So Far, yet so Close
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A vacuum in leadership caused by the Trump Administration's disavowal of the Paris Agreement has led to a new alliance between Beijing and Brussels, with broad implications for their international standing as well as efforts to promote sustainable development around the world

In light of U.S. President Donald Trump’s peculiar positions on the implementation of the Paris Agreement, a remarkable new global alliance seems to have taken shape. The European Union, a first mover in global policies to combat climate change, has never been so close to China on the issues of decarbonization and sustainability, and is focusing strongly on cooperation with Beijing in a bid to achieve the two-degree target needed to secure the continued livability of planet Earth. With only 8 percent of global CO2 emissions, Europe has embarked on what is certainly one of the most solid and credible trajectories, compared to the world’s leading powers, to reduce its environmental impact. Europe has already reduced its emissions by 22 percent compared to 1990 levels and is thus fully in line with the targets of its 2020 Package. It is now aiming for a 40 percent reduction by 2030. Over the long term, Brussels seeks to reach near zero emissions (80-95 percent reductions by 2050), although the target is still not fully consistent with the European Union’s climate policies and with Europe’s current trajectories. In spite of its commitment to decarbonization and sustainability, China is currently in a diametrically opposite situation from the E.U. With over 10 million tons of greenhouse gas emissions (overtaking the U.S. in 2006), it accounts for almost one third of total global CO2 emissions. The rise in China’s emissions has been huge-doubling over a period of 10 years-and to some extent is still unpredictable. In recent years, a succession of projections for China’s emission peaks has produced grossly inaccurate or contradictory results. After an extremely modest decline in the two previous years, China’s emissions have grown once again in 2017 by a significant 3.2 percent (pushing global CO2 up by 2 percent), fueling the dissatisfaction, but most of all the concern of those monitoring the fight against climate change. This growth shows no signs of slowing down, despite China’s ongoing efforts to reduce its carbon footprint and its new role as a global player in decarbonization policies and in the fight against climate change. At the international level, China’s commitment and its partnership with the United States under President Obama in 2015 made a significant contribution to the success of COP21 and the signing of the Paris Agreement. And despite the subsequent decision by Washington (under the Trump Administration) not to adhere to its international pledges on climate change, Beijing seems committed as never before to maintaining-and even bolstering-its leadership role. Trump’s decision effectively cemented the global climate partnership between the E.U. and China, which reaffirmed their joint commitment to the Paris Agreement immediately after the White House announcement. During a concurrent bilateral summit held in Brussels on June 1, they had the opportunity to discuss and reaffirm their intent to forge ahead on the path set out at COP21 despite America’s withdrawal. Although a series of disagreements on trade issues prevented their adoption of a joint declaration formalizing their full adherence to the 29 articles enshrined in the Agreement and their mutual commitment to the irreversible energy transition processes underway, China and the E.U. have never before been in such close agreement on the fight against climate change.

A shift from dialogue to joint leadership?

Bilateral ties between the E.U. and China actually date back to well before Trump’s recent U-turn, specifically to the mid-1990s, when European emissions were 25 percent higher than China’s (4 billion tons of CO2 vs. 3 billion tons). The sectoral dialogue on energy policies launched in 1994 (which gave rise to a biannual Energy Cooperation Conference) and the dialogue on environmental issues launched in 1996 laid the foundations for the first interactions between European and Chinese institutions,. Then, on the sidelines of the 2005 E.U.-China Summit, Brussels and Beijing signed a Joint Declaration on Climate Change formalizing their partnership in that regard. This was followed by a series of initiatives (Joint Statement on Dialogue and Cooperation on Climate Change and E.U.-China Environmental Governance Program, 2010; E.U.-China Environmental Sustainability Program, 2012; E.U.-China 2020 Strategic Agenda for Cooperation, 2013;.-China Joint Statement on Climate Change, 2015) that gradually contributed to strengthening bilateral ties, while also reflecting Europe’s need and intent to include Beijing as a credible player in the international arena. For various reasons, first and foremost China’s dramatic environmental conditions, which are fueling growing mass protests throughout the country, the Chinese government has in recent years embarked on a serious review of its energy and climate policies in an attempt to find a compromise model that can satisfy the need to sustain its high economic growth rates while also limiting emissions. In this respect, the European Union’s experience certainly offers a potential model. The E.U. has created the most sophisticated and effective model of sustainable development thanks to which, as European Climate Action and Energy Commissioner Miguel Arias Canete pointed out, GDP has grown by over 50 percent since 1990 while CO2 emissions have fallen by 22 percent. Despite the challenges posed by carbon leakage and the delocalization of its industrial activities, Europe can make a significant contribution to Chinese efforts on this front. The E.U. is the undisputed global leader in low-carbon technologies, with over 44 percent of all patents registered in European territory, and is therefore a key actor for Beijing to look to if it seeks to scale up its decarbonization trajectory in a credible manner. At the same time, a key objective of the E.U.'s export policies and of its industrial actors is access to China’s huge market (it is estimated that there have been 300,000 low-carbon technology transfers from Europe to China since 2009), especially in view of Beijing’s further acceleration on the green front. But the partnership now seems to have gone beyond this purely bilateral dimension of learning/transfer. As a result of China’s step change in preparation for COP21, its key role in mobilizing and encouraging developing countries to adopt a proactive and responsible approach, and its huge domestic investments to tackle an unsustainable environmental situation, the relationship between Brussels and Beijing now seems to be more balanced and solid. Their joint commitment is contributing to more credible and effective global climate governance. The E.U. and China can thus act as promoters of a broad North-South alliance between industrialized and developing countries, without which any attempt to implement the Paris Agreement could ultimately fail. This role would boost the international standing of both, helping Europe to reap the political dividends of its climate leadership, which it is still struggling to capitalize on despite its large-scale investments, and encourage China-as a pillar of the energy transition-to finally act as a key (and credible) player in the mechanisms of global governance. This joint leadership can certainly provide an impetus for driving global decarbonization policies forward. But due to the major economic and strategic implications of decarbonization, among other things, it could also trigger several competitive, and possibly even conflictual, mechanisms between Brussels and Beijing.

