What Would New Breakthroughs on Climate Change Mean for the U.S.-China Relationship?

The U.S.-China climate collaboration is aligned with the self interests of both countries. On the U.S. side, the Obama Administration is pushing the unprecedented regulation of coal-fired power plants. This initiative is perhaps the last opportunity for President Obama to craft his climate change abatement legacy. In order to gain domestic support, it is instrumental to leverage the climate actions of other major emitters. Since China accounts for over a quarter of global carbon emissions, working with China is crucial for the U.S. to achieve its climate target.

As for China, the incentive for climate mitigation is not only from international pressures but also due to its own need to reduce energy consumption and improve air quality. As a middle-income country, climate change is not a top priority for the Chinese government. However, since energy security and environmental pollution are closely related to carbon emissions, these co-benefits convince China to engage in increasingly aggressive mitigation efforts. By collaborating with the U.S., China can learn from the U.S. experience how to grow the economy while curbing climate and air pollutants.

The U.S. and China have made solid progress as climate change has become an important topic in all the recent meetings between the presidents. The bilateral climate collaboration started from an area that has the least impact on the economy. During the Sunnylands Summit in 2013, two countries agreed to limit the production and consumption of climate-damaging hydrofluorocarbons (HFCs). The climate diplomacy then achieved a landmark success during the 2014 APEC meeting in Beijing, when China promised to peak its carbon emissions by 2030. The momentum of the U.S.-China climate collaboration continues. In the highly anticipated State Visit in late September, presidents Obama and Xi are likely to focus on more detailed action plans, probably promoting sub-national level climate collaboration.

Climate change is one of the few areas that the U.S. and China can achieve successful collaboration. As the rivalry between two countries has intensified in recent years, mutually beneficial climate collaboration can be an important step stone to improve bilateral relationship. By working together to reduce climate pollutants, both countries not only contribute to the protection of global climate but also send a positive signal to build a healthy U.S.-China relationship.

Climate change has become one of the few areas that the US and China can improve bilateral relationship.

Climate change will no doubt be on the agenda for President Xi’s U.S. visit next week, not only because it has become one of the most constructive aspects of the U.S.-China relationship, but also because the December Paris climate meeting looms large. Last November’s U.S.-China Joint Climate Announcement helped to change the tone of the international climate negotiations in Lima last December for the better. The targets announced last November already have been submitted by both countries to the UNFCCC, and it is unlikely that they will change before Paris. Heading into Paris, there are, however, still many areas where U.S.-China agreement could have a significant impact.

Aside from providing better clarity on areas of agreement related to negotiation topics that will likely be major sticking points in the run up to Paris, the other core area for new agreements would provide subnational context to the national targets that both countries have pledged. This week’s “U.S.-China Climate Leaders Summit” in Los Angeles was a great example of how this can be done well. The announcements from the Summit were about implementation. While both countries have adopted aggressive national targets and policies, implementation ultimately must occur at the local level. It is therefore crucial to have local government leaders on board. The international community may remain skeptical of high-level pledges without the added transparency that comes with allocating national targets to provinces and cities.

China is a large country with quite a bit of heterogeneity, and different provinces are at different levels of development. To allow the poorer provinces to continue to fuel their growing economies with coal, the wealthier provinces will have to peak earlier so that overall national emissions can peak by 2030. The “Alliance of Peaking Pioneer Cities” (APPC) announced in Los Angeles is notable in that together the emissions of the 11 cities that have agreed to peak their emissions before 2030 are roughly equivalent to the total emissions of Japan or Brazil. The earliest peaks will come from Beijing, Guangzhou, and Zhenjiang, which have all announced that they will achieve a peaking of CO2 emissions by 2020, or 10 years before the national goal. However, these are all wealthier cities with declining shares of heavy industry. These cities are best positioned to lead the way, and to serve as demonstrations for many of the policy tools and technologies that eventually will need to be scaled throughout the country. But it is still crucial that the rest of the country follows suit sooner rather than later, and bringing interior and rural China in line with the achievements of the APPC cities will not be easy.

