By Andrew Hammond
The conventional wisdom about the chill in China-Europe ties, which dates back till at least the pandemic, is that it may now be irreversible. However, not all of the bilateral relationship is in “deep freeze.”
For at least around a decade, Beijing and Brussels have had very fruitful bilateral conversations on global warming issues. So much so in fact that the EU Emissions Trading System (EU-ETS) was very influential in Beijing's design of its own carbon markets.
European Commission Vice President Frans Timmermans, who heads up green policy for the EU, highlighted this warmth in 2021 when he referred to the “good partnership” in this area. Last week, during his latest visit to Beijing for the EU-China High-level Environment and Climate Dialogue, it was therefore unsurprising that Timmermans said he is “convinced that China is willing to go in the right direction” in tackling climate change, despite growing concerns to the contrary.
Some critics, including NGOs such as Greenpeace, for instance, highlighted this week that Beijing has approved a major surge in coal power so far this year, with the fear that it is prioritizing energy supply over reducing greenhouse emissions. China relied on coal for nearly 60 percent of its electricity in 2022, at least the third consecutive year of growth, and the further increase in approvals for coal-fired power plants has added to worries that Beijing will backtrack on ambitions to peak emissions between 2026 and 2030 before carbon-neutrality by 2060.
EU decision makers such as Timmermans are acutely aware of China's challenge here. They appear to have concluded that the best way to incentivize counterparts in Beijing on this agenda is encouragement, rather than condemnation.
The European assumption is that Beijing needs to be “in the tent' on climate issues rather than left outside. China today is by a long way the largest national emitter of greenhouse gases (accounting for 26.1 percent of global emissions), and international action to tackle climate change is much weakened without Beijing on board.
Many EU officials have long believed that, fundamentally, Chinese policymakers share a vision with Europe of a prosperous, energy-secure future in a stable climate and recognize the need for bilateral collaboration. After all, global warming poses a massive environmental threat to China from record-setting heatwaves to flooding.
In recent days, China's main climate center announced that the first half of 2023 has seen a record number of high-temperature days. Beijing recorded its hottest June day ever and much of Northern China endured 40-degree heat. At the same time, heavy sustained rainfall in central and southern China has also led to severe flooding in recent days, with more than 14,000 people forced to evacuate in Hunan Province alone.
The centerpiece of EU-Chinese cooperation on this agenda is the 2015 EU-China climate change declaration, one of the key drivers of the global warming deal agreed in Paris last December. Under this, both parties agreed to cooperate on developing a cost-effective low-carbon economy, including intensifying cooperation in domestic mitigation policies, carbon markets, low-carbon cities, greenhouse gas emissions from the aviation and maritime industries, and hydrofluorocarbons.
This agreement is incredibly important as, collectively, the EU and China account for over one-third of global greenhouse emissions (which grows to around one-half when the United States is added into the picture). It is no surprise therefore that the 2015 EU-US bilateral climate change declaration was one of the key drivers, along with US diplomacy, of the new, comprehensive global warming deal agreed in Paris.
Amidst all the challenges around climate change, both Chinese and EU policymakers still see ― with appropriation vision and commitment ― a massive 'win-win' opportunities on the horizon from accelerating the transition to a low-carbon future. And this collaboration looks set to only deepen, including on emissions trading.
China's planned investment in the green economy is staggering, a fact that the EU is increasingly recognizing. For instance, China is the world's biggest and fastest-growing producer of renewable energy, and it aims to turn one-third of its total power supply renewable by 2025.
Europe has clear strengths in this area that China needs here. As the latter continues on a trajectory to potentially become the world's largest economy, there are thus substantial commercial opportunities with European technology and science firms that are leaders on much of this clean technology agenda.
Importantly, this collaboration will not just be one-way traffic. Indeed, China is already the world's largest manufacturer and user of solar panels and the largest investor in renewable energy, and it is increasingly possible that technology transfer will be a two-way process.
To be clear, there is still a long way to go before China has a fully-fledged carbon market. However, the direction of travel is clear: cooperation could build low-carbon industries in a range of sectors and also align Europe more closely to the world's future largest economy.
Taken together, it is therefore clear that both the EU and China have much to gain from a deep partnership on this agenda, but the window of opportunity to collaborate may not remain open indefinitely. Now is thus the time to intensify cooperation, and help define the landscape of the 21st-century clean energy economy.
Andrew Hammond is an Associate at LSE IDEAS at the London School of Economics.