When it comes to a global clean energy transition, China is both part of the problem and part of the solution.
On the problem side, China is the largest emitter of carbon dioxide in the world by a rather wide margin. In 2020, China was responsible for a little over 30 percent of annual carbon emissions. The share of the number two emitter, the United States, was about 13.5 percent. Factoring in all greenhouse gasses doesn’t change the picture very much, with China still number one at 26 percent and the United States number two at approximately half that figure. But if you look at historical emissions, the picture reverses, with the United States responsible for approximate 20 percent of all carbon dioxide emissions since 1850 and China in second place at 11 percent. Also, on a per-capita basis, China slips to the number four position, with approximately half the emissions today of either the United States or Russia.
At the same time, China has been a global leader in shifting from fossil fuels to renewable energy, adding more renewable energy capacity than any other country. By the end of 2022, China is on pace to install an astounding 156 gigawatts of additional capacity provided by wind turbines and solar panels, which is 25 percent more than the record it set in 2021. By comparison, the United States is expected to install only about 30 gigawatts of solar and wind power this year.
China’s economy continues to grow, albeit less dramatically at the moment, and so does its energy needs. Total power usage has increased about 4 percent so far in 2022 compared to last year. Since China made its first international pledges to tackle climate change in 2009, its economy has grown threefold—but its energy consumption has only grown by half that figure.
“China hasn’t absolutely decoupled GDP growth from energy consumption and emissions,” points out Chinese journalist Liu Hongqiao, “but the trend is bringing us in the direction of decoupling.”
China has also been a driver of international climate agreements. Its 2014 bilateral climate deal with the United States made possible the subsequent Paris climate agreement. But more recently, China suspended climate discussions with the United States because of the latter’s Taiwan policy, including high-level congressional visits to the island.
“At the government-to-government level, the U.S.-China relationship appears to be in the dumps right now,” points out Jennifer Turner, the director of the Wilson Center’s China Environment Forum. “But in the area of environment and climate, cooperation has become part of the DNA of the two countries.” She points to subnational cooperation between, for instance, China and California, as well as the large number of U.S. environmental NGOs operating within China.
Tobita Chow, the founding director of Justice Is Global and the moderator of this recent conversation about the future of China’s Green Revolution, has been looking for alternative approaches to the U.S.-China relations “that get away from the framework of great power competition, which I think is dangerous in many ways. Cooperation is a promising way to define a healthier U.S.-China relationship, for instance cooperation around clean energy and tech-sharing in the Global South, which could be a powerful way of addressing the intersection between global inequality and climate change.”
In the space of a single generation, China transformed itself into a global economic giant. It now faces a task of comparable urgency and scale. In the space of a generation, China must lead the world by greening its enormous economy. How quickly Beijing can accomplish this goal will largely determine whether the world can prevent the global temperature from exceeding 1.5 degrees Celsius over pre-industrial levels, the goal the international community established as a goal for 2050 under the Paris climate agreement.
China’s Decarbonization Miracle
Despite its commitment to expand its renewal energy infrastructure, China remains the leading consumer of fossil fuels in the world, using twice as much as the United States. Moreover, more than half of China’s energy consumption comes from coal, which releases more carbon into the atmosphere than oil or natural gas.
Yet the Chinese government has pledged to reach peak carbon dioxide emissions before 2030 and to achieve carbon neutrality by 2060. “If China meets these goals,” notes Liu Hongqiao, “it can prevent a further 0.2 or 0.3 degrees of global warming. China is contributing its share, though you can argue whether it is a fair share or not” given the country’s current carbon output as well as its historic emissions.
The timeline for China is highly compressed. “In comparison to the European Union or the United States, China has to hit peak emissions in the next few years and go from peak emissions to net zero in 30 years, which is what the United States and other countries are accomplishing in 70 years,” she continues. “In reality, China’s emissions could peak earlier and at a lower level. And that would mean avoiding even more emissions on the path from peak emissions to carbon neutrality.”
But, she adds, the essential question remains, “Can the country go from the Chinese miracle that it created over the last 30 years to a decarbonization miracle in the next 30 years?”
