Analysis: Towards a new framework for climate coordination

This is Part 2 of a series on how the UK can engage with China on climate change, published during the landmark COP26 talks in Glasgow. You can read Part 1 here.

“Too many countries are still doing too little” was Prime Minister Boris Johnson’s assessment ahead of the long-awaited COP26 summit this week.

Yet climate diplomacy is becoming increasingly complex, given the environment of heightened geopolitical competition, the economic damage of the pandemic - and the pressure of the need to move faster on the green transition.

The era of Xi and Obama shaking hands over climate deals looks to be over. What role can the UK play in persuading the major climate actors to live up to commitments made at the Paris Climate Conference six years ago?

Climate change as a British policy priority

The UK was the first major economy to enshrine a net zero target into law. The recent publication of its ‘Net Zero Strategy’ saw the government reaffirm its commitment to reaching this target by laying out an ambitious roadmap of policies and proposals for decarbonising all sectors of the economy. 

Tackling climate change has widespread public buy-in: Britons rank the environment as one of their top three ‘most important issues facing the country today’, ahead of Brexit, immigration and crime. 

Under this government, the UK has also afforded high priority to climate diplomacy, designating it as the country’s “number one” diplomatic priority. In Paris in 2015, Britain joined a group of 20 countries that pledged to double spending on cleantech R&D and has increased international climate finance to developing nations by 50%, to £11.6 billion between 2021/22 to 2025/26. 

The UK may be a climate leader, but there are clear areas for improvement. The Paris Agreement only holds the UK to account for emissions within its borders: for every tonne of carbon released within the UK’s borders, more than half a tonne of carbon is released overseas to produce goods and services consumed in the UK. The irony of freezes on fuel duties and tax levies on domestic flights - announced during last week’s Budget - on the eve of a once-in-a-generation UK-hosted climate summit wasn’t lost on climate observers.

The importance of COP26 (and China)

COP26 matters because it is a key test of faith in multilateralism through the United Nations Framework Convention on Climate Change (UNFCCC) system. The UK and its allies believe that the summit can herald progress on moves to phase out coal, halt deforestation, phase out the internal combustion engine, and provide climate finance to developing countries. China will play a pivotal role in all of these areas.

Some have argued that convincing Chinese President Xi Jinping to attend COP26 would be the test of Britain’s success as a host nation. Whilst Xi will not be in Glasgow this week, his non-attendance does not squarely equate to Chinese non-participation and non-engagement. The real test is to persuade China to commit to a tougher, more detailed roadmap for cutting carbon emissions, whilst avoiding a geopolitical blame game that could lead to the stalling of vital climate action.

Hopes for a formal submission of ramped up NDCs by China were dimmed last week as Beijing merely reaffirmed its commitment to peaking emissions before 2030. However, British climate negotiators are still optimistic of some progress: COP attendees will stress that Beijing needs to bring this forward for the world to hit its 1.5C goal. “China has surprised us many times before and they could again,” said one official last week.

A space to deepen cooperation?

If COP doesn’t deliver, how should the UK look to work with others with its climate diplomacy moving forwards? And how can the UK and its allies work to devise strategies to engage with geopolitical competitors on climate change?

Firstly, it’s worth reiterating that cooperation is still achievable, even in a tense geopolitical environment. It is particularly possible in areas such as green finance, which needs to be considerably scaled up to reach the 1.5C target, and capacity building.

At the UNGA, President Biden agreed to double the US’s commitment to climate finance to $11.4billion by 2024. The UK is part of the OECD group that agreed to jointly mobilise $100bn per year in climate finance to developing countries from public and private sources and pledged around £5.8bn of international climate finance between 2016 and 2020. 

However, the base of donors must expand beyond this select group of countries to effectively support countries most in need. Green funding experts from the UK and China have previously come together to explore ways of integrating green finance into Belt and Road projects. Such projects could be scaled up to promote green economic growth in the developing world whilst producing returns for private sector groups from both nations.

Transnational research exchange has continued to yield hugely beneficial progress on climate change. Partnerships have flourished as various organisations and scientists pooled ideas and resources: schemes such as the Climate Science for Service Partnership China project have been vital in modelling extreme weather scenarios in both the UK and China according to existing climate risk metrics.

Why high-level cooperation might prove a stumbling block

However, the underlying challenge is that climate is not an issue that can be siloed from the wider relationship. Climate change is a global problem, and climate change action is inherently geopolitical. 

