Analysis: Where does China stand on climate change ahead of COP26?

According to the Intergovernmental Panel on Climate Change, the world is on track to warm by around 3°C by the end of the century - a rate and magnitude of change that climate scientists warn could be cataclysmic. Global climate change has become the collective problem of our era.

China is currently the world’s largest emitter of greenhouse gases, responsible for nearly 30% of the world’s carbon dioxide emissions (to the UK’s 1%). President Xi Jinping’s pledges last year to freeze emissions growth by 2030 and achieve carbon neutrality by 2060 signalled a renewed commitment to weaning China’s economy off fossil fuels and playing a leading role in the global fight against climate change. Speaking remotely at the UN General Assembly in September, Xi also promised to end financing of new coal power plants overseas. 

However, climate experts have suggested that Beijing’s commitments - whilst welcome - will not be enough to achieve the 2015 Paris Agreement’s aim of limiting global warming to 1.5°C, unless action before 2030 is radically stepped up. Responses to recent energy shortages indicate that Beijing will be inclined to deviate from its long-term climate goals in the face of immediate economic and political instability. 

Climate talks at COP26 in Glasgow represent a major opportunity for countries to ratchet up commitments to reduce national emissions, known as nationally determined contributions (NDCs), and adapt to the impacts of climate change. Whilst Xi has all but confirmed that he won’t attend the summit in person, the world cannot win the fight against climate change without understanding China’s complex climate challenges, nor without Beijing taking concrete steps towards a significant reduction in emissions.

Beijing’s incentives

Beijing has shown a steady determination to demonstrate its own climate credentials following the official departure from Deng Xiaoping’s maxim of ‘hide your strength, bide your time’ that can be traced back to the Chinese Communist Party’s 2014 Central Conference. Climate has since been seen as a vehicle through which to showcase China’s global leadership credentials. Xi’s newfound desire to cultivate an image of China as a responsible climate actor was given further impetus during the Trump era in which the US - the world’s second-largest emitter - extricated itself from climate leadership. Going low carbon has been seen as a strategic opportunity since the Paris Climate Conference, where China became the first major carbon emitter to ratify the ensuing agreement. 

Xi has deliberately sought to differentiate China’s approach from traditional Western notions of liberal environmentalism. The CCP has factored in long-term market incentives into its model of environmental authoritarianism - in which there is limited space for the participation of civil society and environmental NGOs in shaping climate policy - and has pursued a top-down ‘New Normal’ model of economic development. 

This new model has entailed a shift away from energy-intensive export industries towards services and domestic consumption, going hand-in-hand with a nascent industrial policy aimed at propelling China up the value chain. China is already leading the way in renewable energy production figures. It is currently the world’s largest producer of wind and solar energy, and the largest domestic and outbound investor in renewable energy. Sensing the immense economic opportunities of going green whilst reducing its dependence on energy imports, China is well placed to be the major beneficiary from the growing demand for cleaner technologies.

Beijing’s self-interest with regard to climate change extends to the growing realisation within its government that China is especially vulnerable to its harsh consequences. China’s Third National Assessment Report on Climate Change - based on work by more than 500 experts at China’s Ministry of Science and Technology, amongst other central departments - found that China faces significant threats from sea level rise, severe weather events, and air and water pollution. 

The costs to the Chinese population of environmental degradation and pollution have become increasingly tangible as GDP growth has decelerated. Pollution in urban areas can be attributed to petrochemical and heavy metal production, as well as the burning of solid fuels like coal and wood (44% of air pollution deaths are from household emissions), whilst China’s countryside is even worse affected due to the excessive application of fertilisers and pesticides. Twelve northern provinces, with roughly half of China’s industry, power generation, agriculture and population, suffer from water scarcity: analysts have posited that schemes to shift water from the south, including the North-South Water Transfer Project, are merely sticking plasters. 

A 2020 study revealed that 70% of Chinese citizens worried about climate change more than education, economic development and anti-terrorism. Because tackling environmental degradation must take place at local levels and involves wide-ranging structural changes, the adoption of new daily practices, and mobility patterns, it’s encouraging for Beijing that there is likely to be public support for more substantial measures to tackle climate change. The other side of the coin for the Party is the risk that shock climate events - the type of which it has had a flavour of with Beijing’s ‘airpocalypse’ in 2013 and the Shanxi floods that displaced some 1.76 million people only weeks ago - could lead to wider social unrest.

