{"id":64598,"date":"2020-06-17T15:26:02","date_gmt":"2020-06-17T15:26:02","guid":{"rendered":"http:\/\/chinadialogue.net\/?p=64598"},"modified":"2021-02-15T10:22:26","modified_gmt":"2021-02-15T10:22:26","slug":"hopes-for-eu-china-climate-deal-centre-on-a-green-recovery","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/climate\/hopes-for-eu-china-climate-deal-centre-on-a-green-recovery\/","title":{"rendered":"Hopes for EU-China climate deal centre on a green recovery"},"content":{"rendered":"\n

When exhausted delegates finally trailed out of the massive convention centre in Madrid last December after the longest UN climate talks in history, it was clear the international climate process was in trouble. Facing a critical 2020 deadline to ramp up global climate action, the world\u2019s major emitters were stalling \u2013 or, in the case of the US, exiting the process entirely. But advocates pointed to one ray of hope: a potential agreement between the EU and China. If two of the world\u2019s largest emitters could strike a deal to jointly raise their climate targets, then other countries might do the same, driving a new wave of climate action.<\/p>\n\n\n\n

About this article<\/p>

This is the first in a series of articles\u00a0co-published by Clean Energy Wire and China Dialogue that\u00a0explores the prospects for EU\u2013China cooperation on climate, investment and the low-carbon transition<\/p><\/div><\/div>\n\n\n\n

\u201cBringing together the largest emitter with the continent that has taken on the responsibility of being the icebreaker on this path to climate neutrality could be incredibly powerful,\u201d said Jennifer Tollmann, a policy advisor with the environmental think-tank E3G in Berlin. \u201cYou don\u2019t really see any major power alliances in the world that could set that global agenda in the same way.\u201d<\/p>\n\n\n\n

Fast forward six months and the coronavirus pandemic has upended those plans, sending governments scrambling to manage the health crises and economic damage as geopolitical tensions spiked. One by one, crucial events have been rescheduled or postponed. Among the casualties: the COP26 UN climate summit in Glasgow and the September summit in Leipzig between the EU and China, where diplomats had hoped the two might strike a deal.<\/p>\n\n\n\n

Yet some climate advocates see an opportunity.<\/p>\n\n\n\n

\u201cMaybe something even bigger is possible,\u201d said Lutz Weischer, with the environmental NGO Germanwatch.<\/p>\n\n\n\n

Weischer and others say there\u2019s an opening for the EU and China to craft a \u201cgreen partnership\u201d focused less on specific emissions targets and more on using the coronavirus recovery to accelerate the transition to a greener global economy. \u201cThe question for future European\u2013Chinese cooperation, regardless of when the summit happens, is going to be, what is the vision for rebuilding the economy? How do you build back better?\u201d Weischer said.<\/p>\n\n\n\n

The decisions made now could affect the trajectory of greenhouse gas emissions for years to come.<\/blockquote><\/cite><\/div><\/div>\n\n\n\n

Both the EU and China have announced major economic rescue packages as countries around the world prepare to spend unprecedented amounts to rebuild their economies after the crisis. The decisions made now could affect the trajectory of greenhouse gas emissions and policy debates for years to come.<\/p>\n\n\n\n

The EU and China are also major funders of development overseas. If they can agree to direct funding toward low-carbon investments, both at home and abroad, that could have a bigger impact than any deal on simply cutting emissions, advocates say.<\/p>\n\n\n\n

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Such a partnership would send a global message that both the EU and China believe \u201cthe green transition is<\/em> the economy of the future,\u201d Weischer said.<\/p>\n\n\n\n

Others are less optimistic. Noah Barkin, a fellow with the German Marshall Fund in Berlin, pointed out that the EU and China already face difficult negotiations over trade and investment. Political tensions are making those conversations more complicated, while the pandemic itself has limited the ability of diplomats to meet. He thinks a major climate agreement is unlikely any time soon.<\/p>\n\n\n\n

\u201cMy sense is it was always going to be very difficult, and the Covid-19 pandemic has made it close to impossible,\u201d Barkin said.<\/p>\n\n\n\n

A critical relationship for climate action<\/h2>\n\n\n\n

Experts say the EU\u2013China relationship is a crucial one for the international climate process at a time of profound uncertainty and high tensions between the US and China.<\/p>\n\n\n\n

\u201cIt\u2019s really a situation where few countries are left, and where two big players would really make a difference,\u201d said Dr Susanne Dr\u00f6ge, a senior fellow at the German Institute for International and Security Affairs (SWP).<\/p>\n\n\n\n