The economic transition required to meet net zero will require mass adoption of renewable technologies, reshaping global supply chains. And the impacts of climate change itself will disproportionately affect geographically vulnerable countries.

It is impossible to separate the undertones of geopolitical competition from climate negotiations. Chinese Foreign Minister Wang Yi said himself that climate cooperation “cannot be divorced from the overall situation of China-US relations." 

That doesn’t necessarily mean that China will look to extract concessions in return for climate action. But geopolitics affects the decisions that countries make on energy. There’s a risk that tense geopolitics spilling over into the realm of climate will encourage China to seek energy self-sufficiency through coal. And in the broader geopolitical context, the rise of domestic nationalism means that it is also politically unfeasible for Xi to be seen to be making generous climate offerings that are seen to be the direct result of foreign pressure.

For the Chinese delegation attending COP26, its preparations won’t simply be about ways in which to reduce emissions. Beijing will look to give itself as much flexibility as possible in how it achieves its climate goals whilst preserving its reputation as a global leader in decarbonisation: it has consistently insisted that 1.5 is ‘aspirational’ and not a treaty obligation. Xi himself stressed this week that developed countries should do more and take on more of the financial burden of decarbonisation, also known as the “you broke it, you fix it” position.

However, even without COP talks resulting in formal cooperation, there exists a multitude of incentives - explored in the first analysis of this series - for Beijing to pursue more substantive climate action, the by-product of which will be bringing the world closer to its overarching 1.5 goal.

Working with allies and engaging in healthy competition

The upside is that this era of strategic competition can yield positive universal climate results. Moving beyond the false dichotomy of cooperation and competition allows us to see the positive spillover effects of deeper competition.

Alex Wang, a leading expert on environmental law of China at UCLA, contends that like-minded democracies and China could have a positive impact on the overall climate situation outside the bounds of official cooperation through ‘constructive competition’.  As he argued during our recent COP26 event, this is now a viable route because we are now in the implementation phase of climate change. There is already widespread consensus on the problem of climate change.

More concretely, one way constructive competition could play out is a renewables ‘race to the top’. Greater public investment in the research, development, and deployment of clean, green technologies will aid the provision of affordable and commercially available carbon-reducing technology, breaking down the trade-off between economic growth and sustainability. 

One litmus test will be the impact of the US Innovation and Competition Act, which is waiting to be passed in Congress. This Act aims to consolidate the US’ position as a global science, technology, and manufacturing leader, backed by more than $100bn of funding. It represents an example of how industrial competition with China could spur innovation. 

Another example is the rise of interest in securing supply chains. The EU, G7 and Quad have all dedicated time to discussing the strengthening of supply chains, which should encompass technologies required to reach carbon neutrality, such as magnets, batteries, high-performance ceramics, and light-emitting diodes. This could pave the way for greener production of raw materials in countries with high environmental regulations, perhaps driving more sustainable production practices in countries like China.

An assembled coalition could also use carbon taxation - a levy on goods or services corresponding to their carbon footprint - to pressure Beijing to cut emissions. The EU has led the way by publishing a proposal for a mechanism (known as CBAM) that will force EU businesses to pay a carbon levy for goods they import from outside the bloc. Whilst the proposal drew complaints of discrimination from Beijing, researchers from Tsinghua University’s Centre for Industrial Development and Environmental Governance found the impact would fade over time and there was no evidence the tariff would have a long-term adverse impact on China's development.

To ensure that smaller, less developed countries don’t fall further behind as a result of such tariffs, the UK and its allies will have to put together a substantive financial package to aid the green growth and infrastructure needs of the world's poorest and most climate-vulnerable countries. At the moment, this lack of solidarity on the part of wealthy nations gives China - a self-proclaimed champion of the developing world - a protective shield from criticism of its own emissions misdemeanours. 

But crucially, for competition, putting forward an alternative offering would challenge Beijing to double down on renewables investment across the BRI and clean up its emissions domestically, without the need for antagonistic rhetoric that could inhibit constructive dialogue.

Tackling climate change will involve global problem-solving on an unprecedented scale. The ability to find a way to cooperate with China on joint, practical problems such as climate, when broader cooperation has stalled, will be in sharp focus in Glasgow. However, should formal cooperation mechanisms fail to be established, all is not lost. The UK has the opportunity to play a leading role in brokering a global approach to climate action that will consist of keeping certain avenues of cooperation open, complemented by a dose of healthy competition.