For China, COP26 is a vital marketing opportunity

The COP26 climate change summit is just weeks away, and China remains one of few major greenhouse gas-emitting countries to not have submitted a new carbon-cutting plan.

As the world’s top CO2 emitter, China plays a decisive role in the 2015 Paris Agreement goal of limiting warming to 1.5°C above pre-industrial levels. Over the past year, Beijing has announced a series of important pledges, among them hitting peak emissions by 2030 and net-zero by 2060; ending financing for coal-fired power plants abroad; and expanding the reach and rigor of China’s nascent—and so far ineffective—carbon-trading market.

But details are still lacking about how China will meet its long-term targets, the country’s current emissions trajectory is far from where it needs to be, and addressing both of those problems is now a delicate political challenge for leader Xi Jinping. That makes COP26 a crucial opportunity for China to sell people at home and abroad on its reputation as a clean-energy leader.

Step 1: Rebuild climate credibility

Beijing has a vital economic interest in the clean energy transition: Cementing the country’s reputation as a hero of climate action is key to securing support for its broader geopolitical agenda.

But public support for climate policies has waned during China’s ongoing power shortage. In an Oct. 9 speech to the country’s National Energy Commission, Chinese premier Li Keqiang suggested the country may need to pump the brakes on its effort to use less coal, and officials have already ordered the country’s coal mines to ramp up production. China’s challenge at COP26 will be to restore its climate credibility despite those developments, and to sharpen its competitive edge as the leading manufacturer of clean energy hardware.

“Before Paris, it was all about dragging China into the room. But the Trump administration let China be thrust onto the global stage with the weight of expectations of being a climate leader,” says Thom Woodroofe, a senior advisor on multilateral affairs at the Asia Society and a former climate negotiator for the Marshall Islands. “With the Biden administration back at the table in a big way, China has gone back to being painted as the villain. For Xi domestically, the challenge with COP is to put something forward that passes the credibility test, but doesn’t necessarily put China out in front of other developed countries.”

Step 2: Lean into climate competition 

For Chinese officials, there’s a fine line between being seen as climate leaders and being seen as patsies for the US, says Alex Wang, co-director of the Emmett Institute on Climate Change and the Environment at the University of California, Los Angeles. Beijing’s climate ambitions could quickly lose steam if they appear to be merely a response to international pressure, rather than something in the country’s genuine self-interest.

As COP26 approaches, diplomatic relations between the US and China are strained on climate, human rights and labor issues, trade, and China’s spate of military flyovers of Taiwan. But competition between the two countries on climate issues could be constructive, Wang argued in an April paper. Every time one country takes a significant action on climate—for example, on Oct. 12 Xi announced that construction is underway on what will be one of the world’s biggest wind and solar farms—pressure mounts on the other to follow suit, at the risk of losing both credibility and clean energy investment.

“China does care about how it looks to the world. As long as they can seem better than the US, that’s better for them. So if the US itself does better, that puts more pressure on China,” Wang said. ”The old message was, ‘resist action and blame the US.’ The new message is, ‘We’re the active and responsible ones’.”

Step 3: Iron out key details

While China has come forward with a series of pledges, many of them lack specificity. Woodroofe says Xi’s Sept. 21 coal finance phaseout announcement, for example, left several key questions unanswered:

  • It’s unclear how much the goal will restrict finance to coal plants currently under development, or whether it will apply only to future projects.
  • It’s unclear whether finance from private or state-owned enterprises will be restricted, or only finance from development banks and agencies.
  • It’s unclear whether China will restrict the use of Chinese labor and hardware for coal projects financed by a third party.
  • Finally, the goal will have limited benefit for the climate if coal financing is merely replaced by financing for natural gas plants, rather than for a broader portfolio of clean energy projects.

China also has yet to grapple with the enormous carbon footprint from its state-owned oil and gas companies. Two of these companies, Sinopec and PetroChina, have the highest operational emissions of any oil company globally, according to a Sept. 29 report (pdf) from Columbia University, but have so far done little to clean up or diversify into new areas of clean energy.

China will likely use COP26 to address some of these issues, and give clearer direction to the country’s energy companies and manufacturers about what to expect. Key announcements could include advancing the emissions peaking deadline from 2030 to 2025, and specifying what that cap should be. Officials could specify a target for reducing or ending domestic coal consumption, Woodroofe says, possibly aiming for it to provide less than half of the country’s energy by 2025 (down from about 58% today). And China could announce new contributions to global climate adaptation funds; during a global biodiversity summit hosted in Kunming on Oct. 12, Xi said China would launch a new $233 million fund to help low-income countries prevent the loss of endangered species.

“The extent to which China is ‘out and proud’ on the 1.5°C goal has become a sticking point with its developing countries compatriots,” Woodroofe says. “The fact that they’ve waited until now indicates that they will do something more, at or before the COP.”

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