The US decision to exit the Paris Agreement has left a leadership void at a key moment. Under the agreement, countries committed to submit more ambitious climate targets this year. But as of June, only ten countries<\/a> had done so and they represent less than 3% of global emissions. Advocates say new leadership is sorely needed.<\/p>\n\n\n\n

European leaders signalled their hope to strike a bilateral deal similar to the 2014 US\u2013China deal that paved the way for the Paris Agreement<\/blockquote><\/cite><\/div><\/div>\n\n\n\n

It\u2019s a role the EU seems interested in filling. In December 2019, EU leaders officially embraced a 2050 carbon-neutral target. The European Commission, the EU\u2019s executive arm, rolled out its plan for a \u201cEuropean Green Deal\u201d to remake the bloc\u2019s economy, along with a proposal to increase 2030 climate targets. Meanwhile, European leaders signalled<\/a> their hope to use these bids to convince China to join them, striking a bilateral deal similar to the 2014 US\u2013China deal<\/a> that had paved the way for the Paris Agreement.<\/p>\n\n\n\n

China\u2019s interest in a deal with the EU has been less clear. \u201cIt\u2019s understandable for major countries to feature China prominently in their climate-engagement strategy,\u201d said Li Shuo, a senior policy advisor at Greenpeace East Asia, pointing to China\u2019s status as the world\u2019s largest emitter and second-largest economy. \u201cBut I think from the Chinese perspective, the US looms always very large in any strategic decision-making.\u201d<\/p>\n\n\n\n

There was some diplomatic momentum. In January, Germany\u2019s chancellor, Angela Merkel, announced<\/a> that climate change would be a major agenda item at a key EU\u2013China summit scheduled for September, during Germany\u2019s presidency of the EU Council. The summit would bring together all 27 EU leaders with China\u2019s president, Xi Jinping, for the first time. That meeting, in turn, would take place just before two marquee events: the UN biodiversity talks hosted by China<\/a> in October, followed by UN climate talks hosted by the UK in November.<\/p>\n\n\n\n

\u201cThere was really hope for a substantial agreement, one that would give a sign to the rest of the world,\u201d said Wendel Trio, director of the environmental NGO Climate Action Network (CAN) Europe.<\/p>\n\n\n\n

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In late May, Ursula von der Leyen,\u00a0European Commission president, proposed a \u20ac750 billion coronavirus stimulus package for the EU, a quarter of\u00a0which would\u00a0be spent climate action (Image: Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

The coronavirus crisis has derailed those hopes, at least for now. The EU\u2013China summit<\/a> and biodiversity talks<\/a> have been postponed to as yet undetermined dates, and the climate talks moved to November next year.<\/p>\n\n\n\n

The reshuffled diplomatic schedule means the political landscape has shifted but advocates say it stills holds possibilities. The original hope was to hash out an agreement on increasing climate targets, while also setting the stage for further economic cooperation down the road. Now, Weischer said, economic cooperation might be the focus.<\/p>\n\n\n\n

\u201cIf they agree on the principle that the recovery has to be aligned with what the sustainable development goals say and what the Paris Agreement says, I think that sends a powerful message to the rest of the world,\u201d said Weischer.<\/p>\n\n\n\n

Some officials have echoed that language. EU foreign policy chief Josep Borrell called climate action \u201ceven more important in the post-Covid-19 world\u201d during a press conference<\/a> in June, after speaking with Chinese foreign minister Wang Yi. \u201cWe will have to \u2018build back better\u2019 \u2013 all of us,\u201d Borrell said. \u201cWe all need to seize this opportunity to transform our economies and societies in a green and sustainable way.\u201d<\/p>\n\n\n\n

Cooperation on a green recovery?<\/h2>\n\n\n\n

Observers see a range of areas where the EU and China could cooperate \u2013 or ramp up existing cooperation. These include sustainable finance standards, greening supply chains, revamping biodiversity frameworks and overseas investment.<\/p>\n\n\n\n

The EU and China could work together on developing international standards for sustainable finance, E3G\u2019s Tollmann said, perhaps through the International Platform on Sustainable Finance (IPSF).<\/a> China has expressed interest in the EU\u2019s effort to develop a sustainable finance taxonomy<\/a> \u2013 essentially, a set of standards to determine which economic investments can be considered \u201cgreen\u201d and which can\u2019t. As countries around the world prepare to spend previously unthinkable sums to rebuild their economies, those guidelines have taken on a new urgency.<\/p>\n\n\n\n