To track China’s trajectory, Liu has dug into the details of China’s energy use. “We’re witnessing a fundamental change in China’s electricity mix,” she notes. “For instance, we all know that China is very dependent on coal. But that is changing. China has reduced its share of coal in primary energy and electricity consumption by 15 and 22 percentage points, respectively, since 2009. The share of coal is still about 56 percent right now in primary energy consumption. By 2025, however, the share of coal will drop below 50 percent.”
China has pledged to bring the share of non-fossil energy sources—wind, solar, hydro, biomass, and nuclear—to 80 percent of total energy consumption by 2060, but Liu notes that the share of wind and solar might get up to 96 percent in certain scenarios produced by the state-planners’ Energy Research Institute. The final result may depend as much on the provinces as on the state government.
“Provinces and cities are the gatekeepers of China’s decarbonization,” she points out, citing a recent Greenpeace report. “In some frontrunner cities and provinces, like Shanghai, Guangdong, and Beijing, we are already witnessing a strong decoupling of GDP and emissions. Other frontrunners like Sichuan province have pledged to ban new coal-powered plants. The city of Zhangjiakou, which is hosting the 2022 Winter Olympics, has more wind and solar capacity than all but nine countries in the world. On the other hand, there’s a relatively weak decoupling of GDP and emissions in Tianjin, Hubei, Jiangsu, and Anhui provinces.”
China’s climate strategy is not just narrowly about decarbonization. “The Chinese government thinks that addressing climate change is a lever to change China’s entire social and economic structure, not just energy,” Liu concludes. “It wants to put China on a pathway to decarbonization but more importantly to high-quality economic development.”
Pressure has also come from the Chinese public, for instance, to address air pollution. “Beginning in 2007, you saw a lot of street protests, and also complaints on social media about air quality in cities,” notes Jennifer Turner. “In 2013, the northern part of the country was hit by several shocking air-apocalypses. That year, China declared war on pollution, which has been nothing short of phenomenal in terms of improving air quality. If you’re addressing coal and cars for their air pollution, it has obvious co-benefits for addressing climate change, which the government is well aware of. So, yes, the government’s actions are about the economy and economic growth, but they are also in the interests of social stability.”
The Future of U.S.-China Climate Cooperation
In the wake of House Speaker Nancy Pelosi’s trip to Taiwan in early August 2022, China broke off talks on climate cooperation. Jennifer Turner remains optimistic that bilateral negotiations will resume: “Things are still happening, albeit at a slower rate.”
“I’ve had a front-row seat for 23 years to see how the two countries work together,” she recalls. “During the Obama administration, there were seven clean energy agreements. The U.S.-China Clean Energy Research Center (CERC) brings together national labs, NGOs, tech companies, business, and government to solve wicked problems involving electric vehicles and photovoltaic cells as well as the policies to enable the new technology.”
In addition to the national level, U.S.-China cooperation can be found at a subnational level. For years, Chinese experts studied California’s zero emission vehicle program as a model for China’s own program.
At the NGO level, a Chinese law in 2018 requiring the registration of foreign NGOs reduced the number of such organizations working in the environmental space. But some larger organizations like Greenpeace and the Environmental Defense Fund continue to operate, with largely Chinese staff. Meanwhile, Chinese NGOs continue to do important work, like mapping water pollution in rivers. In 2017, the government issued a call on social media to identify filthy rivers, but it was Ma Jun of the Institute of Public and Environmental Affairs who transformed this incoming information into a map. The organization Green Hunan has mobilized citizens to monitor the Yangtze River. These NGOs serve “as the ears and eyes of the local environment protection bureaus that can’t monitor in those ways,” Turner notes.
U.S. and Chinese environmental policies are linked sometimes in unexpected ways. For instance, China announced in 2018 that it would no longer import recycling waste from other countries. “China absorbed half the world market of recyclables, which it was using as industrial feedstock,” Turner explains. “China was choking on its own municipal waste.” In response to the ban, “a lot of U.S. cities and states canceled their recycling programs,” she adds. “But earlier this year, the international community came to an agreement to end plastic pollution by 2024.” Now the United States and China will be working together as part of an international effort to reduce one of the major components of the recycling stream.
