China forced to strike a balance between economic growth and climate concerns

Wednesday, 22 April 2009 11:46

New SEI report analyses China’s role in future climate change mitigation.

- At a time when climate change is at the top of the global political agenda, China has come to a point where continued economic growth must be balanced with environmental limitations. Through the implementation of ambitious national targets that bear on climate mitigation, the Chinese leadership is showing that it is willing to actively participate in the global climate game. This is one of the key conclusions from a new report authored by SEI researchers Karl Hallding, Guoyi Han and Marie Olsson.

The report, entitled A Balancing Act: China’s Role in Climate Change was, like the newly published Sea Change: US Climate Policy Prospects under the Obama Administration, prepared for the Swedish Commission on Sustainable Development during a seminar in April 2009. The two reports together present a comprehensive picture of the decisive roles China and the United States will come to play in Copenhagen in December 2009.

Ambitious goals and challenging implementation
In their report, Hallding, Han and Olsson argue that China may come to play a much more important role in global mitigation of climate change than was thought only a couple of years ago. China has already been hard hit by climate change, and the impact this will have on economic growth and social stability is taken very seriously by the political leadership. China’s dilemma lies in the fact that social stability requires growth, and economic growth is fuelled by energy.

Under the banner Scientific Development Concept, the Hu-Wen administration has set ambitious targets that bear on climate mitigation and adaptation while at the same time improving domestic energy security. This includes a 20 percent reduction in energy intensity and 10 percent reduction in pollution discharge by 2010 compared to 2005 levels. These targets make China one of the top countries in the world when it comes to avoiding carbon emissions in the near future, and the only developing country with a policy to deal with climate change.

Furthermore, Chinese business men, academics and political leaders are beginning to realise the business opportunities in pursuing green technology development. Additionally, as climate change is becoming more of a geopolitical issue, China is also becoming more eager to be seen as a responsible world actor

- The time to act is now
At the same time, China has recently surpassed the US as the world’s leading carbon polluter, accounting for nearly one quarter of global CO2 emissions. China’s per capita emissions are already above world average, but still only one quarter of the US levels. Consequently, China has less room than many other developing countries to argue for increased per capita emissions.

- With its rapidly increasing emissions, China’s negotiation position is weakening as its role shifts from being a victim of other countries’ historical emissions, to a major contributor to global emissions, says Hallding, who also heads SEI’s China Cluster. He sees the coming decade to be a strategic window for China to balance opportunities and risks in relation to climate negotiations.

- China may reach a situation where the choice is to either join in with the rest of the world or be left behind, he says. However, China should not be named the big bad wolf.

- As much as the country’s emission growth trend is critical and uncertain, it also has a strong focus on developing production opportunities that are both low-carbon and competitive, an approach similar to that of the Obama administration, he says.

Low-carbon pathways trump a fossil fuel dependent future
As China’s emissions grow, so do the international voices demanding China to join in international climate mitigation. With half the population living under two dollars per day, development needs are immense. To meet global demands of climate security and the national interest of energy security and continued growth, China must find a low-carbon developmental pathway. Participating in global climate mitigation might be one way of doing this.

- There are strong arguments that China has much to gain and little to lose by playing a more active role in global climate mitigation. China has a strong self-interest in pushing for more stringent global and national commitments, says co-author Guoyi Han.

Referring to reports by McKinsey & Company which conclude that technically available abatement options could take China’s emissions to a significantly lower level compared to continuing with business as usual, he concludes that there are many green growth opportunities to be found. China’s recently implemented USD 585 billion economic stimulus package is also a major opportunity for China to seize a green recovery. However, as much as China is expected to participate actively in global climate change mitigation, its capacity and willingness to do so much depends on the rest of the world.

- Success or failure in combating climate change is determined by how well China and the rest of the world can find common ground for productive low-carbon production and continuing economic growth, Han says.

Download the report A Balancing Act: China's role in Climate Change