This is where expanded local cooperation can be quite important. Local level cooperation can help train local government officials on innovative ways to reduce emissions, and can be tailored to the specific circumstances of the region. It was great to see some of the work of the leading NGOs and research institutes that have been working on the ground in China for years be recognized in the bilateral agreements announced in Los Angeles. High-level endorsement of climate and energy cooperation is crucial, but ultimately it is in the cities and provinces, where the rubber meets the road. Local level cooperation is therefore an area that is ripe for expanded cooperation.

President Xi Jinping’s state visit will no doubt be an important date on any climate watcher’s calendar. Last November’s joint statement on climate change elevated the issue to a new height and gave the world a positive surprise. The agreement was important in two regards. First, ahead of the United Nations’ timeline, the two biggest emitters gave the world a preview of their intended post-2020 climate actions. China, for the first time, indicated its intention to peak its emissions. Second,
a new formulation of Common But Differentiated Responsibilities (CBDR) was agreed upon by adding in the language of “in light of different national circumstances.” This exact language was introduced into the
subsequent U.N. decision in Lima. This effectively cleared the biggest stumbling block for the negotiation in the run up to Paris.

However, the upcoming climate statement will likely not be as significant as last year’s, partly because the biggest cards are already on the table. However, this does not mean there will be any shortage of horse-trading or important political signals. Despite the new guidance on CBDR, negotiators are still struggling with how to interpret it in different aspects of the future global climate regime, and other issues such as climate finance. Thus, the The Xi-Obama meeting is a good opportunity to align the two countries on some of these issues, to reassure each other about the delivery of their targets with enhanced domestic policies and new bilateral initiatives. The final outcome of these talks is expected to further guide the U.N. talks.

The fact that the climate change discussion is relatively immune to the overall complicated bilateral atmosphere is also worth mentioning. Over the past two years, the two sides have dedicated considerable political attention in making climate cooperation a success. The pace, approach, and politics of each side’s domestic climate policy is bound to the other’s in an unprecedented way. With this in mind, strategists on the two sides should already be thinking about how to carry the valuable progress not only “to” Paris but “through” Paris, into the Post-Obama period, and also into other important bilateral discussions which have not seen as much progress.

Cooperation between cities in the United States and China through the Alliance of Peaking Pioneer Cities (APPC) will have global implications for the upcoming Paris climate negotiations in December. The most recent analysis of national pledges submitted to the UN Framework Convention on Climate Change (UNFCCC), representing around 65 percent of global emissions, show national government efforts are inadequate. The actions of non-state and sub-national actors, including cities, are therefore even more critical to filling in the gap between national pledges and what is needed to avoid catastrophic climate change. What’s promising about the APPC pledges is that the 29 combined cities represent only 4 percent of the global population but 12 percent of global GDP. Major cities in China, including Beijing and Shenzhen, which so far are among the most active cities in China on climate change, are demonstrating ambitious leadership by pledging to a 2020 peak year—a decade before the nationally-committed peak year. With the U.N. Climate Week taking place next week (Sept. 21-26) in New York City, the APPC announcement could not have been more timely to galvanize cities in other countries to step up to fill in needed gaps.

Equally important in the APPC pledge is the agreement for participating cities to publish greenhouse gas emissions (GHGs). So far, no regular reporting of carbon emissions data exists in China, at the national level and certainly not at the city level. A few of my colleagues and I commented on the need for this critical data in a recent Nature correspondence , given the global contribution of China’s emissions. The availability of these data, and cooperation between cities in the U.S. and China to develop them, will be a major step forward in reducing uncertainties that plague global estimation of how close or far we are to reaching critical limits for temperature rise.

As Junjie Zhang mentioned above, climate change and environmental issues are areas where the United States and China have had relative success in cooperation. Hopefully the success in these new local and sub-national partnerships will yield trickle-over to other areas not only of U.S.-China cooperation, but also beyond for other countries to adopt similar models.