There might be a potential to develop joint commitments on debt or greener investments in developing nations.<\/blockquote><\/cite><\/div><\/div>\n\n\n\n

\u201cYou can\u2019t talk about how to recover better without talking about what is a good investment and what is a bad investment,\u201d Tollmann said.<\/p>\n\n\n\n

Then there\u2019s investment in third countries. In her January speech, Merkel highlighted potential EU\u2013China cooperation on international development, especially in Africa. There might be a potential to develop joint commitments on debt or greener investments in developing nations, Tollmann said. It\u2019s an area of particular focus for climate advocates and EU officials, who see as a major issue China\u2019s funding for energy projects \u2013 including coal plants \u2013 as part of its Belt and Road Initiative.<\/p>\n\n\n\n

Observers say there\u2019s still too much uncertainty surrounding the EU\u2013China relationship to confidently say what\u2019s possible. \u201cHonestly, it\u2019s really unpredictable,\u201d Tollmann said. Just a few weeks ago, she had hoped for a major agreement; with the September summit postponed, she thinks a single bilateral deal is less likely. But there\u2019s still the opportunity to work together \u2013 and perhaps with other countries \u2013 on an issue-by-issue basis.<\/p>\n\n\n\n

Ultimately, the coronavirus has upended assumptions for policymakers around the globe, potentially opening up possibilities that didn\u2019t exist just a few months ago. \u201cIt is just huge sums of money that could really fundamentally reset our economy for the next 10 years,\u201d Tollmann said, and countries have the chance to make sure that reset is green: \u201cIf we don\u2019t view it that way, we\u2019re locking ourselves into a reality where there just won\u2019t be money for the world that we need.\u201d<\/p>\n\n\n\n

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A solar power station in Aswan, Egypt, built by Chinese\u00a0company TBEA SunOasis (Image: Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

Both EU and German officials stressed that climate change remains on the agenda in the bloc\u2019s discussions with China.  <\/p>\n\n\n\n

\u201cRest assured that tackling climate change, meeting our climate commitments, and engaging on sustainable development, are one of our very top priorities, both in our bilateral relationship and also working in multilateral fora and with third countries,\u201d Virginie Battu-Henriksson, EU spokesperson for foreign affairs, told Clean Energy Wire.<\/p>\n\n\n\n

Germany\u2019s foreign office assumes that under the Paris Agreement countries are expected to submit new climate targets (also called nationally determined contributions, or NDCs) in 2020, regardless of when the COP26 climate summit takes place \u2013 and said China is one of the \u201cfocus countries\u201d for German and EU climate outreach.<\/p>\n\n\n\n

\u201cTogether we are promoting a more ambitious NDC from China, which would be a very important signal for international climate policy,\u201d a government source told Clean Energy Wire.<\/p>\n\n\n\n

A complicated relationship gets more difficult<\/h2>\n\n\n\n

Some experts caution that any climate agreement will be an uphill battle, for reasons that predate the coronavirus crisis.<\/p>\n\n\n\n

\u201cI think a key point here is never to underestimate the challenging bilateral relationship between Brussels and Beijing,\u201d said Li Shuo, of Greenpeace East Asia. He pointed out that an earlier attempt to broker a joint statement on climate change, in 2017, collapsed<\/a> over disagreements on trade.<\/p>\n\n\n\n

For China, the primary geopolitical concern is not the EU, but the US, said Susanne Dr\u00f6ge from SWP. Escalating tensions between the US and China have led to headlines warning of a \u201cnew Cold War.\u201d Any climate deal with the EU will be seen through that lens, Dr\u00f6ge said. \u201cThe only [way] the Chinese would see that as relevant would be if this whole thing would help them to make a case against US policy,\u201d she said.<\/p>\n\n\n\n

Assuming the EU\u2013China summit eventually goes ahead, climate change wouldn\u2019t even be the top priority, Dr\u00f6ge added. Instead, it will be competing with the response to the coronavirus and efforts to complete years-long negotiations on a major investment agreement<\/a>. And all of that comes on top of long-time disagreements on issues like trade, human rights and the status of Hong Kong.<\/p>\n\n\n\n

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Meanwhile, Reinhard B\u00fctikofer, a Green Party member of the European Parliament from Germany and chair of the body\u2019s panel on relations with China, said China\u2019s approach in the aftermath of the pandemic \u2013 touting its own success in handling the crisis and disparaging Western democracies \u2013 has alienated many in the EU.<\/p>\n\n\n\n

