Carbon Critical

March 30, 2021

Keeping the World Cold

When it comes to climate policy, coal power and the EU’s proposed carbon border adjustment mechanism will likely cause friction within the EU-US-China triangle this year. But all sides have shown that they can work together.

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A graph showing the global share of CO2 emissions 1750-2017

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Climate change isn’t fair. Emissions from decades past are endangering children yet unborn. The richest have burned the most fossil fuels, yet the poorest will suffer the most. One country’s inaction can harm people everywhere. In the already tense relationship between China on one hand and the United States and the European Union on the other, the question of fairness in climate mitigation has been yet another source of conflict.  

Do as We Say, Not as We Did

Both sides started from very different points on the road to net zero. The Americans and the Europeans together are responsible for nearly half of the carbon dioxide humans have ever released into the atmosphere. Emissions have already peaked in both places, and so emissions targets are expressed as percentage cuts since a base year in the past.

China is literally in a different category, qualifying as a “developing country” under the Paris Climate Agreement. At the moment Chinese emissions, 28 percent of the global total, are not falling at all—they actually increased in 2020 despite the coronavirus lockdowns. The government aims to have emissions peak before 2030.

This is the context in which statistics about China’s huge climate impact must be understood. For instance, China pours more cement every two years than the US did in the entire 20th century. But much of that cement builds high-rise towers of small apartments for China’s 1.4 billion people, whereas Americans prefer to live in sprawling single-family homes, one reason why Americans’ carbon emissions per capita are still about twice as high as China’s.

While China did add three times as much coal-fired power generation in 2020 as the rest of the world combined, hundreds of millions of its citizens still cook with dirty biomass and would be delighted to have a fossil fuel-powered stove installed, or enough cheap energy to carelessly leave the heat on. It’s easier for Europeans to preach the virtues of replacing fossil fuels because so many Europeans already consume as much energy as they want.

Fortunately, both sides have made good progress on the fairness issue since 2009. In that year at the Copenhagen climate summit, China helped block a proposal to commit all countries, rich or not, to cut global emissions by 50 percent by 2050. German Chancellor Angela Merkel appealed in vain, pointing out that developing Asian countries would have to chip in eventually. Chinese negotiator He Yafei refused, claiming “whoever created this problem is responsible for the catastrophe we are facing.” He was talking, of course, about the West. The talks fell apart.

Eleven years later, President Xi Jinping proudly announced that China is aiming for “carbon neutrality” by 2060, and the EU and US aspire to a similar goal. So, China will soon begin reducing its own emissions. The question now is how China reacts to Western climate policies that could slow its economic rise.

CBAMs and Coal Power

Two climate policy issues are likely to cause the most friction in the China-US-EU triangle this year. First, the carbon border adjustment mechanism (CBAM). Later this year the European Commission will propose a measure for taxing imports of carbon-intensive goods, which could eventually disadvantage Chinese and American producers. Concerned about the CBAM’s impact on America, US Special Presidential Envoy on Climate John Kerry said on his recent Europe trip that he hoped the policy would be only a “last resort.” A Konrad Adenauer Foundation survey of Chinese experts reports that “China will likely oppose the EU CBAM and there is a potential for the mechanism to spark a trade conflict.”

Ideally the three giant economies would form a “climate club,” agreeing to align their carbon pricing measures in order to avoid applying the CBAM on each other’s exports. Realistically this is a massive political challenge. If the relatively green-thinking European Parliament cannot agree to stop giving European industry free carbon permits to make an EU CBAM work, it’s hard to imagine that American and Chinese policymakers would ask Rust Belt manufacturers or steelmakers from Hebei province to make any sacrifices. The US still has no national carbon pricing scheme, and China only recently launched a weak carbon intensity trading scheme for the electricity sector, which puts no cap on carbon emissions. It might be possible one day for a climate club to recognize different complex carbon pricing measures as equivalent, but then China is not known for its transparency, nor the US for its eagerness to follow international standards.

Second, coal power. Now that coal is dying in the US and Europe, the focus is shifting to hindering the construction of new coal plants abroad—some Western financial institutions still support these. In January US President Joe Biden ordered his government to “promote ending international financing of carbon-intensive fossil fuel-based energy” just days after EU foreign ministers had called for EU energy diplomacy to pursue “an immediate end to all financing of new coal infrastructure in third countries.”

On this front, China is the black sheep. It plans to build much more coal power at home despite its net-zero target, and in recent years it has dominated the financing of coal plants around the world. While there are some signs that China may be reconsidering—the China-led Asian Infrastructure Investment Bank pulling out of coal, China telling Bangladesh it will no longer support coal projects as part of the Belt and Road Initiative—Beijing will be tempted to keep supporting coal for political and geopolitical reasons. The fairness argument might raise its head again here: China can argue that its banks and companies are helping out poor people and countries that never fully carbonized in the first place. Americans and Europeans may not be burning much coal today, but vast quantities of it are embedded in the highways and skyscrapers that supported their rise to wealth and power.   

A New START for Climate Summits

Perhaps climate diplomacy can play the role in the great power relationships of the 21st century that nuclear arms reduction did in the 20th, with meetings between climate experts becoming the new Pugwash conferences. Like the threat of nuclear war, climate change demands cooperation to avoid outcomes that threaten the entire globe.

No matter how high tensions rise over the Uyghurs or Taiwan, the Chinese, the American, and European governments will face pressure from their publics to keep communicating about the climate crisis. It’s a good sign that, despite recent sanctions, China, the US, and the EU were able to hold “normal” climate talks at the China-hosted Ministerial on Climate Action on March 23. There is no new Cold War—there is a shared battle to keep the Earth cold.

Noah J. Gordon is INTERNATIONALE POLITIK QUARTERLY’s climate columnist.

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