China’s Challenge at COP26 Turns Into A COP-Out
By Bob Savic, Senior Consultant, Dezan Shira & Associates
The United Nations Climate Change Conference of the Parties (COP26) begins in earnest on October 31st in Glasgow, Scotland, following its postponement in 2020. The event is so eagerly anticipated that 30,000 official visitors are set to descend on Scotland’s “Second City” over a two-week period.
To forestall a mounting crisis in accommodating this huge influx of guests, two giant luxury cruise ships have been chartered to berth at Glasgow’s docks. However, the world’s most populous country won’t trouble the city’s straining infrastructure, as China’s leader, Xi Jinping, will reportedly not attend the event in person.
Adding coal to the fire
Only a fortnight before COP26 is due to start and the political knives were already out for China even before Xi’s reported non-attendance of the event. According to Ed Miliband, former leader of Britain’s main political opposition, the Labour party: China’s recent decision to increase coal output in order to alleviate the country’s crisis energy shortage (see Russia’s Hydrocarbon Sector Set For Long Term Gains From China’s Energy Crunch) was “deeply concerning”. In a speech at the Labour party’s annual conference, he went on to say, “we also need an ambitious target from China in this decade, peaking emissions by 2025 and declining. Being part of the club of nations means acting on climate”.
With that in mind, amid the UK Transport Secretary’s response to Xi not attending COP26 and thereby becoming “outliers rather than central to this”, China has been singled out as de-railing the UK’s plans in calling for greater reductions in carbon emissions than those already undertaken by the G20 action plan on limiting greenhouse gases.
The political rhetoric against China has also taken to interpreting Beijing’s recent actions on dealing with its energy crisis as a roll back of Xi’s promise to peak emissions by 2030. Yet Chinese Premier Li Keqiang’s speech to China’s National Energy Commission on October 9th calling for a study of coal usage in light of ongoing energy shortages was framed as a suggestion dependent on the outcome of findings; not as a definite u-turn of the 2030 promise.
At the same time, directives by government officials to raise coal production, as a short-term measure in alleviating a deepening energy crunch, is not incomparable to giant cruise liners being called in to plug an acute accommodation shortage.
Even so, many analysts believe that securing a commitment to reduce coal output in the current circumstances would be hard for any country to achieve, let alone China. For Beijing’s policymakers this has become especially complicated since public support for its government’s climate policies has waned during the energy crisis.
How does China’s fossil fuel smoke – stack up internationally?
The political focus on China in the run up to COP26 does however distort many aspects of China’s reduced greenhouse emissions policy. In the first instance, the current energy crisis is a result of Beijing closing a considerable amount of coal production in the last year. This was initiated as part of its proposed agenda in reducing carbon emissions by 60-65% of 2005 levels, by 2030. Estimates of this year’s coal contribution to overall electricity production were around 58%, down from 61% in 2020.
The singling out of China by British politicians and media also deflects attention away from the world’s two other largest greenhouse emitters, the US and India. As an example, US carbon emissions reduction will be 50-52% below 2005 levels, by 2030. So it’s less ambitious than China’s target.
To be fair, the US target comes as an officially submitted national determined contribution (NDC) for the G20 plan on committing to greenhouse gas emissions, whereas China‘s is still only an unofficial pledge. India’s 2030 carbon emissions target is below China’s, at 33-35% of 2005 levels, on which it has also only made unofficial promises.
In presenting an open and balanced picture of the main global greenhouse emitters, one should point out that China is the largest contributor accounting for 24% of the world’s total in 2018, with the US and India contributing 12% and 7%, respectively, in that year.
China also accounted for 53% of the world’s coal fired power generation in 2020. Still, its 61% dependence on coal-fuelled electricity in that year was less than several other major developing economies. For instance, India’s coal generated power was higher, at 71%, Indonesia’s roughly equal at 60%, Poland and Kazakhstan’s at 70% each, and South Africa was highest with 86%.
Needless to say, China’s global share of greenhouse emissions and coal fired electricity production is significant compared to other countries, but that’s why it has pledged the deepest cuts of any G20 economy, by 2030, and promised net zero emissions by 2060. In the latter case, this compares with US net zero emissions by 2050, while India is yet to commit to net zero by any year.
