China’s premier Li Keqiang will become the first senior leader from the country to address the World Economic Forum in Davos since 2010, as the world’s second-largest economy tries to deal with slower growth and tough environmental challenges such as smog.
On Wednesday evening Li will address delegates on the opening day of the annual gathering of world leaders and executives from the world’s biggest companies, as pressure grows on China’s leadership to avoid a stronger downturn in the country’s economy.
Figures released on Tuesday showed that China’s economy in 2014 grew at its slowest pace in almost a quarter century as property prices cooled and companies and local governments remained burdened by heavy debt.
If China does decide to take some corrective measures and at the same time meet its environmental goals – such as improving air quality and fostering sustainable growth – it will have to calibrate its response carefully.
A US$586 billion stimulus programme in 2008 helped cushion China from the worst impacts of the financial crisis and later acted as a spur to close to double digit annual increases in GDP.
This encouraged overcapacity in many of the energy-intensive industries blamed for polluting China’s air soil and water, and helped drive greenhouse emissions to 10.3 billion tonnes of CO2 equivalent in 2013 from 7.8 billion CO2e in 2008, according to a much-quoted estimate from Dutch researchers.
But this time around China says that slower growth rates are desirable, especially through structural reforms including a switch to renewbles, Zhou Xiaochuan, the head of China’s central bank, told a roundtable discussion at Davos.
While China’s premier is likely to focus on economic matters in his 30-minute speech, Li may acknowledge the country’s role in shaping discussions on climate ahead of the UN summit in Paris at the end of the year.
The UN hopes that the climate summit in the French capital will agree a comprehensive deal to limit climate-changing gases and build upon a joint announcement with the US late last year.
Climate change is once again one of the major themes being discussed at Davos, as the UN and the EU make a strong diplomatic push to speed up momentum in getting agreement on deep emissions cuts.
Climate impacts and drought seen as ‘major risks’
A meaningful deal in Paris will also likely require agreement on financial structures needed to help vulnerable countries to slow deforestation, harness low-carbon energy and deal with the impact of wilder weather.
A report released by the WEF ahead of the Davos meeting said a failure by countries to adapt to the impacts of climate change, and the likelihood that more countries will experience serious droughts, are two of the main risks to the global economy and geopolitical stability over the next decade.
The WEF report adds that progress will need to be made this year that would give companies greater clarity on what steps will be taken to switch to lower-carbon forms of energy, carbon pricing and other measures aimed at slowing growth in greenhouse emissions.
“A strong set of clear policy signals to the wider business community is needed from the world’s governments on their ambition to tackle environmental risks. The year 2015 is not an opportunity the world can afford to miss,” it adds.
The Davos meeting is the first major huddle of world leaders this year, and climate change is also likely to feature prominently at the G7 summit hosted by Germany in June and a G20 meeting chaired by Turkey in November before heads of government gather at the Paris climate conference.
Path to Paris
But at a less visible level, international negotiators at UN climate talks will need to agree compromises and refine the working text of a future climate agreement so that political leaders will have something to sign in Paris.
Delegates at lower level climate talks next month and in June will be under pressure to avoid the chaos of the 2009 climate summit in Copenhagen, when a bloated negotiating text included numerous contradictory standpoints and clear maneuvering by self-interested major emitters, rendering a meaningful agreement impossible.
National plans showing what countries intend to do in slowing carbon emissions, and by how much, are due to be submitted ahead of the Paris talks, and are sure to prompt much mutual scrutiny through transparent ‘apples to apples’ comparisons required by the UN.
After disappointingly slow signs of progress at the Lima climate conference at the end of last year, 2015 is likely to see increasingly furtive efforts to deliver a climate deal.
This week’s gathering in the snow-draped Swiss ski resort will hear a lot of well-meaning platitudes on how to tackle climate change and how companies can help, but as the year progresses, the tenor of talks on one of the world’s greatest challenges is likely to become much less serene – and demand real action.