\u201cChina\u2019s prevailing crisis opportunism has made them shoot themselves in the foot repeatedly,\u201d B\u00fctikofer said, adding that events this spring have convinced many in Europe that as China gets more powerful, it is less interested in compromise. \u201cThis is not a leadership that looks for shared multilateral approaches, this is a leadership that looks for reshaping global governance in the image of a China-centric hub-and-spokes approach. Well, why should anybody be thrilled by that?\u201d B\u00fctikofer said.<\/p>\n\n\n\n

But Nis Gr\u00fcnberg, of the Mercator Institute for China Studies (MERICS), said climate change mitigation should be a rare bright spot in an otherwise contentious relationship.<\/p>\n\n\n\n

\u201cClimate change is actually one of the very few topics remaining where the European Union and China have an alignment of interests,\u201d Gr\u00fcnberg said. \u201cIt\u2019s a pity that it\u2019s been pushed down the agenda by the crisis, but that doesn\u2019t mean it\u2019s gone away. It could be used to kickstart a more productive dialogue.\u201d<\/p>\n\n\n\n

Internal debates within the EU<\/h2>\n\n\n\n

Experts say any agreement also depends on how internal dynamics unfold within the EU and China over the coming months in response to the pandemic.<\/p>\n\n\n\n

One major question is whether the EU will agree to increase its 2030 climate targets by the end of the year, as required by the Paris Agreement. So far, that still looks likely, said Trio, of CAN Europe. The European Commission has said<\/a> it will stick to the deadline.The bloc\u2019s current target aims to cut emissions 40% below 1990 levels; the commission\u2019s proposal would raise that to between 50 and 55%. The proposal, which requires approval by EU member states, got a boost in April when Angela Merkel publicly declared<\/a> her support for the higher target during the Petersberg Climate Dialogue.<\/p>\n\n\n\n

The EU is sending the message that climate change remains as, or is even more, important than before<\/blockquote><\/cite><\/div><\/div>\n\n\n\n

Merkel\u2019s endorsement was key, Germanwatch\u2019s Weischer said, because once Germany takes over the presidency of the EU Council in July, it will be responsible for shepherding the bloc to consensus on new targets. The higher targets face resistance from some member states, especially Poland, which is highly dependent on coal. Merkel has also faced scepticism<\/a> at home from lawmakers within her own conservative coalition who think the new targets go too far. \u201cThe Germans need to play an active role in this,\u201d Weischer said. \u201cThey\u2019re in a better position to do that now than they were a few weeks ago, but they\u2019re still not in the ideal position.\u201d<\/p>\n\n\n\n

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Another question is how the EU will handle its economic stimulus. In late May, the European Commission president, Ursula von der Leyen, proposed a \u20ac750 billion fund to revive the bloc\u2019s economy, with 25% earmarked<\/a> for climate action. The proposal followed a joint statement from Merkel and French president, Emmanuel Macron, who called<\/a> for the EU to base its coronavirus recovery measures on the European Green Deal, a sweeping set of proposals to make the continent carbon-neutral by 2050.<\/p>\n\n\n\n

Trio, of CAN Europe, said the EU must go further to align its targets and spending with the goal of limiting warming to 1.5C. But, he said, overall, these are hopeful signs. \u201cWe\u2019re not there yet, but at least in this time of crisis, the EU is sending the message that climate change remains as, or is even more, important than before,\u201d Trio said.<\/p>\n\n\n\n

Key decisions yet to be made in China<\/h2>\n\n\n\n

Clear, ambitious new climate targets from the EU could affect China\u2019s calculus, said Li Shuo.<\/p>\n\n\n\n

Climate change was a difficult subject in China even before the coronavirus pandemic, Li said, as slowing economic growth made Chinese leaders more cautious about imposing new environmental targets. Now, the pandemic and its economic fallout have pushed climate policy even further down the priority list.<\/p>\n\n\n\n

But, Li said, a serious commitment from the EU could pressure China to reciprocate. \u201cEuropean engagement will be critical in bringing the climate issue back to the agenda of the highest political level on the Chinese side,\u201d Li said.<\/p>\n\n\n\n

At a moment when China is facing hostility from the US and international anger over its response to the coronavirus outbreak, climate change offers an opportunity to be seen as a constructive player on the world stage, and a supporter of the multilateral system, Li said. \u201cClimate action has been a rare area where China has been perceived relatively positively by the global community over the last few years,\u201d he said. \u201cIf that momentum is not sustained, China risks reversing its global image.\u201d<\/p>\n\n\n\n

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Wind turbine blades\u00a0in China\u2019s Jiangsu province, destined\u00a0for North and South America (Image: Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

