Is Climate Action China’s Trump Card?

Columns 2024-05-06, 10:09am

Li Shuo

By Li Shuo and Lauri Myllyvirta

WASHINGTON, DC/HELSINKI – If former US President Donald Trump returns to the White House in 2025, China needs to step up to assume the mantle of global climate leadership – an outcome that many have considered impossible.After all, China has been the world’s biggest emitter of greenhouse gases for nearly two decades, currently accounting for 35% of global carbon dioxide emissions.But geopolitical dynamics can shift quickly in the face of conflict, economic strife, and crucial elections, meaning that China couldsoon be seen in a new light.

Lauri Myllyvirta

In 2023, China’s long-time (and recently retired) climate envoy, Xie Zhenhua, kept his cards close to his chest – the country was clearly not in the moodto make any major commitments.Ahead of the United Nations Climate Change Conference (COP28) in Dubai, theUnited States and China reached a headline-grabbingagreementto cooperate on climate change, butit included nobinding targets.And while China agreed to launch a“transition away from fossil fuels” as part of the final COP28 deal, it is still hesitant to reduce its coal consumption.

But this may be the year that Chinese leadership plays its hand. By early 2025, countries mustsubmit their next round ofNationally Determined Contributions (NDC) under the Paris climate agreement, including emissions-reduction targets for 2035. Recent Chinese statements and policies suggestthat internal debates about the new targets are underway.Chinafaces notable challenges in settingambitious climate goals, but doing so is in the country’s economic and political interests.

This would not be the first time that Chinese President Xi Jinping injected significant momentum into global climate action. In 2014, Xi and then-US PresidentBarack Obama jointly announced their initial carbon-reduction commitments ahead of the historic 2015 Paris climate conference.And in 2020,Xi pledged that China would reach peak emissions by 2030 and achieve net-zero emissions by 2060.

Theincreasingly volatile global environment and China’s current economic weakness pose significant challenges. After anupswing in emissions during and after the COVID-19 pandemic, the country has fallen short of its carbon-intensity target – a measure of emissions per unit of GDP – for 2025, and will have to cut emissions in absolute terms to meet it. Until recently, policymakers had assumed that emissions would increase until around 2028. Further complicating the NDC development process is China’s continued reliance on coal: in recent years, the government has approved a host of new coal-fired power plants to increase energy security.

Geopolitical considerations will surelyshape China’s decision, too. Chinese policymakers will patiently weigh their options until the US election in November.A Trump victory might mean less climate pressure on Beijing from the US. But China should act more proactively in filling the global leadership gap left by the US.

There are good reasons for Beijing to step up the climate game. China’s massive investment in clean-energy manufacturing has started to drive growth. By establishing itself as the world’s main supplier of solar panels, batteries, electric vehicles, and other green technologies, China has aligned its decarbonization agenda with its economic interests, presenting a strategic opportunity for the country to position itself at the forefront of sustainable modernization.

This clean-energy blitz could facilitateChina’s CO2emissionsreduction in 2024, raising the possibility of emissions peakinglong before 2030.And if China can hit this target before 2025, it could achieve substantial emissions reductions by 2035, the same year thatit aims to become a moderately developed country. In fact,as China is already well on its way to this status, it should specify an absolute emissions-reduction target for 2035 – a goal that only a few developing countries have set so far.

Chinese policymakers face difficult choices in setting climate goals. Some appear technical but have significant implications for environmental outcomes.One example is the selection of a base year for emissions measurements. Setting a percentage target for reducing emissions from a still-undefined peak to 2035 might seem rational, but it could create a perverse incentive for industries close to meeting their targets to delay peak emissions. Such anapproach would also create uncertaintyabout China’s emissions in 2035, as the peak from which emissions will be reduced may not be immediately clear.

Using a historical base year, such as 2020 or 2015, would be much more straightforward but could lead to an unnecessarily conservative target, given China’s large-scale investment in coal and the lack of clarity about its emissions trajectory. For example, if the country’s recent economic slowdown causes itsemissions to plateau, such a target would require minimal climate action after 2030. Butthe world needs a more ambitious approach from China. Turning China’s commitment to reduce coal consumption from 2026 onward into a measurable coal-reduction target for 2030 would effectively limit emissions increases.

Over the coming year, all eyes will be on China to see how it negotiates the complexitiesof setting new NDC commitments. If the authorities decide to pursue an ambitious strategy, they could end up accelerating the domestic energy transition,which is already providing a much-needed economic boost, while taking a leading role in the globalfight against climate change.

Li Shuo is Director of the China Climate Hub of the Asia Society Policy Institute. Lauri Myllyvirta is a non-resident senior fellow at the China Climate Hub of the Asia Society Policy Institute.