A common enemy in coal

Coal is certainly the greatest common enemy of the E.U. and China. The problem in Europe can be simply summed up by noting that while coal contributes to just under 25 percent of Europe’s power generation, it accounts for 75 percent of E.U. emissions. And while Brussels is at the forefront of the fight against the most polluting of all combustible fuels, some E.U. member states are still heavily reliant on coal for their electricity sectors, accounting for 80 percent of power generation in Poland and over 40 percent in the Czech Republic, Bulgaria, Greece, and Germany. The problem of coal, and its devastating effects on health and the environment, is one with which the Chinese are very familiar. Coal still accounts for almost three quarters of China’s total electricity production, with a total installed capacity of over 900 Gigawatts (GW), and is actually the main cause of death from air pollution in the country: 86,000 deaths caused by coal burning at power generation plants, 55,000 deaths from coal used in industrial processes, and over 170,000 deaths from coal and biomass combustion in households. In order to tackle these staggering figures, the Chinese government has announced a freeze on a hundred new coal-fired power plants, these to be replaced with additional generation capacity from renewables. Despite these efforts, if China is to limit the devastating impact of existing power plants, it needs new technologies for the capture and storage of CO2, as well as efficient mechanisms for "pricing" emissions and incentivizing emissions reduction using market dynamics. In this respect, joint initiatives like the China-E.U. Near Zero Emission Coal (NZEC) project and the E.U.-China ETS Project in particular, the latter a three-year project supporting the design and implementation of emissions trading systems in China, are important pillars of cooperation. Cities are also playing a central role in the joint efforts by the E.U. and China to combat climate change. Chinese cities led the way in voicing the alarm that led the Beijing government to step up its low carbon trajectory. And their collaboration with European cities-through the E.U.-China Low Carbon City partnership-can bring significant benefits by bolstering bottom-up dynamics that are still too difficult to implement in the Chinese socio-political system.

Focus on Africa

Although the many challenges associated with climate changes require a joint (or at least a coordinated) response, the honeymoon between the E.U. and China could face difficult times ahead. This is because while the energy transition process is inevitable in order to secure the continued viability of the planet, it also involves a strong economic and industrial component that could trigger geopolitical competition. Given the potential value of the investments required to implement the Paris Agreement-USD 23 trillion between now and 2030, according to the World Bank-decarbonization could be a highly attractive game for Brussels and Beijing to play. With some 170 countries (out of the 197 signatories) that have now ratified the Agreement and are set to implement the mitigation and adaptation measures to comply with the Nationally Determined Contributions (NDCs) agreed in Paris, the potential for intervention is huge. Both China and the E.U. will therefore want to be ready-the former with its financial leverage and the latter with its technological leadership-to enter these vast markets with their respective industries. Africa is undoubtedly one of the areas in the world where energy transition and decarbonization processes will take hold most spectacularly. Data from the International Renewable Energy Agency (IRENA) show very clearly the African continent’s vast low carbon potential, with 300,000 GW of solar power and 7,000 GW of wind power. In a region where 600 million people still have no energy access, this potential provides an excellent opportunity for European and Chinese low carbon companies. Gaining privileged access to these vast and rapidly expanding markets is an important driver for the export of technologies, know-how and services to countries and regions that are building their energy sector virtually from scratch. Brussels and Beijing already have a strong presence on the continent, with diplomatic efforts (bilateral as well as multilateral) overlapping with industrial initiatives and development cooperation actions. But technological-industrial penetration in the low-carbon sector-in Africa as elsewhere-could also have clear geopolitical and strategic implications. Infrastructure, technologies and processes designed to tackle the energy transition and to make it increasingly efficient and sustainable will actually become tools and factors of political cooperation, with the potential to determine the directions, choices and tactical positioning of several actors in the global arena. In this context, the E.U. has every intention to maximize the efforts (economic as well as social) it has made over the last decade to secure its leadership role in the transition. China’s exponential growth in this field-in 2015, Beijing spent two and a half times more than the E.U. on clean energy, and over the last five years its R&D investments have grown by 73 percent compared to 17 percent in the E.U.-threatens to rapidly undo the advantage that Brussels has built over recent years. This is certainly good news for the planet’s sustainability, not quite so good perhaps for Europe’s industrial growth and strategic ambitions.