Hamburg (Brussels Morning) President Biden signed a series of so called “existential” executive orders to “supercharge” Americas’ action on climate on Wednesday, January 27. Earlier this week, on Monday, China’s President XI Jinping addressed the World Economic Forum Virtual Davos Event, calling for global collaboration on climate change, public health, and technology. Almost at the same time, in a keynote speech at the UN-led Climate Adaptation Summit 2021, John Kerry, the newly appointed US Climate Envoy, warned that we are on track for climate catastrophe and called for fast-tracked, joint international efforts to tackle the twin crises of nature’s destruction and climate change.
It’s fair to say we have a consensus on the urgency of the crisis and we know better than to take that for granted.
The US rejoins the global consensus
In the Trump years, the international context on climate changed fundamentally. Some of the world’s largest economies made unconditional and unilateral pledges committing to carbon or climate neutrality, while the EU and China stepped up their strategic partnership on environment and laid the foundations for a climate friendlier reform of the global economic system.
Through Executive Orders on his days in office, President Biden is aligning the United States with the new international context. In an online event last week, former US Climate Negotiator Todd Stern noted that 2020 brought a “new consensus” on the 1,5 degrees objective, that is the best-case scenario envisaged in Paris.
That ambition presupposes an accelerated transition away from fossil fuels. International cooperation will be necessary and this calls on Washington and Beijing to look beyond their emerging strategic rivalry and great power competition.
Global coalition on climate neutrality
Cautious as they may be, Kerry’s first statements in his new role may hint at a move in this direction. Will common rules on decarbonisation defuse US-China power competition? Can joint deployment of technologies become the new normal? As Kerry reminded us “nobody has all the answers. The faster we gather information from each other, share data, the faster we can join together in the effort to do what we all know is necessary.”
China’s response
To shed light on the prospects for global decarbonisation and Sino-American dialogues on climate, Brussels Morning sat down with the ZHANG Jianyu, vice-president of Environmental Defense Fund (EDF) and international coordinator of the Belt and Road Initiative Green Coalition – BRIGC.
One of the leading Chinese experts on climate, ZHANG plays a key role in shaping dialogue on environmental action in and outside China. ZHANG is part of a small cohort of advisers whose input affects the strategy of China’s Communist Party (CCP) and its leadership. If China’s strategic objective is to build XI’s “ecological civilization”, ZHANG is one of the people responsible for laying out the milestones necessary to achieve the transition, not least China’s Carbon Trading System, the largest of its kind in the world.
Brussels Morning (BM): The EU and China are committed to multilateralism and to strengthening “bilateral” strategic cooperation on climate and the environment. The Comprehensive Agreement on Investment, as we discussed in a recent joint interview with China Daily, embeds climate provisions in economic agreements. This could be a game-changer for effective global environmental governance. Yet, this happens against the backdrop of heightened political differences between the West and China. What is your view on the status of EU-USA-China relations?
ZHANG: In recent years, the US retreated from the world stage. Currently, Beijing and Brussels together lead the conversation on global environmental cooperation. I am glad to see that in the China-Germany-EU leaders’ meeting last September, the two sides agreed to establish a China-EU High Level Environment and Climate Dialogue and a China-EU High Level Digital Cooperation Dialogue, to forge China-EU green and digital partnerships.
The EU is seen by China as a great partner and an important source of momentum. The latest example is that China is working on a long-term vision for tackling climate change by the middle of this century. It’s clear the long-awaited EU-China dialogue was a success and lays the foundation for greater cooperation going forward.
The China-EU cooperation also puts pressure on the US. I am expecting that after China announced the goals of “peak before 2030” and “carbon neutrality before 2060”, as the EU had announced the goal of “reducing emissions by at least 55% from 1990 levels by 2030”, the US can follow in the footsteps of China and Europe and effectively promote global climate action. President Bidens’ executive orders confirm my assumption.
Regarding the dynamics of international affairs, climate change is an existential global threat, as well as an opportunity to develop a more resilient economy. Sustainable industrial and technological systems could define the next stage of human development. This crisis can only be solved by the international community acting together. I am confident the EU agrees that common action to save the planets’ climate and ecosystems should be intensified.
BM: If implemented, the EU Green Deal and China’s pledge will lead to a systemic transformation of the two blocs’ economies. We are entering a new era sparked by a new energy revolution and a new industrial revolution.
The 14th Five-Year Plan will define the implementation measures for China. These (measures) are still being debated. Some in Europe doubt that China has the capacity or the political will to reach zero-emissions in such a short time. China’s energy matrix is heavily dependent on coal; and China invests in coal and fossil fuels abroad. How do you respond to this criticism, and what will be the technological and economic paths to achieve the 2060 pledge? You say it is possible to frame the BRI as a “unifying” rather than a divisive project for a climate neutral economy. How?
ZHANG: Firstly, I want to be very clear on this. As our international partners know, China has always delivered on its explicit commitments. President XI made a very clear promise. This may have come unexpected to some even within China. Some may have preferred a slower pace; but from the moment these words were pronounced the whole country, the Party, all levels of government, all SOEs (State Owned Enterprises) as well as private companies, began working to make sure our economy will be emissions-free by 2060.