More explicit partnerships between the two countries are essential, Turner urges. She points to the need for standards on lithium and rare earth elements, which are essential components of clean energy technology like electric vehicles and wind turbines. The need for lithium, primarily for batteries, will increase tremendously over the next decade as electric vehicles replace traditional internal combustion cars. China owns somewhere between 70 and 80 percent of the supply chain for electric vehicles and lithium-ion batteries, as well as 60 percent of the rare earth element production.
“Besides normal energy cooperation on climate, there’s also the issue of food and agriculture,” Turner points out. “China and the United States are both global superpowers when it comes to food. And one third of greenhouse gas emissions come from agriculture and food production. The two countries plus Europe are responsible for agricultural imports leading to emissions, biodiversity loss, and social-cultural threats.”
Another option would be to work together within China’s major global infrastructure development project, the Belt and Road Initiative (BRI). Chinese leader Xi Jinping “has pledged to green the BRI,” Turner continues. “For instance, China has announced that it is stopping overseas investments in coal-fired power plants.” The United States could compete with China in a “race to the top” in setting global standards for infrastructure development around the world.
Or, Tobita Chow adds, the United States could partner directly with China. He cites the recommendation of Rebecca Ray of the Global Development Policy Center for the United States to follow up on a Chinese suggestion to work jointly on specific development projects. “This would give the United States a say on standards governing any projects it collaborates on with China,” he notes.
Both the United States and China have devoted considerable energy to establishing standards that can raise the quality of development projects. The United States has been instrumental in establishing the Blue Dot Network, which promotes “quality infrastructure investment that is open and inclusive, transparent, economically viable, Paris Agreement aligned, financially, environmentally and socially sustainable, and compliant with international standards, laws and regulations.” China, meanwhile, has developed a “traffic light system” to ensure that BRI projects reduce environmental risks and contribute to a green transformation, with green representing a positive contribution, yellow neutral, and red negative.
“Raising environmental and social standards for the mining of rare earth elements (REE) and other minerals crucial to a green transition is urgent,” Liu points out. “But if we frame this question under a just transition, it goes way beyond environmental standards. Concerns were raised in China about local communities’ sacrifice of their livelihoods, environment, and clean water to supply the rest of the world and meet domestic demand for REE used in high-tech products. But that argument wasn’t taken into consideration in the WTO dispute when China cut its quota on REE exports. And attempts to incorporate such external costs and to raise the commodity price in the global market only started to receive attention as the United States and EU sought to secure the supply in their own territories.”
The Obama administration took China to the World Trade Organization, accusing it of unfairly restricting exports of REE. The United States argued that China was using export quotas to give a market advantage to domestic producers that had access to cheaper raw materials. The WTO ruled in the U.S. favor, and China cut its quotas accordingly.
“Since 2016, China has been passing new industrial and environmental standards to regulate REE and other minerals and has also ramped up enforcement of those standards,” Liu continues. “However, we simply don’t have enough supply in the market to meet China’s domestic demand let alone global demand. What’s very worrisome is the prospect of Myanmar and other developing countries taking over the REE supply chain. You can’t count on military-controlled Myanmar to enforce environmental standards, particularly where REE mining occurs illegally, against both the constitution and local laws.”
China and the United States thus have a common interest in global standard setting, whether the bar is raised by their cooperating on joint projects or their competing to see which country can promote cleaner projects.
“China has led the technical revolution on the mining of rare earth elements as well as cobalt and lithium,” Liu adds. “Because China has been the hub for production, processing, refining, and manufacturing, turning these minerals into key components for clean technology, China owns the most patents on this technology in this very niche field. If competition with the United States happens in a good way, it can bring down costs and that would benefit not just United States and China but also the rest of the world. Without fixing global resource governance, seeking alternative supplies from countries like Myanmar, where governance is even laxer than China’s, simply doesn’t make the problems go away. It will only produce more issues.”
A common criticism of higher environmental or labor standards is that they will deter outside investors, China among them. But Jennifer Turner notes that a recent study of countries in the Andean region shows that more stringent regulations has not affected Chinese investments. “China says that it will obey the rules in host countries,” she points out. “Often a host country or subregion will invite China in, give it carte blanche. But this research gives ammunition to local governments and civil society to push for stronger enforcement in their own countries.”
