US has all but ceded climate helm to China

What happens if the United States is not ready to lead the world in its pursuit of clean energy transition? US President Donald Trump has unnerved the world with his policy moves and public comments, including those on climate change. During his meetings with top world leaders, Trump has ignored climate change and instead focused on national security and trade. It’s another matter that climate change had been a major area of cooperation among China, the US, the European Union and Japan.

At the start of last year, the US was well positioned to lead the global fight against climate change. But last month Trump issued an executive order, rewriting the previous US administration’s Clean Power Plan. He also ordered a recalculation of the social cost of carbon, lifting the moratorium on coal mining on federal land, and that climate change be disregarded in other areas of national policymaking.

By reversing his predecessor Barack Obama’s policies on clean energy and carbon emissions, Trump is rolling back the new model of cooperative global governance embodied in the 2015 Paris climate agreement. The Obama administration had argued that other countries’ commitment (along with that of the US) to reducing emissions under the Paris agreement was expected to create a big new market for the US’ clean energy companies.

Over the past eight years, the Obama administration and China’s leadership succeeded, to a large extent, in prioritizing climate action as part of their bilateral agenda. China became much more cooperative with the US on climate change since the UN climate change conference in 2009, and both sides achieved tangible results in reducing emissions and enhancing global cooperation. The US-China Joint Agreement on Technology Cooperation in 2014, for instance, laid the foundation for the Paris agreement a year later.

But the Trump administration’s moves will not only prevent the US from playing a leading role in the fight against climate change, but also undermine American interests.

First, as the US veers away from clean energy technology, China is on way to becoming the leading supplier to a rapidly growing global market for clean energy. The Intended Nationally Determined Contributions, embedded in the Paris pact, are expected to generate $20 trillion in new demand for renewable energy and energy efficiency technologies, and if Trump undermines the US clean energy sector, there is a good chance that the clean energy technologies the world uses will come from China.

Second, if Trump downgrades US commitment to the Paris targets, it could give China a cause to slow-walk its own emission reduction, while still claiming the global leadership mantle on emission reductions.

In contrast to the US, China is looking for new partners to take forward its global climate efforts, and President Xi Jinping has vigorously defended the Paris accord, saying it must not be derailed. China is helping drive renewable energy’s global expansion, taking the country’s actual climate leadership beyond mere rhetoric. Its emission reduction targets are enshrined in the 13th FiveYear Plan (2016-20), with a financial outlay of $360 billion for renewable energy by 2020. It also seems on way to reaching its emission peak five years before schedule. This year the Chinese government will establish a national carbon market, which, with 5 billion tons of carbon trade each year, will be the largest in the world.

Though some 200 countries signed the Paris agreement, G20 countries account for more than 60 percent of the global emissions. Given the heightened financial risks associated with climate change, G20 countries implementing new rules can ensure a smooth transition to a more clean energy economy. China can work with India, Indonesia, Japan, Germany and France to continue to devise a new global cooperation paradigm that takes account of the diverging aspirations of different economies.

Besides, economic trends provide incentives for clean energy actions. Renewable energy generation accounts for the vast majority of new jobs in the energy sector. In fact, the solar and wind power sector employs more people than the highly automated coal, oil and gas industries combined.

Also, private sector players across the world are making the clean energy transition all but inevitable, and their agendas will not change simply because the US has started thinking differently. As long as this remains the case, China and other emerging economies will continue to pursue the clean energy transition.

These are difficult times, but collectively we can decide what kind of world we want to live in.