Trump’s Paris Retreat is Beijing’s Opportunity

One of China’s foremost environmental analysts recently explained to me that while for many years climate change was characterized as a western conspiracy to hold China back, it all changed around 2012. Overcoming China’s testiness about western imperialist designs and bringing China into the international climate tent may in future be seen as one of President Obama’s lasting legacies.

When President Xi Jinping took charge in late 2012 he soon launched an ‘energy revolution’. He took up the call for an ‘ecological civilization’ and sent a message that coal would no longer be favoured.

Provincial governments, which had resisted Beijing’s dictats to reduce coal use, began to be brought into line. As Xi accumulated more power, by marginalizing his enemies or having them arrested for corruption, it became increasingly risky to mess with Beijing. But the provinces too are shifting away from their GDP obsession to a greater emphasis on quality of life.

The first phase of China’s national carbon market is expected to get under way this year. The Paris agreement and Xi’s constructive role in it greatly enhanced the influence of China’s environment ministry in bureaucratic tussles. Paris is now a powerful card to play, and incorporating environmental governance into policy has become the ‘new normal’.

Coal use has now topped out in China, and total emissions are expected to peak around 2022-23, well ahead of the committed date of 2030 under the Paris Agreement. Unlike the United States, China takes its Intended Nationally Determined Contribution under the Paris accord very seriously.

China’s carbon cuts

Beijing has a number of motives for taking an aggressive approach to carbon emissions. The headline one is social discontent due to appalling air pollution in the cities. Instead of closing coal-fired power stations, pollution levels could have been cut sharply by fitting scrubbers to them (as is done in the west), leaving carbon emissions untouched. But there are other reasons for cutting coal consumption.

One is to undermine the power base of some of the most corrupt officials in the country, the bosses of the coal and electricity sectors. Unlike most of China’s leaders, Xi is no a technocrat, which helps.

Beyond these domestic goals, the Party’s leadership can see a larger global dimension. Hastening China’s transition to low-carbon energy promises to give China ascendancy in the emerging renewable energy industries, industries set for massive expansion over the next decades as coal and oil combustion declines. Vast opportunities are available for the nation that manages to take the lead, and China is well on the way to doing so.

This is why Trump’s decision is not just a serious set-back to global efforts to limit emissions but also damages US economic prospects. When US companies find they must go to China to buy their energy generation equipment they will understand that ‘America first’ means America loses. Some of them can see it already.

A new world leader

At the highest level of strategy, Trump’s decision to ditch the Paris agreement presents Beijing with a golden opportunity to take on the mantle of global leadership. China has been slowly and systematically pursuing that role over some years by, for example, expanding its role in UN peace-keeping efforts.

And it has been presenting itself as the new champion of global economic integration. President Xi’s speech at Davos in January, where he condemned protectionism and lauded the benefits of free trade and investment flows, was timed to contrast with the Trumpian retreat.

The United States abandonment of the Trans-Pacific Partnership, which through more trade and investment would have strengthened US ties to East and Southeast Asia, left a hole for China to step into. The grand One Belt, One Road initiative is a pitch for global economic leadership that will grow as the United States shrinks into itself.

Climate change presents China with the opportunity to acquire new legitimacy and respect as a world leader, offsetting the damage from its aggression in the South China Sea and escalating repression at home.

Some analysts say that China is not yet ready to become the global leader, and displays a certain reluctance to seize the mantle. But faced with indecision and disorder in the west the Party leadership has often had to decide to grab a chance while it is there, or bide its time and take the risk that it will be much harder later.

US withdrawal from global climate change leadership may be too good an opportunity to let pass. And there could be no better way for Beijing to demonstrate its claimed commitment to a peaceful and prosperous world than by directing the billions of dollars promised under the One Belt, One Road Initiative into low-carbon energy systems in developing countries. Developed countries too may find the lure of Chinese lucre too strong to resist and end up with energy infrastructures stamped ‘Made in China’.