So far, China\u2019s leaders have offered just a few clues to their plans for economic recovery and new climate targets. In May, the government announcement that it would not set a GDP target<\/a> this year was greeted by environmentalists concerned that an effort to rapidly boost growth would lead to major investments in fossil fuel projects. The government also outlined a plan to shore up the economy, though there\u2019s still little detail on how the money will be spent.<\/p>\n\n\n\n

As for climate targets, there are several policies on the table, but it\u2019s uncertain which might be adopted by China\u2019s leadership \u2013 if any. China could shift forward the date it will peak its greenhouse gas emissions, currently set for 2030, introduce emissions limits for greenhouse gases like methane, which aren\u2019t covered under current targets, or strengthen its carbon-intensity target (a limit on carbon emissions per unit of GDP). It could even introduce an absolute cap on emissions, though that\u2019s seen as less likely, or set a goal of reaching carbon neutrality.<\/p>\n\n\n\n

One key issue is coal. China is still building coal-fired power plants<\/a>, and is one of the biggest funders of coal projects<\/a> abroad. Any new climate targets should reduce coal use, Li said, but it won\u2019t be easy. Indeed, the entire question of new climate targets is a hard one, he said.<\/p>\n\n\n\n

China will be navigating a very narrow political space<\/blockquote><\/cite><\/div><\/div>\n\n\n\n

\u201cI think those conversations will be very, very difficult and China will be navigating a very narrow political space,\u201d Li said.<\/p>\n\n\n\n

Hu Min, executive director of the Innovative Green Development Program (iGDP) in Beijing, said it\u2019s misleading to focus solely on China\u2019s international commitments. Domestic sectoral policies are a better indicator of where the country is heading, she said. One key indicator will be China\u2019s 14th<\/sup> Five Year Plan<\/a>, which is now in development. Hu expects it to be a much greener document than its predecessor, which could put China on a path to significantly overperforming its current NDC.<\/p>\n\n\n\n

Hu also sees potential for EU\u2013China cooperation on a green recovery. She pointed to a March appearance by Xi, which he used to highlight<\/a> his concept of \u201cecological civilization<\/a>\u201d. \u201cIt\u2019s a very strong political signal that green development is still the core even though we need to tackle economic recovery,\u201d Hu said. She added that China\u2019s leaders seem to have learned the lessons of 2008, when the country responded to the economic crisis with a stimulus programme that ended up locking in significant fossil fuel emissions<\/a>.\u201cIt\u2019s clear that policymakers are trying to make it a smarter, greener more sustainable recovery through the concept of new infrastructure and new urbanisation,\u201d Hu said.<\/p>\n\n\n\n

Ultimately, though China\u2019s leadership does take climate change seriously, responding to the pandemic and its economic fallout will come first, said MERICS\u2019 Gr\u00fcnberg. \u201cClimate change is still a top priority, but there\u2019s always a priority among priorities, and that is stability.\u201d<\/p>\n\n\n\n

US election remains a wild card<\/h2>\n\n\n\n

For policymakers in both the EU and China there is, of course, another wild card: the US presidential election. If Donald Trump is re-elected in November, the US is set to exit the Paris Agreement. Meanwhile, his Democratic challenger, Joe Biden, has promised to re-join the Paris Agreement and make climate change a priority. China, especially, might decide to hold off on announcing any new targets until the results of the US election are known, Li said.<\/p>\n\n\n\n

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Joe Biden\u00a0has promised to re-join\u00a0the Paris Agreement\u00a0and make climate change a priority if elected this November (Image: Alamy)<\/div><\/div><\/div><\/div>\n\n\n\n

Li compared global climate policy to a tricycle, with the EU, China and the US as the three wheels. \u201cThe EU is the front wheel. You can\u2019t really move forward without the front wheel, [and] the good news is there are strong domestic political conditions within the EU to propel it to move forward,\u201d Li said. \u201cThe two wheels at the back are sort of dragging each other. There\u2019s still a possibility for China to move forward, but the gravity of the US is still quite strong.\u201d<\/p>\n\n\n\n

For now, the outlook remains uncertain. But Tollmann, of E3G, says it may be time for the EU to look beyond China, to countries like South Korea, the UK and Japan.<\/p>\n\n\n\n

\u201cI do still think the EU and China [relationship] is really important for the climate… because at the end of the day, China is still the world\u2019s largest emitter,\u201d Tollmann said. But this spring has laid bare the pitfalls of counting on one key partnership to jump-start global climate action. \u201cYou do probably need numerous coalitions,\u201d Tollmann said. \u201cRather than a silver bullet relationship that will save all.”
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