Meanwhile, outside NGOs are coming up with tools to help civil society to do just that. Asia Society, for instance, has developed a BRI toolkit to support local stakeholders in their own efforts to push for stronger environmental and social standards. “It’s not just environmental impact assessments,” Turner notes. “There are different mechanisms along the entire path of a project to promote transparency and other goals.” At the same time, she acknowledges that raising BRI standards is challenging because so much of the work goes through subcontractors such that China state-owned enterprises can’t easily “green” every step of the supply chain.
“There have been a few breakthroughs on greening the BRI in the last one or two years,” Liu adds. “To start with, China committed to stop building overseas coal-powered projects, though this pledge has been challenged in some places where coal power is packaged as a ‘clean energy project.’ In addition, state planners issued their first high-level opinion on greening the BRI in March, outlining a dozen areas of cooperation in transportation, industry, and infrastructure.”
Hydropower continues to be a controversial issue. China has financed a lot of hydropower facilities in the Mekong Delta and in Africa. But they were largely built before the launching of the BRI in 2010. Today, under BRI, hydropower is still considered part of green energy cooperation.
“I participated in an environmental and social impact assessment of a Chinese company’s overseas hydro project in Azad Kashmir,” Liu continues. “Chinese companies do carry out such assessments, not just at the site but also increasingly covering the river basin. Can the standards for environmental and social safeguards be further improved? Absolutely, yes. Meanwhile, it is worth noting that the wind is changing. Large-scale energy infrastructure projects like traditional coal—and even gas power plants and mega-dams—are no longer the main focus of China’s overseas energy investment. Clean energy like wind and solar are becoming the next big push of the green BRI.”
The Role of Europe
Although China has suspended climate discussions with the United States, such talks continue with Europe. “I haven’t heard of any formal door-closing to the Europeans, compared to what I hope is temporary with the United States,” Turner reports. In February, France became the first country to partner with China on third-party intergovernmental infrastructure deals, inking an agreement to build seven infrastructure projects worth $1.9 billion in Africa, Southeast Asia, and Eastern Europe. China has separate investment deals with a number of Eastern European countries.
“Compared to the United States, Europe is viewed as relatively less hostile on climate cooperation policy not only by Chinese policymakers but also civil society and the public in general,” Liu points out. “Most of the time, Europe is not perceived as aggressively pushing China to do this or that, while we see the United States ‘urging’ China to take actions on many things. In fact, Europe is seen as a mediator in the bipolar conflict. It pushes the climate agenda forward without creating a triangular position in climate diplomacy. There is less competition in clean technology. We see fewer trade wars initiated by the EU than by the United States.”
But this is changing, she adds. “A proposed forced labor ban will be discussed very soon. Last year, there were sanctions from both the United States and Europe related to Xinjiang, and all this has had impact on climate cooperation.” Other tensions have emerged. In September, Chinese climate envoy Xie Zhenhua chided Europe for backsliding on its Paris commitments by increasing its use of coal to offset the reduction of imports of Russian oil and gas.
The war in Ukraine has indeed introduced a new dynamic into China’s relationship with Russia, Europe, and the United States. China imports a significant amount of energy from Russia—around 15 percent of its oil and its coal plus a good portion of its natural gas. Those purchases spiked over the summer as Russian sales to Europe dropped, and the Kremlin was cutting its prices. Beijing has also financed several energy projects in Russia as part of BRI—including a significant stake in Yamal LNG, the northernmost natural gas facility in the world.
But Chinese energy needs have also declined overall as its economic growth has slowed over the last year. “China’s actual fossil fuel imports from January to August this year dropped significantly,” Liu notes. “Meanwhile, China is ramping up domestic production of coal, oil, and gas to substitute for overseas imports. Energy security in China means gaining as much energy independence as possible: holding the rice bowl of energy supply in our own hands, as Xi Jinping said last year. China’s dependency on energy supply from Russia is very small compared to European countries. For instance, 70 percent of natural gas in Germany comes from Russia, while China has been diversifying its fossil energy imports to several dozens of countries.”
