Engaging China on Climate before COP26

The United States faces several challenges in engaging China on climate change. The bilateral relationship is more complex and adversarial than it was during the negotiation of the Paris Agreement in 2015, making it hard to disentangle climate from the numerous disputes between the two countries. China has also tried to brand itself as a leader on climate and is less willing to do anything that might be seen as kowtowing to U.S. pressure. A “deal” between the United States and China might be hard to reach before the upcoming 26th UN Climate Change Conference of Parties (COP26) in Glasgow. Yet such a deal is also unnecessary.

The geometry of climate negotiations has shifted since 2015. The goal then was to get a commitment to act. Today, much of the world accepts the need to lower emissions toward net-zero by or around mid-century. The objective in Glasgow is to translate that commitment into concrete near-term steps and to address the legitimate concerns of the Global South, especially on climate finance and resilience. The setting and needs for COP26 are far different than they were in 2015.

China’s views have shifted too. China sees the energy transition as an opportunity to produce and export new technologies, to improve its energy and national security, and to achieve the public health benefits from reduced fossil fuel use. China now installs more wind and solar capacity than the United States. It is a bigger market for electric vehicles than the United States. It is a major financier of energy infrastructure overseas (some of it carbon-intensive and some of it low carbon). China produces many of the components that go into low-carbon technologies. There is no longer a need to convince China to lean into the energy transition—the country is already doing (but China can move faster).

The relationship between the United States and China has deteriorated too. China wants to talk about climate in the context of the broader bilateral relationship. This is a non-starter in Washington. In fact, Washington is going in the opposite direction. Reliance on China for low-carbon energy technologies—especially solar—is a major political liability for U.S. climate goals, and it is leading to calls for strategies to boost domestic manufacturing. Faced with evidence of human rights abuses in polysilicon production in Xinjiang, the Biden administration is now seizing solar products from China. There is no appetite in Washington to make concessions toward China in exchange for movement on climate.

The typical framing for thinking about the U.S.-China climate relationship—can they make progress on climate despite their broader acrimony?—seems misplaced. The objective, at COP26 and more broadly, is to take meaningful action to lower emissions. This, in turn, mostly depends on actions at home, a point not lost on the Biden administration, which is struggling to advance a legislative agenda to match its climate ambitions. Of course, cross-border trade, finance, and investment all matter, as does a sense that other countries are stepping up—that no one is free-riding. But it is domestic politics and political economy, informed and influenced by global forces, that are setting the pace of energy transitions.

In this environment, the U.S.-China agenda on climate has four key dimensions. One is for China to stop financing coal overseas. This is a major problem, but it is not primarily a China problem. It is a coal problem. To stop countries from building coal, it is not enough to parry with financiers in Beijing (or Tokyo and Seoul, for that matter); it requires that countries, chiefly in Southeast Asia, see alternatives to coal. It is about helping them develop lower-carbon technologies. If countries stop asking China to build coal, China will follow suit. Much of the answer lies in the rest of Asia, not Beijing.

The second challenge is how to avoid the trade disputes of the past decade as countries scale up new technologies. It would be useful for the world’s major economies to agree on some rules to contain such conflicts. This is not for China and the United States to settle; it is a multilateral matter. In fact, the core need is for the United States and its partners to come up with a framework that allows for greater public support for new technologies in the context of global trade. Only then can they pressure China to curb the most excessive instances of state support for local industries and overseas dumping.

The third challenge is taxing imported goods based on their carbon intensity. The United States still needs a strategy to respond to the European proposal for a carbon border adjustment mechanism. But the United States can prevent China from building a coalition to sink the proposal and thus destroy any efforts to integrate carbon into the world’s trading regime. Until the United States outlines its own position, the most useful course of action is to keep its options open by ensuring that the European proposal remains on the table as countries digest it and propose coping mechanisms or alternatives. A fight over carbon adjustment could easily overshadow other issues at Glasgow and beyond.

The final challenge is to strengthen international support for emerging economies by boosting finance for low-carbon energy and resilience and by alleviating the debt burden that hinders so many countries from taking climate action. China is a major player in both issues. But without a unified front from the advanced economies, China can easily shirk its responsibilities. The best way to change Beijing’s actions is to spend time in other capitals and to develop a robust plan for helping developing countries at COP26. Only then can engagement with China bear fruit.

This is a big agenda. But none of it requires a grand bargain between Washington and Beijing. The key is international pressure on Beijing rather than direct negotiations with Beijing. The world has moved on from Paris. The ambition has been raised. What matters now is concrete steps to lower emissions, a roadmap to avoid trade conflicts, and ensuring that new technologies spread widely and quickly. And for that to happen, U.S. diplomacy needs to pressure Beijing from all corners, not to negotiate a deal that trades away core U.S. interests.

Nikos Tsafos is James R. Schlesinger Chair for Energy and Geopolitics with the Energy Security and Climate Change Program at the Center for Strategic and International Studies in Washington, D.C.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

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Nikos Tsafos