What does China want from a global climate agreement?

What principles might underpin a future global agreement on climate change? And what does China want from global climate policy? Alex Evans says the picture is changing, and policy makers should take note.

What does China want from global climate policy? This question – widely speculated on, rarely answered satisfactorily – is likely to become an increasing subject of discussion over the next two years as momentum gathers pace on discussions about what should replace the Kyoto Protocol when its first phase expires in 2012.

In a recently published paper [pdf] from New York University’s Center on International Cooperation, I argued that a “bidding war” is now underway between two competing views on climate change. On one side is the European Union; on the other, a camp led by the US and – at least until Kevin Rudd’s landslide election victory last weekend dramatically changed the country’s political landscape — Australia.

In the middle are the key developing countries, above all China and India, who in effect hold the deciding vote. The key battle lines are that where Europe believes action on climate change to be urgent, the US-led group does not; and where Europe is convinced of the necessity of binding targets, the US and its allies are not. 

However, on two of the biggest questions in post-2012 climate policy, the two sides now agree with each other. Neither is calling for a globally agreed ceiling on greenhouse-gas levels in the air (a “stabilisation target”). And neither side is calling for discussion of developing country targets to begin in earnest. Why? 

Opposing a stabilisation target and targets for developing countries makes sense for the US. If climate change isn’t an urgent problem, why raise the stakes by initiating discussion of a global framework more demanding than Kyoto? But for Europe, the political calculation is more difficult. Many European policy makers privately believe developing country targets to be essential. But they also judge that there is insufficient political space to allow such a discussion – and hence remain silent. 

As a result, it remains effectively impossible for any country to initiate a serious discussion about stabilisation (which would, inevitably, entail developing country targets). But there are signs that this situation may be beginning to change. 

Over the past few months, German chancellor Angela Merkel has begun to explore a new direction in Europe’s posture on global climate policy, speaking regularly about the need for a global framework based on the concept of convergence towards equal per capita rights to the atmosphere (see, for instance, her speeches to the UN General Assembly and to the UN High Level Event on Climate Change in September).

While Merkel’s approach has not yet been endorsed by other European policy makers, it is significant that, according to media briefings by German officials, her proposal results from conversations between Merkel and Indian prime minister Manmohan Singh at the 2007 G8 summit in Heiligendamm – where Singh reportedly insisted that convergence to per capita equity would be the price for Indian participation in a future deal.  

If this is the case, then this opens up the possibility of a real discussion between developed and developing countries about the principles that might underpin a future global “grand bargain” on climate change. At worst, Merkel’s proposal will have initiated a discussion of the central thorny issue in global climate policy – how to stabilise the climate while implementing the long-held principle of common but differentiated responsibilities for developed and developing countries – with no one the worse off. At best, the principles that she has set out could lead to a comprehensive deal that would manage climate change over its full life cycle, rather than in incremental periods of a few years at a time that provide less certainty for both policy makers and investors. 

All the same, it is worth noting that India’s position does not come with any price tag attached for India; indeed, the opposite is the case. For India, a global deal based on per capita convergence makes obvious sense. Indian emissions in 2004 were 1.02 tonnes of carbon dioxide (CO2) per person, while the global average was 4.18 tonnes. Even if Indian emissions grow rapidly, it will still be years before her per capita emissions exceed the global average. And because of that, a global emissions trading scheme based on convergence to equal per capita levels would be highly profitable for India. (The same basic dynamic is also true for Brazil, although to a slightly lesser extent.) 

But for China, the calculation is less clear-cut. China’s 2004 CO2 emissions were some 3.65 tonnes per person – much closer than India to the world per capita average, (though still light years away from the American level of 19.73 tonnes per person). According to International Energy Agency estimates, China’s per capita emissions level could exceed the global average by as soon as 2008. 

When this change takes place, it will represent a major watershed in international climate policy. China has until now been squarely in the same camp as the G77 bloc of developing countries, but its accession to the above average emitters’ club may introduce a much more nuanced picture. 

Whereas for India, participation in a global deal based on per capita convergence makes sense for reasons of profitability alone, the same will from next year not hold true for China. As its per capita emissions overtake the global average, it will find itself in the same situation as both the US and the EU, in that any global deal that actually stabilises the climate will involve real terms emissions reductions – regardless of whether the process of convergence to equal per capita levels happens quickly, slowly or not at all.

In this sense, whether China should support a stabilisation ceiling – and the targets for developing countries that it would inevitably entail – depends entirely on how urgent China perceives climate change to be, and how badly it wants the world to agree a solution to the problem. 

If China essentially concurs with the relaxed view about urgency of the United States, then there is no problem. But if, on the other hand, China thinks that climate-driven damages are likely to be sufficiently serious and detrimental to Chinese interests to warrant solving the problem sooner rather than later – by setting a stabilisation target, in other words – then that will necessitate the development of a Chinese view on how the resulting “global emissions budget” should be shared out. Few issues involved in China’s “peaceful rise” are likely to be as significant in their implications for the rest of the world as this one.

Alex Evans is a senior policy associate at New York University’s Center on International Cooperation and head of its global risks program. His full paper “The Post-Kyoto Bidding War: bringing developing countries into the fold” is available here.

Homepage photo by Mark Robert Wilson