Latest Developments in Global Climate Politics and China’s Role Therein

A comment of Thomas Hirsch, Founding Director of  Climate & Development Advice.
 
The Paris Climate Agreement marks a milestone and major success in international climate politics. After years of difficult negotiations, a well-balanced multilateral agreement was achieved, consisting of three major landmark components:

• Agreement on global long-term goals and the modalities of national determined implementation:
  • To limit global warming to well below 2°C, and if possible, to 1.5°C;
  • To increase the ability to adapt and to foster climate resilience;
  • To make financial flows consistent with the aforementioned goals.
• Agreement on enhanced international cooperation, technology transfer, capacity development, and the mandatory provision of financial support by developed country Parties to assist developing country Parties to ambitiously implement the Paris Agreement, and the encouragement of other Parties to provide voluntary support;
• Agreement on a multilateral transparency framework for action and support, as an indispensable prerequisite to build mutual trust among Parties, promote effective implementation at lowest possible transaction costs for all, measure achievements, and support accountability and compliance.

The Agreement can be called historic because it provides, for the first time, a comprehensive and facilitative global framework for action on the challenge of climate change, which cannot be solved by any country individually, but only through international cooperation. The Agreement is beneficial for all Parties, since it helps to systematically identify, understand, and address climate-induced risks; And it has the potential to spur scientific progress, technical innovation, sustainable investments, lifestyle change and economic transformation.

The Agreement is a great success of multilateralism. Political leadership has been provided by a significant number of countries, quite diverse in terms of national circumstances, but united in their common interest to limit global warming and its adverse impacts: This included a range of countries, from small developing island states (SIDS) to industrialized European countries. However, let us also emphasize in particular the dual leadership of China and the U.S., which played a pivotal role in 2015 to give birth to the agreement.

In 2018, the geopolitical landscape is different, but climate negotiations continue, along the agreed agenda, aiming at elaborating the necessary operational instructions, before Parties can start to implement their Nationally Determined Contributions (NDCs). For the upcoming sessions in Bonn in May, and COP 24 in December in Katowice, the main challenges are to finalize the Implementation Guidelines of the Paris Agreement and to successfully hold the Talanoa Dialogue, a first informal global stock-take. Both are of crucial relevance to ensure transparency of climate action under the Paris Agreement. In addition to these negotiation priorities, and with a view to the action stream of the COP, further climate finance pledges of developed countries, green investment announcements from the business sector and developing banks, announcements of Parties to scale up the level of ambition of their pre-2020 action and NDCs, and the timely communication of Long-term Strategies, in accordance with article 4 of the Paris Agreement, would foster the momentum needed to closing the still huge emission gap, currently leading us to a 3.2°C global temperature increase.

Who will lead in 2018? Many of the most climate vulnerable countries, including in particular Small Developing Island States, continue to take a lead. That could be observed recently on the occasion of the London conference of the International Maritime Organization (IMO), where Pacific Island nations, supported by the EU and France in particular, opted for the most ambitious emission reduction target, despite the fact that they also belong to the most shipping-dependent economies, and the biggest flag-states. Their slogan: “Prioritize existence over economic growth!” Apart from them and other poor developing nations belonging to the so-called Climate Vulnerable Forum (CVF), leadership must also come from G20 members, which as a group are responsible for almost 80% of current annual emissions.

The announcement of President Trump to withdraw from the Paris Agreement, which is expected to bring more harm than benefit to the national economy of the U.S., has left space for other countries to engage as leaders. It is notable, that no other Party has followed the U.S.: The Paris Agreement, despite different notions, is apparently considered by government not only as a necessity, but also as an opportunity. Therefore, leadership will be awarded.

In the longer run, in the post-Trump period, it seems to be a realistic scenario that the U.S. will return to the Paris Agreement, as recently said by the former Special Envoy for Climate Change, Todd Stern. If other Parties agree with the view that it would be preferable that the U.S. must be in with both feet, to make the regime effective over time, it is recommendable to other G20 climate leaders not to re-introduce the bifurcated approach of annex 1 versus non-annex 1 in the Implementation Guidelines, also called rulebook, since this might create a barrier for re-entry. This so-called firewall between developed countries (annex 1) with mandatory obligations and developing countries (non-annex 1) with discretional obligations was thought to be overcome by a more nuanced differentiation in the Paris Agreement, but controversial discussions have come up again in negotiations since then.

The main question with regard to the rulebook will therefore be, if there would be two sets of guidelines, one for developed countries, and another one for all developing countries, including powerful G20 members like China or India, and wealthy oil-exporting countries, like Saudi-Arabia, or if there would be only one set of rules, but with a certain flexibility, at least in an initial phase, specifically for countries which are still lacking the capacity to comply with unified standards. Western countries will continue to argue in favor of a single set of rules, but with flexibility to address different national circumstances, as it is the case in other international regimes, for instance trade regulations, too. They make the point that such a regime is more transparent, with lower transaction costs for all parties, and that it can address differences in a more nuanced way than a fixed firewall. It is a very important question how China will finally engage on this issue. The answer to this question will indicate to the world which type of global climate leadership the country intends to take.

