Following US President Donald Trump’s decision to quit the Paris Agreement on climate change, three questions of strategic import beg to be answered.
First, how will other large backers of the climate accord, like the EU, China, Japan and India, address the resultant deficit in financial and emission commitments?
Second, with financial assistance expected to be curtailed due to the US withdrawal, how can less-developed nations diversify from carbon-intensive development?
Third, what will be China’s role in all this as the world’s largest carbon emitter?
There is little doubt that the Paris Agreement, signed by 195 countries and ratified by 148, has won widespread support from both developed and developing countries. This outcome has been driven not only by looming climate change threats to security and livelihoods, but also by fast-growing green-economy businesses and their job-creation capacities.
It’s no wonder that American mayors, governors, academics and business leaders are rallying behind Michael Bloomberg, former mayor of New York, to submit a plan to the UN pledging to help the US to meet its Paris commitments, regardless of Trump.
Even with Paris pledges intact, some estimates put the planet on track for warming by 2.7 to 3.7 degrees Celsius over pre-industrial levels, well over the target limit of 2 degrees. Without federal regulatory and funding support, US emissions – a fifth of the global total – are expected to go down by only 15 to 19 per cent by 2025, against the pledged 23 to 28 per cent, over the 2005 baseline. The withdrawal of the United States, the second-largest carbon emitter and still the world’s largest economy in nominal terms, may trigger dire global ecological consequences.
Nevertheless, the US withdrawal may not be the beginning of the end of the planet. It could, for example, spur other signatories to redouble emission pledges. Under the Paris accord, the US cannot exit until November 4, 2020, the day after the next presidential election. However, the Trump administration has cancelled the outstanding US$2 billion of the US$3 billion pledged by America to a Green Climate Fund to help vulnerable smaller countries. This leadership vacuum in galvanising global responses to climate change demands imaginative responses from all other signatories.
The European Union and Japan are champions of green technologies and ecological sustainability, with their cities winning many green awards. They seem on track to fulfil their Paris pledges.
Relative late starters China and India are now exceeding their voluntary emission targets. China is investing more in renewable energy than any other nation, pledging a further US$360 billion by 2020. Experts now predict that China’s carbon emissions will peak, and then begin to decline, much earlier than its 2030 target. However, if only to avoid moral hazard, it is doubtful whether these large economies will want to pick up any American shortfall without a joint global effort.
Most of the Paris signatories are less-developed countries struggling to cope. Many face challenges of poverty, poor social and physical infrastructure, and a lack of capacity to diversify from an economy that is energy-dependent, with high carbon footprints. To rid themselves of the “resource curse”, many nations in Africa, for instance, have tried to diversify into upstream or downstream “linkage industries” – but few have succeeded.
Landlocked signatories from Central Asia with massive oil and gas reserves (Kazakhstan, Uzbekistan and Turkmenistan) or minerals (Kazakhstan, Uzbekistan, Kyrgyzstan and Tajikistan) remain largely unable to capitalise on their resource wealth to broaden and upgrade their economies.
While governance and other institutional deficits remain an important barrier, expanded transport and infrastructure connectivity, both with regional neighbours and the broader world, will help boost their capacity for economic transformation and ability to cope with climate change.
The question, then, is whether China’s “Belt and Road Initiative”, the largest single transcontinental infrastructure initiative the world has ever known, would be a timely boon or bane for global responses to climate change.
Many Western observers have cast doubt on the Chinese initiative. Some view it as a back door to export China’s excess capacity with very large carbon footprints. Others consider it a ploy to project China’s influence, if not dominance. Still others regard it as a reinforcement of China’s position as a global hub of the world’s supply and value chain.
Few consider its potential as an anchor for global responses to climate change.
Infrastructure projects and trade agreements signed under the belt and road already embody green objectives and provisions. After last month’s international Belt and Road Forum in Beijing, attended by more than 20 heads of state, the Chinese government wants to ensure the initiative is in line with its environmental goals.
This is stated in the national document, “Guiding Opinion on Promoting Construction of a Green ‘One Belt One Road’” – released on April 26. Among the principles listed are building an “ecological civilisation”, promoting global cooperation in a low-carbon economy, ecological conservation, technological exchange, law enforcement, effective management, green production, free finance and green consumerism.
It’s early days yet, but some green projects related to the belt and road are already taking shape. For example, the Asian Infrastructure Investment Bank and the World Bank have co-financed a hydropower project in Pakistan to the tune of US$720 million, in support of the China-Pakistan Economic Corridor. Most of the AIIB’s proposed belt and road projects for this year across Bangladesh, Indonesia and Kazakhstan involve renewable energy or an element of energy efficiency.
The Paris Agreement is in line with the UN’s sustainable development goals. These have much synergy with the belt and road plan, according to Aniket Shah, sustainable finance programme leader at the UN Sustainable Development Solutions Network. With closer coordination, and partnership with national and commercial funding institutions, further integration with the belt and road strategy will result in a new form of multilateralism, or “Globalisation 2.0”, in response to climate change.
So, while China is unwilling to take over America’s role as the world’s policeman, the country is likely to be more forthcoming in sharing leadership with a coalition of the willing, including active players such as the EU, in galvanising global support for the Paris Agreement. After all, blue skies and clean waters are part of the China Dream. For this, China is likely to use the belt and road for good measure.
Andrew K.P. Leung is an international and independent China strategist