growth.