A similar question is related to China’s engagement in the Talanoa Dialogue (TD). In the Chinese submission on the TD, the expectation is expressed that the dialogue should be comprehensive, balanced, facilitative and constructive, in order to facilitate ambitious actions and extensive cooperation. It is also said that international cooperation should be guided by the principle of common but differentiated responsibilities and respective capabilities (CBDR-RC), a term, closely associated with the firewall approach, while the approach of different national circumstances, a buzzword from the Paris Agreement to address differences between countries in a more flexible way, is not mentioned. The original cultural meaning of Talanoa, in its South Pacific context, is a form of dialogue, where story-telling is being used as communication technique to truly understand each other, including fears and expectations, in order to resolve problems and build relationships. Thus, leadership requires to openly share views, what is very different to the usually very tactical COP negotiation mode.

Ambitious climate leadership in terms of practical action could be demonstrated by communicating national Long-term Strategies (LTS) for low-carbon, climate resilient pathways, aligned with the implementation of the SDGs, and guided by the long-term goals of the Paris Agreement. LTS are of critical importance for informing short and medium-term policies and investments, and for preventing lock-in effects, especially with regard to infrastructure investments. China, as the world’s largest greenhouse gas emitter, so far has no explicitly named Long-term Strategy, but has national emission limitation targets and a rather comprehensive policy framework. In view of China’s very long, culturally rooted, and impressively successful tradition of comprehensive long-term planning, the question occurs if and when the country will communicate its LTS to the UNFCCC. Such a step would very likely encourage other G20 members, who have not yet communicated their LTS, to follow.

President Xi Jinping championed for low carbon development and defended the Paris Agreement at the World Economic Forum in Davos in 2017. He also expressed China’s readiness to take more global responsibility at the 19th Party Congress. To realize the “Chinese Dream”, including the 2035 Strategy, a green transformation, less coal and more renewables and energy efficiency seems to be indispensable. China’s NDC indicates that the government is very serious about moving toward a comprehensive framework for addressing GHG at all levels. Still, however, the NDC has limitations in terms of measurable targets, and it is not yet very clear to the outside world, how China intends to implement its NDC. Thus, to be recognized as a climate leader in the implementation phase of the Paris Agreement, China may consider to step up its NDC respectively. That would be internationally honored as a strong expression of global leadership. Leadership is always a combination of soft and hard power. While China has a lot of technological and economic hard power, as we can see for instance in the renewable energy and electric mobility sector, its soft power, generated by globally convincing narratives, values and political attitudes is less strong.

Given the short time that remains to avoid irreversible dangerous climate change from happening, according to latest science, massive shifts of investments from brown to green are indispensable, nationally and internationally. Strategic investments in line with the Paris Agreement can boost technology development and economic prosperity, while at the same time avoiding stranded assets. Unregulated markets alone will not provide the necessary incentives. Long-term planning and enabling regulatory frameworks, as for instance carbon pricing, need to provide guidance, at home and abroad. The Chinese government has all the instruments at hand to make that happen. In 2017, China was the single most important market for renewable energies (40% of the global market), leading to a 10% share of electricity provided by renewables in the country. Still however, existing investment instruments hardly meet the growing demand. The recently created China New Energy Assets Financing and Investment Platform, in combination with other instruments, may help to overcome this gap. Abroad, China has also become a major provider of foreign aid and investment for power and infrastructure projects, as for instance related to the “One Belt, One Road” initiative and the Asian Infrastructure Investment Bank (AIIB). The recent announcement to establish a new agency for international development cooperation, and the bolstering of the Ministry for the Environment, being now responsible for the fight against climate change, will provide opportunities to spur the green transformation, and to strategically align investments with the goals of the Paris Agreement.

Standing alone, not a single country can prevent massive negative effects of dangerous climate change. Global commons, like the atmosphere, can only be protected by enhanced international cooperation. Moreover, in an economically mutually interdependent globalized world, isolation will never lead to stability and prosperity, despite the current global trend of increasing nationalism. Facing the climate crisis, deepened cooperation based on mutual interests is the only way forward: For the sake of future generations and today’s climate vulnerable people and ecosystems, but also to protect well understood national interests.

To agree on the Paris Agreement as an international policy framework was in the hands of heads of states, guided by a limited number of diplomats and experts. The due implementation of the Paris Agreement requires a much broader support everywhere in the world: Non-state actors, including the business sector, as well as the sub-national governmental level, including regions and municipalities, are decisive for implementation. In some countries, as for instance in the U.S. with its “We are still in” campaign, these actors are even ahead of the national governments in terms of support for the Paris Agreement.  This will lead, in the course of time, to new alliances and types of cooperation in support of the ambitious implementation of the Paris Agreement. True leaders should give room for that to happen.
Globally, a closer cooperation between China, the European Union, and climate vulnerable but ambitious countries is needed, to maintain the Paris momentum: While none of them will succeed individually, cooperatively they can move the Paris Climate Agreement forward, and later bring back on board the U.S. Together, they can mobilize a critical mass of hard and soft power. As a first step, China and the European Union, particularly the axis Paris – Berlin, with support and in close cooperation with other climate ambitious Parties, should jointly take the lead to make the Paris Implementation Guidelines and the Talanoa Dialogue successes.