In their joint climate agreement last November, Presidents Xi and Obama made major progress, both in committing to reduce CO2 emissions and in advancing the international climate negotiations. President Xi’s imminent trip to the U.S. presents another vital opportunity for the world’s two largest greenhouse gas (GHG) emitters to show climate leadership in the run-up to Paris.

One area of potential cooperation that would be ripe for a major announcement is mitigation of non-CO2 greenhouse gases. Short-lived climate pollutants (SLCPs), such as black carbon, methane, nitrous oxides and HFCs, not only warm the atmosphere but are also linked with the severe air pollution affecting China.

According to an expert Chinese and international team that has been meeting in Beijing under the auspices of the China Council for International Cooperation on Environment and Development (CCICED), recent scientific assessments have identified that the fast implementation of some key SLCP measures in specific sectors can have significant benefits by reducing the rate and degree of warming in the near–term (i.e. over the next few decades), providing substantial health benefits by lowering PM2.5 and ground-level ozone concentrations, and avoiding significant losses in the yields of many important crops in China. Action in China will not only benefit environmental conditions and development in China, but will also provide global climate benefits, including in the Arctic, and air quality benefits in neighboring countries and over the northern hemisphere.

China is taking major steps to control air pollution through regulation of SO2 and NOX emissions, including under its recently amended Air Pollution Prevention and Control Law. These measures are a top priority and essential to reduce human health impacts. Yet these pollutants also have a cooling effect on the climate, so unless these emission reductions are accompanied by a reduction in short-lived climate pollutants, they would lead to accelerated near-term warming in China and globally. The SLCP approach is the only way to reduce the near-term warming and counteract this effect, making an SLCP strategy especially crucial for China.

China is already taking some actions to reduce SLCPs, through both domestic policies and international programs, including reducing its production and consumption of the ozone depleting substance HCFC-22 under the umbrella of the Montreal Protocol; supporting the continued destruction of the super-GHG HFC-23, which is a byproduct of HCFC-22 production; and promoting climate-friendly refrigerants to replace high-global warming potential HFC refrigerants. Further U.S.-China cooperation could help identify gaps in SCLP implementation and promote earlier and deeper implementation of key measures that would address global warming and air pollution in the most effective way. This would include measures to reduce methane emissions in the oil and gas, waste and agriculture sectors; cooperation on policies and standards for phasing down consumption of HFCs and replacing them with climate-friendly refrigerants; and measures to reduce black carbon from a variety of sources, including diesel engines in on-road and non-road vehicles and vessels, residential use of coal and solid biomass fuels, inefficient coal combustion in small-scale industry, and the open burning of agriculture waste.

Another major climate announcement from the U.S. and China, such as an agreement for cooperation on mitigation of non-CO2 greenhouse gases, could serve to galvanize the upcoming Paris climate negotiations while highlighting one of the bright spots in the U.S.-China relationship.

The joint announcement on greenhouse gas mitigation by China and the U.S. last November injected new momentum into global efforts to avoid dangerous climate change. It recognized that the two countries have a common interest in protecting the climate, and that their leadership is needed. The forthcoming meeting between President Xi and President Obama should build on last fall’s announcement and translate political willingness into a practical action plan.

A vital step going forward is a commitment by both countries to develop detailed long-term low-carbon transition plans. Deep emissions reductions require changes in the physical infrastructure and equipment that produce and use energy. Because the economic lifetimes of many key elements in the energy system—power plants, buildings, industrial boilers, freight trucks—are decades long, decisions made today have emissions consequences far into the future. A long-term plan that takes infrastructure inertia into account is an essential point of reference for all aspects of an effective climate strategy, from short-term policy to R&D priorities to sending the right signals to businesses and investors.

Transparent sharing of such plans between countries is essential for trust-building and problem-solving. A model for this effort can be seen in the Deep Decarbonization Pathways Project (DDPP), an international collaboration among research teams from the sixteen highest-emitting countries, including the U.S. and China. The researchers—many of whom are key advisors to policy makers—have developed blueprints for sector-by-sector changes in their own countries’ energy systems out to the year 2050 needed to reduce emissions to a level consistent with limiting global warming to 2°C or less.

