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How US climate policy impacts our strategic leverage against China?

By Isaac Wang

Source: Global Times


Climate policy is often presented as a possible area of cooperation between the US and China in the Biden Administration’s a la carte method of diplomacy. However, the public discourse around ways to cooperate on climate change is devoid of substantive details and lacks an analysis of how cooperation impacts the dynamics of Great Power Competition.


Our policymakers need to be clear-headed about 3 things:

  • China’s economic dominance in the green economy;

  • China’s current environmental initiatives and commitments;

  • Where climate change ranks in priority relative to “Being Tough on China”;


A better understanding of the current economic and environmental context can inform us on whether our posture towards China can achieve our desired goals on climate change.


China’s Dominance in the Green Economy


In February 2019, Congresswoman Ocasio-Cortez introduced H.Res.109 in response to the catastrophic consequences outlined in the IPCC’s Special Report on Global Warming of 1.5°C, calling for the federal government to create a Green New Deal. Broadly speaking, the 10-year national mobilization seeks to achieve net-zero GHG emissions, high paying green jobs, sustainable infrastructure and industry, a healthy environment with climate resiliency, and a just transition for frontline and vulnerable communities. Few people, however, realize that China laid the foundation for a Green Revolution two decades ago, starting with intentions to grow a renewables industry in the 10th Five-Year Plan. At the time, China was already concerned about both energy security and pollution, and it predicted the green economy would be a massive commercial opportunity.


As of 2021, China leads the world in solar, wind, and hydro in terms of energy generation, installed capacity, and investment. China also leads the world in development of mass transit, which is critical to reducing emissions from the transportation sector. China has constructed ~38,000 km of High-Speed Rail to connect over 550 cities and ~7545.5 km of Subway spread out across 233 urban rail transit lines in 44 cities. China also owns 99% of the world’s electric bus fleet, adding ~9500 new electric buses every 5 weeks. For individual transportation, China is already executing on its long term plan to dominate the EV market, having invested over $60 billion in the industry and implemented strong policies to incentivize EV adoption. China currently has ~44% of all electric vehicles in the world and the largest number of public charging stations (~800,000 of the 1.3 million worldwide). In becoming the dominant player in the EV market, China also became the dominant supplier of batteries. By the end of 2020, China had 93 large scale battery manufacturing plants, while the US had 4. As a result, China is projected to have 77% of global lithium-ion production capacity by the end of 2021. On top of this, China is also the dominant player in mining and processing of rare-earth minerals, key ingredients to the production of renewables and EVs.


China’s Environmental Policy Shifts


Over the past 20 years, China has become the “World’s Factory” and has experienced the fastest urbanization in human history. As a result of its growth across all sectors, China became the largest CO2 emitter by a wide margin, despite retaining low per capita emissions. To address its environmental problems, China made major policy shifts to better achieve sustainable and balanced growth, including a commitment to achieve carbon neutrality by 2060. It recently launched its first national carbon market, based off a cap-and-trade model. It’s continuing to fund the world’s largest reforestation program (originally designed to combat desertification), which has increased national forest coverage from 12% to 22% since its inception. It’s made significant efforts in environmental conservation, setting up thousands of nature reserves and parks while also drawing ecological ‘redlines’ to restrict human and industrial activity. China has improved climate resiliency by investing in the world’s most ambitious sponge cities initiative to mitigate urban flooding issues. It’s even made significant investments in carbon capture technology to reduce emissions, such as Sinopec’s megaton CCUS project and CNOOC’s offshore CCS project.


Climate Change and Great Power Competition


It’s clear from looking at China’s strength across the green economy that the US is dependent on China to reach its climate goals, and there’s an asymmetry in manufacturing capacity at every level. If the US were to pursue an economic decoupling or a large increase in trade barriers against China, it would be mathematically difficult for the US to reach its goals in shifting its energy mix to renewables and in transitioning to electric vehicles. The US simply does not have the capacity to produce these products at scale in the short to medium term, and developing domestic capacity would take over a decade. As an example of how tensions could harm US interests, China could decide to prioritize its EV battery production for Chinese car manufacturers. This would leave US car manufacturers woefully ill-equipped to meet the battery demands of their own EV products, sinking American automakers’ chances at obtaining global market share and destroying prospects for vehicle electrification domestically. China could also choose to prioritize its own transition to renewables by restricting exports of solar and wind products. As 8 of the top 10 solar manufacturers and 7 of the top 10 wind turbine manufacturers are Chinese, any export restrictions would significantly increase the cost of the transition to renewables and would leave demand trailing supply by a wide margin. Cooperation with China in this context actually means not angering the Chinese to the point where they can negatively impact supply and derail domestic climate goals.


The second major component of climate cooperation is focused on asking China to take greater action reducing its own emissions. What should be clear from looking at China’s environmental policies is that it’s already one of the most ambitious and efficacious national programs in the world. Becoming the global leader in renewables, mass transit, reforestation, and sponge cities isn’t something that happens organically without government coordination. Is the US in a position to ask China to do more when the US itself has a climate agenda that is nowhere near as ambitious or comprehensive? The other major moral question is whether it’s fair to ask China to further reduce emissions when it bears both a manufacturing and a development burden. As the Western world deindustrialized and outsourced manufacturing to China, negative environmental externalities were also exported to China. Some believe it’s hypocritical to blame China for emissions generated to serve Western hyper-consumerism. In addition to emissions from manufacturing, China also has another 30% of the country to urbanize as well as many more to bring into the middle class. It has been and will continue to be difficult for the US (a wealthy nation with very high per capita emissions) to ask China to reduce its urbanization and decrease its economic growth The US lacks moral leverage here.


Understanding the asymmetry in power means the US cannot maintain its adversarial stance against China and expect meaningful cooperation; it lacks both leverage and moral authority. As John Kerry’s failed virtual dialogue with Foreign Minister Wang Yi demonstrated, China will not accept Biden’s à la carte method of diplomacy. The US cannot accuse China of genocide, insinuate a Covid-19 coverup, maintain a trade war, and prepare for military confrontation over Taiwan, yet expect China to be receptive to cooperation on issues of US interest. Regardless of one’s stances on these issues, the administration’s approach from a tactical perspective will not yield results. As such, Biden needs to have an honest internal discussion about where climate change stands relative to “Being Tough on China” in overall priorities, because Biden’s current approach is achieving neither climate goals nor containment goals.

Isaac Wang is currently pursuing a Master of Advanced Studies in International Affairs (MAS-IA), with a focus on Security of the Asia-Pacific.

After serving as an officer in the US Navy, Isaac worked in a variety of roles at the intersection of urban planning, technology, and public policy. He’s now hoping to bring sustainable land-use, housing, transportation, and equity issues to the forefront of the local policy agenda.