Clearly, the transition to a carbon and climate neutral economy requires mammoth investments in the enabling infrastructures and large-scale deployment of technologies. China is moving in this direction. For instance, the Green Finance Committee (GFC) of China Society for Finance and Banking, in partnership with the City of London’s Green Finance Initiative (GFI) has published the Green Investment Principles (GIP) for Belt and Road with the aim to incorporate low-carbon and sustainable development principles into the BRI by encouraging financial institutions, corporations and third-party institutions involved to sign up to a voluntary code of practice. The GIPs consolidate seven principles at three different levels: strategy, operations, and innovation. The Principles call for top-down implementation of the incorporated strategy, communication among stakeholders, and utilisation of green financial instruments and green supply chain practices, as well as knowledge sharing and capacity building. As of 2020, the GIP welcomes 37 signatories and 12 supporters from 14 countries and regions around the world. The Principles represent one of the many effective tools and platforms the EU and China have for joint efforts to promote the green development of the BRI; not only to find ways to identify and reduce the climate-related risks but also to create incentive mechanisms to boost investment in climate-friendly industries along the BRI. This will definitely contribute to a unifying climate neutral economy based on the consolidated principles.
BM: In a recent interview you also referenced the importance of climate finance and functioning Carbon Markets for a green/low-carbon BRI. Can you elaborate on that?
ZHANG: Carbon pricing is an essential element to promote climate investment and finance along the BRI. The establishment of the BRI carbon market/carbon pricing mechanism will be the foundation for green/low carbon investment. At the same time, I would like to emphasize that EU ETS, California, and RGGI have abundant experience on carbon emission trading, while China national ETS has just opened for business. EU, US and China could leverage their experience to help BRI countries establish carbon markets. This could be an additional element for the broader climate platform that begins with the EU and China but is open to all international community stakeholders. Forward looking, the linkage of the carbon markets covering the EU, US, China and the BRI countries will spell out a kind of “market mechanism” founded on joint efforts to promote the green/low carbon BRI.
BM: Let me go back to what you said about China’s emissions peak. Prior to XI’s pledge, the Chinese side would indicate that emissions were to peak “around 2030”. When you go from “around 2030” “to “by 2030,” the message is urgency. Is that right?
ZHANG: This is true indeed. I also want to point out that the focus on high-quality economic development, which requires a low-carbon energy structure, and the new doctrine of “dual circulation” will be important elements in the transition to a carbon and climate neutral economy in China and worldwide. But for the latter, we need to work with all our international partners. Achieving peak emission means that we have necessarily to adopt a high-quality development model.
BM: The EU is reshaping its own economic structure and economic model as signaled by the features of the new Green Deal.
ZHANG: Correct, and this applies to China as well.
Where we are at is a different stage of development than European economies.
The energy structure needs to undergo fundamental changes through optimization of the energy consumption, strictly controlling the total coal consumption, ending the installation of additional coal-fired power plants, and ensuring renewable and clean energy account for a high percentage of the overall energy mix. This will also help improve the quality of energy supply and reduce or even eliminate investment in high-carbon energy. The social implications, however, are huge. And need to be dealt with.
BM: The social impact of the transition was a point raised by students during a lecture given by EU VP Frans Timmermans at Tsinghua. I recall Timmermans drawing comparisons between his native South Limburg in the Netherlands and coal provinces in China.
ZHANG: Yes, the transition must be not leave anyone behind, or it will fail. I am glad you mention Tsinghua, which is tremendously important in the policy discourse in China. The ICCSD of Tsinghua University, led by the former Minister for Environment and Climate Negotiator XIE Zhenhua is leading the national and international work on sustainability and the energy transition.
BM: In October ICCSD revealed how China could achieve its “carbon-neutrality” goal, including all Greenhouse Gas Emissions (GHGs) in an important policy paper. The study presents a pathway compatible with the possibility of containing global warming to the 1.5 degree benchmark. Are we reaching a new political milestone?
ZHANG: I believe that the level of ambition can be raised and that the 14th FYP can shoot for the moon and put China’s economy solidly on track for a leading role, together with the EU and all stakeholders that want to join at the same level of ambition, in the post-fossil economy.
It is my view that China can act even better than the mainstream 1.5 degrees pathway, which requires progressive climate action before 2030 and very rapid transition from 2030 to 2050. We call for an alternative “FLR” transition pathway and an aggressive approach, pursuing a Faster, Lower and more Robust transition.
The FLR 1.5C pathway we are advocating is robust, as the CO2 reduction shall be driven by the high-quality development that stems from the fundamental revolution in energy production and consumption and the progressive shift in economic and industrial structure.
The economy needs to shift away from the energy-intense, heavy industry. Consumption, instead of investment will be the driving force in the new economy. With rich coal reserves and scarce oil and gas resources, replacing coal with oil and gas may not be prioritized due to energy security concerns. However, it points towards the use of nuclear, solar, wind and other localized renewables in the future energy mix.
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