As regards scepticism often voiced over China’s promises to cut down on carbon emissions, rather than commit to official action, one can perhaps sympathise with this cautious approach, thus far, given the energy crisis which has arisen out of its widespread coal production shutdowns this year.
It’s not as though Beijing has avoided investing heavily in shifting away from its reliance on fossil fuels. To the contrary, China is the world’s largest renewable energy producer having more than double the gigawatt output of the world’s second largest, the US. India is in sixth place with one-fifth the renewable generating capacity of China.
The problem for China has been that whatever amount of coal generation has been replaced by renewable energy, it simply hasn’t compensated for surging domestic power usage. China’s emergence from the pandemic, amid the consequent demand for power that ensued, only exacerbated the uncertainties in keeping up with future domestic energy consumption. Hence, Premier Li’s suggestion for a new study to look at whether sources of energy generation need to be recalibrated.
China’s intensive climate change engagement strategy
Many of China’s critics have claimed that COP26 could become a pivotal platform for Beijing to promote its reputation, both domestically and globally, as a champion and leader in green energy. To do so, it would need to provide details on how it plans to meet its long-term climate control ambitions including recently announced plans of ending funding for coal-fired plants overseas.
Yet the Chinese leadership’s climate ambitions could sour if they were viewed as pandering to international pressure, as opposed to pursuing policies at the heart of promoting the country’s genuine self-interest. This would require balancing the needs of advancing global climate control efforts while meeting rising local energy demand.
From this perspective, COP26 may not be the definitive event that the global environmental movement and UK political class are pushing for. The Chinese leadership’s reported non-attendance of COP26 may well reflect its view that a single stage, no matter how effective a grandstand, will not be their preferred approach in conveying their plans for tackling climate change.
Instead, China’s climate control strategy is shifting towards a more low key but intensive series of international engagements and one-on-one conversations with world leaders. For instance, during the week beginning 11th October, Xi focused on climate control and sustainable development in practically all the meetings he attended.
In his last scheduled event of the week, on 15th October, Xi spoke by phone with EU council president, Charles Michel, on connecting the Belt and Road Initiative with the EU’s Global Connectivity initiative. Xi’s proposals included cooperation on climate change and biodiversity conservation, while supporting developing countries realise the UN 2030 Agenda for Sustainable Development, as early as possible.
The same day, Xi spoke with Singapore’s Prime Minister, Lee Hsien Loong, where they discussed expanding cooperation in green development, finance and climate change. The day before, Xi gave a speech at the opening ceremony of the United Nations Global Sustainable Transport Conference. One of his main points centred around maintaining the authority of the United Nations as being central for implementing the UN 2030 Agenda for Sustainable Development.
Additionally, Xi highlighted the need for prioritizing ecology by accelerating the formation of green and low carbon transportation systems amid enhancing green infrastructure, new forms of green energy and facilitating eco-friendly and low-carbon travel.
On 13th October Xi held a video conference with Germany’s Chancellor Angela Merkel, where among a review of their relations during her tenure as leader, both talked about exploring new areas of cooperation in energy transition and the green economy, recounting Germany’s appreciation of China’s efforts to address climate change and protect biodiversity.
At the beginning of the week, Xi addressed the UN 15th Conference of the Parties Leaders’ Summit of the Convention on Biological Diversity, held through a virtual interchange in Kunming, southern China. Xi promoted the concepts of carbon peaking and neutrality, by which the government would realise progress in each area through various successive stages.
Correspondingly, arrangements will be made to promote an ongoing industrial and energy restructuring strategy enabling a more vigorous development of renewable energy projects. This would include the construction of large-scale wind and solar power stations in the Gobi and China’s other deserts. In launching a slew of climate control initiatives, Xi announced the creation of a new US$233 million Kunming Biodiversity Fund to support conservation in developing countries.
While Xi reportedly not attending COP26 has led to inevitable clichéd media headlines of China “snubbing COP26”, the Chinese leader’s non-attendance doesn’t really come as a surprise. It was evident, given China’s severe energy crunch and Xi’s policy of ongoing virtual communication from Beijing, that COP26 would become only one part of China’s overall strategy in advancing long term climate control, while dealing with short term energy needs.
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Silk Road Briefing is written by Dezan Shira & Associates. The firm has 28 offices throughout Asia, and assists foreign investors into the region. For strategic advisory and business intelligence issues please contact the firm at silkroad@dezshira.com or visit www.dezshira.com