These “deep decarbonization pathways,” which incorporate national goals for development and economic growth, provide clear insight into the physical changes, technologies, and investment that climate protection will ultimately require, and are a necessary complement to the prevailing focus on short-term policies and incremental reductions. Open sharing of these findings has already expanded the global knowledge base on what meaningful climate mitigation entails.

For China and the U.S., transparently sharing low carbon transition plans has great value for bilateral cooperation in areas that have already been agreed on but whose implementation details remain fuzzy. For example, it provides an indispensable organizing principle for cooperation at the subnational level, among “early-peaking” cities or between states and provinces such as California and Guangzhou that have signed climate MOUs. For California itself, low carbon pathways studieshave been central to developing its leading-edge climate policies.

Other areas of cooperation for which these plans form a critical point of reference include joint technology R&D, alignment of sectoral emissions standards, and mitigation of non-CO2 greenhouse gases. They provide better understanding of both mutual challenges, such as moving electricity generation away from coal toward low carbon generation, and mutual opportunities, such as expanded markets and trade opportunities in electric and fuel cell vehicles.

China and the U.S. can send a critically-needed signal to the rest of the world before COP-21 by making a public commitment to develop and share long-term low carbon transition plans.

U.S.-China engagement on climate and clean energy is missing a key component, which is cooperation in “soft technology” areas such as system planning, market design, operations, and regulation. Consider the electricity sector, which is critical to China’s efforts to improve air quality and reduce CO2 emissions. Electricity generation accounts for 50% of China’s coal consumption and (nearly 25% of global consumption). Reducing the share of coal in China’s generation mix from its current level of about 75%, is indispensable for meeting pollution and climate goals. A key long-term strategy for emissions reductions is electrifying transportation, buildings, and industry, but to be effective this requires electricity with a lower emissions intensity.

The pathway to lower-emissions electricity in China is currently beset by a number of “transition” obstacles. Since broader economic reforms in the 1980s, China’s central government has never comprehensively reformed the electricity sector. In an era of sustained double-digit economic expansion, this mattered little. Institutional pressures were concealed by growth, and government agencies made periodic piecemeal adjustments designed primarily to encourage investment. The results were remarkable. In a span of just over two decades, beginning in 1990, China built the equivalent of the entire U.S. electricity system.

However, as China’s economic growth slows, environmental pressures mount, and electricity supply and demand conditions become more complex, the lack of a rational economic basis for the sector is becoming more evident from both cost and environmental perspectives. High curtailment (discarding) of wind, solar, and hydropower generation, for example, are rooted in a combination of poor planning, misaligned incentives, and political economy. Cost-effectively addressing these challenges requires more fundamental reforms.

Riding the global wave of deregulation, China began an electricity reform process in the early 2000s that never proceeded beyond the separation of generation and grid companies. A new reform process, begun in early 2015, promises to make deeper progress. Following Chinese policymaking practice, however, reform documents released to date provide only high-level guidance and leave implementation questions unanswered. A series of provincial pilots, likely to begin next year, will provide fodder for national reform strategies.

The U.S. government has never actively engaged China on “soft technology” issues in the electricity or energy sectors. The Federal Energy Regulatory Commission has a memorandum of understanding with China’s National Energy Agency, but provides largely reactive assistance. The Department of Energy has a number of collaborative programs with China, mostly focused on hard technology R&D. Lawrence Berkeley National Laboratory and the National Renewable Energy Laboratory actively engage Chinese counterparts on a wide range of energy issues, but this work is mostly foundation-supported.

This is a missed opportunity. The revival of electricity reform at the same time that China and the U.S. have agreed to collaborate on climate creates a real opening for government-to-government engagement. Given the importance of institutional change in both the U.S. and China for meeting CO2 emission reduction goals, greater collaboration on soft technology issues between the two countries is as important, if not more important, than traditional R&D collaboration.