The U.S.-China Climate and Energy Relationship

Part of Chapter 10 | Climate Change and Energy

By Joanna Lewis
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China is of utmost importance in the climate change challenge due to its role as the largest emitter of greenhouse gases in the world. As such, in recent years it had become a strategic partner of the United States, the second-largest national emitter of greenhouse gases, in policy discussions surrounding climate change and clean energy. During the Obama presidency, the United States pursued an aggressive bilateral agenda to scale up cooperation with China on clean energy and climate change. The Trump presidency brings a new approach to the issue—one that moves the United States further away from its allies, from its alliances on climate and energy with China, and alienates it from ongoing multilateral climate negotiations.

The bilateral relationship

The U.S.-China relationship is of particular strategic importance, and clean energy cooperation has become the centerpiece of the bilateral relationship. The United States and China have been cooperating on climate change and clean energy for several decades.1 Since 2009, this cooperation has been greatly enhanced and expanded, resulting in thousands of people from both countries working together to do collaborative research, to share experiences and information, and to develop commercial ventures to deploy clean energy technology.2

The Obama administration made climate change a cornerstone policy issue, particularly during the president’s second term. Progress on the Clean Power Plan, along with several other policies aimed at reducing emissions from the power and transportation sectors, laid the foundation for the United States to put forth new international climate targets. This renewed domestic focus on climate policy gave the United States the moral authority to engage with key countries, including China, to try to mobilize the adoption of a new global climate treaty.

Climate change and clean energy has been a powerful, unifying issue in the U.S.-China bilateral relationship, until recently. High-level engagement between the leaders of the two sides, including but not only through the Strategic and Economic Dialogue (S&ED), allowed both countries to discuss politically sensitive issues, from trade barriers to international security, and it ensured that the two largest national economies in the world had a diplomatic means of diffusing potential conflict.3 With President Trump’s decision to withdraw from the Paris Agreement, China’s leadership has responded with the disappointment and disapproval now shared by many other countries around the world. Despite the U.S. withdrawal, China has made clear that it will stick to its commitment to fulfill its Paris pledges.4

Multilateral achievements

In 2016, there was a concerted shift in the nature of bilateral climate change agreements, moving away from issues of exclusively bilateral importance and toward using the bilateral relationship to shape multilateral responses. The U.S. effort to reach a global climate deal in Paris through bilateral agreements with China is one such example. Two other key areas where bilateral agreement between had important implications for global climate action is in the Montreal Protocol, and the International Civil Aviation Organization (ICAO).

The Paris Agreement

In 2014, the U.S. government made a strategic decision to announce its intended nationally determined contribution (INDC) to the Paris Agreement jointly with China. The United States announced its intention to achieve an economy-wide target of reducing its emissions by 26–28 percent below its 2005 level by 2025 and to make best efforts to reduce its emissions by 28 percent, while China announced its intention to achieve the peaking of CO2 emissions around 2030 and to make best efforts to peak early and to increase the share of nonfossil fuels in primary energy consumption to around 20 percent by 2030.5

The joint announcement had a major impact around the world. It was the first time China had come forward so early and so aggressively to announce its climate targets, and the first time the two largest emitters made such an announcement jointly. The announcement set the stage for other countries to announce their own climate targets over the following months, so that by the time leaders gathered in Paris at COP 21 in December 2015, 180 countries representing nearly 95 percent of global emissions had already announced their own climate targets.6 This was crucial to building the international momentum that led to a successful new agreement being reached.

The Kigali Amendment

The Montreal Protocol on Substances that Deplete the Ozone Layer (a protocol to the Vienna Convention for the Protection of the Ozone Layer) has been hailed as the most successful environmental treaty in history.7 While the Montreal Protocol was not intended to be a climate agreement, sometimes addressing one problem creates unintended consequences, especially when dealing with complex air pollution chemistry and greenhouse gases. The phase-out of CFCs led to the creation of hydrofluorocarbons (HFCs), an ozone-depleting substance (ODS) substitute that can be up to 10,000 times more potent than carbon dioxide. President Obama and President Xi first discussed the issue of phasing out HFCs at the Sunnylands summit in June 2013. Between 2013 and 2016 bilateral discussions continued and momentum built in the international negotiations to put forth an amendment to the Montreal Protocol to address HFCs.

On October 15, 2016, at the 28th Meeting of the Parties to the Montreal Protocol in Kigali, Rwanda, 197 countries reached an agreement on an amendment to phase down HFCs. Under the amendment, countries committed to cut the production and consumption of HFCs by more than 80 percent over the next 30 years. The U.S. Environmental Protection Agency (EPA) estimates that this phase-down schedule will avoid more than 80 billion metric tons of carbon dioxide equivalent emissions by 2050, and avoid up to 0.5 degrees Celsius warming by the end of the century. Developed countries will begin reducing HFC consumption beginning in 2019.8 Developing countries were notably divided into two groups, with China falling into the first group of countries that must freeze consumption in 2024, and India falling in to the second group, that will not begin freezing emissions until 2028. All developing countries will also be eligible for financial support to aid in their transition away from HFCs.

The CORSIA Resolution

One category of carbon dioxide emissions that has long been omitted from international climate talks is that of aviation emissions. Airplanes are responsible for about 2.5 percent of global carbon dioxide emissions, but also emit oxides of nitrogen and produce contrails, the combined effects of which could more than double aviation’s impact on global warming.9 Aviation emissions were not included in the Kyoto Protocol or the Paris Agreement, in part due to the challenge of addressing cross-border emissions.