Carbon dissonance

Despite signalling a shift towards being a first-mover on green technology and multilateral climate agreements, the rate at which the CCP tackles emissions and the methods employed to do so will be analysed more scrupulously than ever. There has already been debate amongst China-focused environmentalists over China’s 14th Five-Year plan, unveiled earlier this year, which failed to include a definitive carbon emissions or coal usage cap. 

China may be surging ahead in clean energy development and the preservation of biodiversity, but it’s also - by a distance - the world leader in coal. This year, the number of coal-fired power stations granted approval globally has risen for the first time since 2015 – with China making up two-thirds of all plans for the heavily polluting plants. China was also the only major industrial power whose carbon emissions rose during the 2020 global pandemic-induced recession - the competing incentives of GDP growth and optimal climate change policies makes it difficult for both central authorities and local governments to adhere to strict targets, despite Xi’s emphasis on ‘quality growth’.

Powerful stakeholders in the coal industry, most notably the network operator State Grid and industry body China Electricity Council, have been successful in lobbying the government to raise the emission caps it set to mitigate against the most damaging impacts of pollution. A traffic light system, introduced in 2017 to reduce overcapacity amongst coal-burning, loss-making state-owned enterprises was loosened this year, with many SOE-driven coal power projects given the go-ahead domestically as China’s economy stagnated. More recently, power shortages across 20 provinces led to calls for more coal supplies and appeared to prompt policymakers to rethink the pace of the nation’s energy transition. This wasn’t the first time the importance of coal as a reliable failsafe has been signalled from the very top - Premier Li Keqiang emphasised the ‘core role of coal’ at the unveiling of a new energy security strategy in October 2019.

The past year has seen the announcement of major infrastructure programmes and other stimuli to offset the economic impacts from COVID, but initiatives prioritising clean energy have been lacking in number and impact. Whilst the launch of the Emissions Trading System (ETS) in July was seen as a key symbolic arm of the CCP’s domestic climate change push, it has faced criticism for lacking teeth given the absence of a total emissions cap and current exclusion of polluting sectors such as steel and cement. 

A recent study by Columbia University’s Centre on Global Energy Policy revealed that only ‘modest progress’ has been made in target-setting in China’s high-emitting industries - coal electricity generation, cement, and steel - since the announcement of the ‘30-60 pledge’. Beijing has been willing to talk the talk on policy production, but as yet has struggled to walk the walk on output and implementation. A more precise roadmap for cutting reliance on fossil fuels, revealed by Chinese state media ahead of COP, provides renewed optimism that China will deliver on the industrial restructuring that will be imperative for lowering emissions.

Internationally, Belt and Road projects creating foreign markets for Chinese (predominantly steel) overcapacity have tended to be rooted in high-carbon infrastructure: more than 60% of BRI-specific energy financing has gone toward nonrenewable resources. This affinity for coal as a key symbol of Chinese strength across the BRI has counterbalanced the rapid increase of Chinese involvement in large-scale renewable-energy infrastructure projects. Local officials, often significant, profit-motivated foreign policy actors across the BRI, have consistently funded overseas coal projects that are not being included in China’s emissions figures. 

Xi’s assurances at the UNGA left climate negotiators optimistic that this would become a trend consigned to the past but it’s not yet clear whether phasing out of coal will happen quickly enough. Fears remain that the CCP will struggle to propel China to global climate leadership due to the actions of individual actors and countervailing strategies to secure China’s global market positions, and that Xi’s attention will be consumed by ensuring political stability ahead of the 20th Party Congress next year.

Engaging with China at COP26 and beyond

What does this mean for engaging with China on climate and Beijing’s approach to climate multilateralism? Among many, these are crucial questions to explore ahead of the UK-hosted summit.

On the surface, it appears difficult to exert external pressure on Beijing to implement substantive climate policies given its track record of pursuing an ecological nationalism driven by domestic concerns. Short-term stability seems destined to trump concerns over climate - especially during periods of socioeconomic uncertainty.

However, it’s clear that the CCP has underlying long-term incentives to tackle climate change, even if Xi wishes to avoid accusations of buckling to international pressure from an increasingly nationalistic domestic audience.

The second article in this series will - with the backdrop of COP26 and the UK’s role as a global climate leader in mind - submit that ‘official’ cooperation between like-minded democracies and China is not necessarily critical to achieving climate progress, and that China’s domestic interests aren’t mutually exclusive to our COP26 goals.