The U.S. Special Presidential Envoy on Climate John Kerry has announced that he will not make concessions on other issues in order to work with China on climate change, while China’s Foreign Ministry has stated that the United States cannot silo the issue of climate change and must address China’s foreign policy as a whole. Can these differences be reconciled? If not, how can the two countries work together going forward?
It is in both China and the United States’ interests to engage on climate change. Both countries’ presidents want to be viewed as global leaders on this issue, and both also see this as a domestic policy priority. Thus, despite current tensions in the US-China relationship, we have seen ongoing, constructive engagement between the senior climate diplomats from both countries, John Kerry and Xie Zhenhua, even as discourse among other government officials has remained quite heated. Engagement and coordination between China and the United States was key to the Paris Agreement being adopted in 2015. We again are seeing regular bilateral meetings happening on climate change, including in-person meetings during the pandemic, because this has been such a crucial year in the lead-up to COP 26—the most important climate summit since Paris.
However, situating the climate change issue within the broader US-China relationship is increasingly challenging because climate change is inherently not a standalone issue. Addressing climate change brings economic considerations and security considerations. For example, concerns over solar supply chains being reliant on labor in Xinjiang has accelerated conversations about diversifying clean energy supply chains, and is directly interlinked with human rights concerns. The scale complexity of climate change makes it increasingly difficult to silo it as an “environmental” issue.
Chinese President Xi Jinping said two weeks ago that his country will no longer fund coal-fired power plants abroad, despite having done so for years through the Belt and Road Initiative. On the same day, President Joe Biden announced a plan to double financial aid to poorer nations to $11.4 billion by 2024 in order to help those countries switch to cleaner energy. What are each country’s motivations for these actions? Do these moves signal a serious American and Chinese commitment to use foreign investment to fight climate change and develop clean energy?
Beyond China and the United States, which together comprise about 40% of global emissions, many other countries around the world are still developing and building new coal power plants. However, the economics for energy development are changing rapidly. There's little economic rationale today to build new coal plants almost anywhere in the world now that the price of renewable power technologies has come down so dramatically. In many countries, wind and solar are the cheapest options.
China saying it will stop financing coal plants really sends an important signal because they had played such a large role in doing so until recently. And the United States has a much bigger role that it could be playing in helping other countries in the clean energy transition, so President Biden’s announcement about more clean energy focused aid is useful.
But ultimately the role of public support for clean energy development is modest compared with private financing, so it is very important to ensure that public support is leveraging private finance, and directing it towards clean energy sources. We will see an increasing focus in both China, the United States, and other countries on how to help emerging developing countries with the clean energy transition.
How vital is U.S.-China cooperation in the green technology and renewable energy space? Are there any instances in which the competition between the two countries could help advance the development of new technologies or strategies to combat climate change?
US-China cooperation on green technologies has been a fruitful area of cooperation in the past. Even though there are certainly areas where competition may make cooperation impossible, there are still numerous technology and policy areas where cooperation absolutely can and should still happen.
For example, there is still a huge opportunity to increase energy efficiency, both in China and the United States, but particularly in China’s industrial sector and building sector. There has been important cooperation historically in setting new standards that decrease demand for energy. These are all areas where you do not have huge competitiveness issues, because most of the technologies being used are not emerging technologies; and much of the cooperation is around policy design and things like changing user and consumer behavior.
Research and development on emerging clean energy technologies can be a much more difficult area for cooperation. That said, there are still opportunities to leverage US and Chinese strength in our respective innovation systems. For example, China can demonstrate new technologies at scale that can then be deployed globally. It has played an important role in the demonstration of new technologies, including technologies that were initially developed by the United States or by companies from other countries.
While much concern persists over science and technology cooperation broadly, I do believe that if designed carefully, including with intellectual property rights protections as done in the past, then energy technology cooperation can be beneficial to both countries and to US and Chinese tech companies.
The United States is experiencing an unprecedented era of energy security and does not rely on imports for natural gas or oil. However, China does struggle with energy security and is reliant upon oil and natural gas imports. This is largely why China is still so dependent upon coal. How do these energy security dynamics play into climate change relations between the two countries?
Most of China's energy security challenges are not really about supply. They are about inefficient domestic energy market structures. There is a very complex political economy in China when it comes to coal, where you see a high level of state control over prices and production. This can result in major inefficiencies, and even serious shortages, as we're seeing in China right now.
Renewable energy can also play a critical role in promoting energy security, because you do not have the issues with being reliant on imported energy. Naturally, the sun and the wind are domestic energy sources. But many of the challenges associated with broader use of these technologies is also driven market inefficiencies.
The way that we look at energy security in China is unique and in many ways is driven by domestic energy structures and market structures. Notably, reform in China's power sector has been ongoing for 20 plus years now, so this is not a new issue. The problem is that lot of policies being implemented in China’s power sector were originally envisioned for a market-based economy, including the carbon emissions trading system (ETS). China essentially redesigned the ETS model for use in a non-market economy, but many inefficiencies result from this. If there are no price signals, supply and demand are not in balance which can lead to dangerous power shortages and other problems. This is an area that's gradually getting better in China, but there's still a long way to go.
What are your hopes or expectations for the upcoming UN talks on climate change in Glasgow?
COP 26, which was meant to happen last year, was supposed to be an important opportunity five years after Paris (now six years) to assess what countries have achieved in terms of emissions reductions and then raise the bar. It is an opportunity for countries to show the progress they have made on pledges that they made in their “NDCs”, their nationally determined contributions, and then to come forward with pledges of increased ambition. While we have seen some countries come out with more ambitious commitments, many key countries have yet to announce revised NDCs, or those that have done so have not put forward as ambitious targets as are needed to advance global climate progress. For example, China submitted its reviewed NDC right before the start of COP26 which contains only incremental improvements on its first NDC.
My hope is that we see key countries, in particular China, but also India and others, continue to put forth more ambitious domestic pledges. That will not only signal that China and others are willing to take meaningful near-term action to reduce emissions domestically, but such signals from major emitters can also really help to mobilize a response from the rest of the world.
At COP 26 there will also be important discussions about Article 6 and Article 12. For example, I hope to see important progress on issues surrounding “transparency”-a term that encompasses issues related to emissions data reporting. The core of how we understand progress towards countries meeting their pledges is how data is reported and how we understand emissions trends. This is how we can actually trust what's happening in different countries, particularly countries that don't have robust emissions inventory systems in place. This is important to the overall international process, and to ensuring that the Paris Agreement can deliver on what it promised.
The structure of the Paris Agreement is contingent on countries continually coming forward to increase ambition, because we know that the current pledges up until now are not sufficient to achieve global climate stabilization goals. This is why COP 26 is so key to maintaining momentum in the international climate process.
U.S. Department of State from United States, Public domain, via Wikimedia Commons