At their meeting in March 2016, President Obama and President Xi committed to working together to reach a successful outcome this year on the ongoing negotiations to reach a deal on a global market-based measure for addressing greenhouse gas emissions from international aviation at the ICAO. After close bilateral engagement between the United States and China, as well as extensive multilateral negotiations among ICAO’s member states, an agreement was reached on October 6, 2016. The ICAO Carbon Offset and Reduction Scheme for International Aviation (CORSIA) resolution says that countries will cap aviation emissions at 2020 levels by 2027. The rules are voluntary until 2027, however, and countries are encouraged to opt in prior to that date. As of 12 October 2016, 66​​​ states, representing​ more than 86.5​ ​​​percent of international aviation activity, have stated their intention to voluntarily participate in CORSIA.

Opportunities for Expanding Bilateral Cooperation

President Trump’s approach to dealing with China will likely be decidedly different from that of the Obama administration. The primary bilateral dialogues with China, the U.S.-China S&ED and the Joint Commission on Commerce and Trade (JCCT), have been restructured by the Trump administration to potentially deemphasize energy and climate cooperation. The new framework for high-level negotiations, the “U.S.-China Comprehensive Dialogue,” has four main tracks: diplomacy and security, economics, law enforcement and cybersecurity, and society and culture.10 It is not clear which of the components of the S&ED and JCCT might be preserved in this new framework but even less clear is where the past focus on bilateral energy and climate cooperation fits into this new framework, or who in the administration would champion such discussions.

There are several areas where the United States and China could develop new programs of cooperation that would be of mutual interest. This includes dialogue topics ranging from domestic investment environments and bilateral trade in low-carbon goods and technologies, to climate-resilient development and national security. As the two largest clean energy economies in the world, Washington and Beijing might mount a joint effort and exchange on job training in key clean-energy industries, including in coal communities. In addition, as the role of China in global multilateral financial institutions grows, there is room for both countries to shape the use of public finance for green and low carbon investment, and to help determine the rules for such investments around the world.

Conclusions

Bilateral engagement between the United States and China on climate change allowed for the two countries to leverage their size and significance to mobilize action from other countries, thereby helping the United States achieve several multilateral outcomes in which it had a stake. As U.S. climate change politics evolve under the new Trump administration, this will most certainly influence U.S. bilateral engagement with China. While there are many untapped areas for fruitful cooperation, it is possible that not only will cooperation not be expanded, but also that existing cooperation will be greatly diminished. If so, the United States will lose the leverage it gained from partnering with China to help shape global multilateral environmental processes.

The next four years will no doubt bring significant changes to the U.S. relationship with China, and climate change may no longer be at the center of bilateral or regional discussions. Even if bilateral engagement is scaled back, domestic climate action in China is likely to continue. China has launched sweeping climate change policy initiatives at all levels of government and throughout the economy, and continuing these programs is in the self-interest of China’s leadership.

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[1] Joanna I. Lewis, The State of U.S.-China Relations on Climate Change: Examining the Bilateral and Multilateral Relationship, Woodrow Wilson International Center for Scholars, China Environment Series 11 (2010): 7–39, https://www.wilsoncenter.org/sites/default/files/Feature%20Article%20The%20State%20of%20U.S.-China%20Relations%20on%20Climate%20Change.pdf.

[2] United States Department of State, U.S.-China Memorandum of Understanding to Enhance Cooperation on Climate Change, Energy and the Environment, July 28, 2009, https://2009-2017.state.gov/r/pa/prs/ps/2009/july/126592.htm.

[3] Mercy A. Kuo, “Assessing the US-China Strategic and Economic Dialogue: Insights from Daniel B. Wright,” The Diplomat, July 20, 2016, http://thediplomat.com/2016/07/assessing-the-us-china-strategic-and-economic-dialogue/.

[4] “Trump Gives the World More Reasons to Save Our Planet,” China Daily, June 2, 2017, http://usa.chinadaily.com.cn/opinion/2017-06/02/content_29589556.htm.

[5] White House, “U.S.-China Joint Announcement on Climate Change,” November 11, 2014, https://www.whitehouse.gov/the-press-office/2014/11/11/us-china-joint-announcement-climate-change.

[6] White House, “Remarks by President Obama at the First Session of COP21,” November 30, 2015, https://www.whitehouse.gov/the-press-office/2015/11/30/remarks-president-obama-first-session-cop21.

[7] Patrick Low, “Why the Montreal Protocol Is the Most Successful Climate Agreement Ever,” South China Morning Post, October 26, 2016, http://www.scmp.com/business/article/2040177/why-montreal-protocol-most-successful-climate-agreement-ever.

[8] United States Environmental Protection Agency, Recent International Developments under the Montreal Protocol, 2016, https://www.epa.gov/ozone-layer-protection/recent-international-developments-under-montreal-protocol.

[9] Jessica F. Green, “The World Is about to Get Tough on Aviation Emissions. Here’s What You Need to Know,” Washington Post, October 14, 2016, https://www.washingtonpost.com/news/monkey-cage/wp/2016/10/14/the-world-is-about-to-get-tough-on-aviation-emissions-heres-what-you-need-to-know/.

[10] John K. Veroneau, Timothy P. Stratford, and Ashwin Kaja, “Trump, Xi Kick Off Economic Relationship,” Global Policy Watch, April 21, 2017, https://www.globalpolicywatch.com/2017/04/trump-xi-kick-off-economic-relationship/.