According to one dominant narrative, China is the spoiler when it comes to the environment. It is the largest emitter of carbon in the world. It continues to rely heavily on the most polluting source of energy, coal. And it builds and finances huge, energy-intensive projects around the world.
But China is often blamed for the same sins of which the West is guilty. “The United States used to build big dams,” Jennifer Turner points out. “The World Bank used to build big dams. We don’t any more, but China based its hydropower construction on the U.S. model. U.S. government experts helped site the China’s Three Gorges Dam until they decided not to be involved in it.”
Liu Hongqiao cites the issue of the “debt trap,” the contention that China loans money to other countries with the intention of taking possession of the funded projects, like ports, when the recipient government defaults on the loans. “Many studies have confirmed that the ‘debt trap’ is a myth,” she notes. “Also, China’s development finance is demand-driven. If China’s development banks didn’t loan the money, other banks and financial institutions would. The difference is that often Chinese public financial institutions provide lower interest loans than Western commercial banks and the World Bank. Also, they operate in high-risk zones where other financial institutes refuse to take the risks.” On overseas coal finance, China’s public finance only makes up a small share despite China being the largest bilateral creditor.
Organizations working on questions of debt relief, Tobita Chow reports, “repeatedly run into the narrative that the problem is China. And that has become an excuse that Western actors will use to block progress on debt relief. In many cases, countries supposedly in a debt trap to China owe far more debt to Western banks and other private creditors.” African countries owe Western creditors three times what they owe China, and are being charged double the interest, according to a report this year from Debt Justice.
The politicizing of these narratives, Liu continues, distracts attention from many critical issues. “We have heard so much about China controlling, dominating, and weaponizing the critical raw material supply chain,” she says. “But we don’t hear much about how we can improve and elevate the value-chain of rare-earth or other materials so that resource-abundant countries—like China in the case of rare earth elements or the DRC in the case of cobalt—can benefit from the booming clean energy industry by moving up the value chain.”
“How do we respond to this dominant narrative that China is not a reliable partner on climate?” Chow asks.
“It’s a dated argument,” Turner responds. “Yes, China could probably move even faster on renewable energy. True, there’s been some slippage because with recent power outages, China is building more coal-fired power plants. But at least half of the existing coal-fired power plants are not being used or hardly being utilized, so this was very much a political move.”
“Some coal-fired plants that were already in the pipeline and had already completed preliminary studies were recently approved, but the current fleet of coal-fired plants operates below 50 percent of its designed utilization capacity,” Liu agrees. “The designers of China’s energy transition believe that the country’s young coal power fleet—with an average age of 15-16 years—would stay around for a long time, so why not use them to provide greater stability to the grid by improving fuel efficiency, reducing emission levels, and lowering their operational hours? The rational thinking behind this controversial ‘clean coal’ strategy that China has taken for its energy transition is not well understood in the global push for a coal phase-out. The trend provides some optimism: Coal use will peak very soon if it hasn’t done so already. China is marching to peak carbon emissions way ahead of the 2030 deadline.”
“Or take the example of solar panels,” Turner adds. “China flooded the world with cheaper solar panels. There were complaints that they were so cheap in order to undercut U.S. manufacturers. But those cheap panels enabled part of the global transition to clean energy. Also, as many studies have demonstrated, the jobs—75 percent of them—are where clean energy installed, so it it doesn’t matter who makes it.”
But what ultimately undermines the narrative of unreliability are the concrete interests that undergird the climate commitments of Chinese leaders.
“One factor that Jennifer mentioned is the rise of pollution protests in China,” Tobita Chow notes. “Since one of the top priorities of the government is to maintain social stability, shifting away from highly polluting industries can be understood as addressing that goal. Hongqiao mentioned that shifting to renewable energy is a strategy to increase China’s energy security. A third motivating factor is that China sees an opportunity to build soft power by positioning itself as a global climate leader. During the Trump period, China made a strong push when it became clear that the United States is not most reliable leader. This was an opportunity for China, particularly in the Global South.”
FPIF, November 2, 2022