China’s Climate Diplomacy 2.0

Can China lead the fight against global climate change? The question itself sums up the phenomenal transformation of China’s climate diplomacy in the past decade. Only 10 years ago, Chinese leadership on climate change was not even a consideration. On the contrary, after the COP 15 in Copenhagen in 2009, China was accused of “holding the world ransom” and seen by many as a climate “laggard.” Today, a steadfast commitment to the Paris process, leadership in the use of renewable sources, and active engagement in a number of multilateral initiatives beyond the COP negotiations have made China an indispensable party to all matters concerning global climate change.

China’s top climate negotiator, Zhao Yingmin, may insist that climate change requires mutual collaboration and commitment by all, but China’s negotiating leverage is in high demand. At the COP 25 meetings in Madrid in December, the expectations for Chinese leadership ranged from critical support in reining in Brazil’s excessive demands to ensuring the support of the rest of Asia – as one EU delegate observed: “If we get China, the rest of Asia will follow.” Even billionaire Michael Bloomberg was unequivocal with regards to the U.S. positioning: International efforts to combat climate change will require a new U.S. administration to first rebuild its relationship with China.

And it doesn’t stop there. This year, China will host one of the most important global forums on biodiversity in Yunnan. In the months before the COP 26 summit in Glasgow, China is also expected to work on a separate climate deal with the European Union.

Certainly, the question of leadership on climate change is critical. However, it is even more pertinent to begin understanding the underlying phenomena in China’s turnaround and the evolution in its strategic positioning along the hallways of climate diplomacy. It is thus worth underscoring the previous point once again: In 10 years, China has seamlessly transitioned from a purported sideliner and free rider to a well-recognized and indispensable participant and, now, a leading authority expected to set up the 2020 agenda (with 2020 also a critical year for the Chinese government in terms of its domestic policies). In analyzing what is next for China and the world, it is therefore important to recognize China’s climate diplomacy within the context of China’s broader geopolitical vision. This will allow for conceptualizing the scope of Chinese diplomatic engagement not only within the parameters of climate change, but also with regards to its overarching geostrategic positioning and ambition. The current Chinese government approach to climate diplomacy is not, and will not be, about climate change alone.

Indeed, students of Chinese ancient strategies might recognize in the evolution of China’s climate diplomacy a classic reference to one of the ancient 36 stratagems, namely “exchange the roles of host and guest” (反客为主). The approach indicated in this stratagem is based on the concept of taking a gradual approach to a situation, whereby an outsider (or guest 客) must create an environment that allows him to slowly gain a position of respect, then move on to gain trust and be assigned to key roles, and finally overtake the role of the community leader (or host 主). Far from suggesting a conspiracy theory (some tend to describe the ancient stratagems as “all about deceit, misdirection, and dominance”), this stratagem can be seen as a primer in contingency, exacting careful sequencing of steps, consideration of all circumstances, and calculation of opportune moments.

But what does this mean in terms of China’s climate diplomacy, the global action against climate change, and broader geostrategic positioning? It is important to understand three opportune moments that the Chinese government has leveraged in the process of becoming an indispensable party to any climate change conversations. These opportune moments have not only propelled China above and beyond the unenviable place of an outsider and free rider to the coveted position of indispensable partner and active leader; but are also suggestive of the type of strategy and future engagement that the Chinese government would want to pursue. And, as I will explain below, although closely aligned with the policy, rhetoric, and international discourse around climate change, the potency that these opportune moments generate could provide China with global leverage well beyond the fight against global climate change.

Opportune Moment #1: United Nations Champion Par Excellence

While many have associated a Chinese climate leadership moment with the announced U.S. withdrawal from the Paris Agreement, there is another profound shift affecting global governance structures that China has actively exploited: UN financing. The United Nations is dealing with its worst funding deficit in a decade due to $1 billion of unpaid dues from the United States. The situation is so dire that UN Secretary General António Guterres recently announced that the organization would be unable to pay staff salaries. Even vital, life-saving UN programs are closing due to lack of funds.

At the end of 2018, China had already become the second largest contributor to the overall budget for the organization, providing a much needed financial lifeline to UN agencies and programs (most notably China has also become the top funder for  the UN Peacekeeping operations). This means plenty of leverage in setting up programs, high-level staff appointments in key UN agencies, and crafting project implementation policies. With the help of strategic financing, China’s climate diplomacy is now seamlessly integrated with the agenda of the UN environmental arm (UNEP), where China has become a key beneficiary. China and UNEP are now actively developing joint capacity building programs in Asia and Africa, and the newly formed China Trust fund covers UN environmental policy and governance work in 81 countries. Even the flagship Belt and Road Initiative is aligned with UNEP and 20 other UN agencies into an International Green Development Coalition (BRIGC).

Opportune Moment #2: Green Financing and Renewable Energy

While the Trump administration’s reticence regarding climate change has deeply affected research and funding in alternative energy sources in the United States, China has wasted no time in becoming the leading producer, exporter, and investor when it comes to renewable energy. This has afforded China not only political and economic but also moral clout with those advocating for a radical shift to renewable energy sources. The title of the world’s renewable energy superpower has also opened up possibilities for multiple new transnational and transgovernmental coalitions and collaboration platforms, such as the EU-CHINA NGO Twinning Program, providing China with new mechanisms and institutional means to steer conversations and develop agendas across sectors.

China has also taken on the leadership in green finance – an investment area that grew 34 percent in just two years and in early 2019 had over $30.7 billion in funds. It has also positioned itself at the helm of green finance, with activities spanning both the international and domestic settings. To pick just a few: China was the one to officially introduce green finance on the G-20 agenda in 2016; it is the second largest green bond issuer in the world; and, by 2020, it will require all listed companies in the country to disclose their environmental plans and spending.

China also has plans for the world’s largest national carbon trading scheme. In a bid to be a leading player in the carbon market, the Chinese Emissions Trading Scheme (ETS) is meant to cover a quarter of global CO2 emissions. The Chinese ETS ambition also explains why Article 6 negotiations around carbon markets at the COP meeting in Madrid was a top priority for the Chinese delegation. Notably, China is exploiting multilateral partnerships in the area of carbon markets as well, most recently joining the newly announced World Bank-led coalition, Partnership for Market Implementation, aimed at providing technical assistance for the implementation of carbon pricing and market instruments.

Opportune Moment #3: Responsibilities Discourse

For climate negotiations, the principle of “common but differentiated responsibilities” (CBDR) dates back to 1992. In essence, the principle is meant to acknowledge the common goal of all nations to combat climate change, while also enshrining the understanding that nations need to abide by different responsibilities and obligations. The call is especially directed toward rich countries whose economic development came alongside unrestricted burning of fossil fuels as well as exploitation of regions that now comprise the majority of the underdeveloped world.

China has taken every opportunity to bring the CBDR principle to the fore. At the Madrid COP in December, along with its fellow BASIC members (Brazil, India, and South Africa), China declared that the climate negotiations are imbalanced because there is a lack of progress on developed nations’ commitments toward supporting developing nations. The group also asserted that “ambitious implementation of developed countries’ commitments to provide support to developing countries is a precondition to any discussion on progression of current commitments.” Earlier in 2019, the group also urged developed nations to meet their historic responsibility. In an unprecedented move, China went even further in commenting on the Australian prime minister’s insensitivity toward the Pacific Nations calls for climate action, and blasted Australia’s for acting like a condescending master.

While such remarks and voices demanding accountability and responsibility still fall on deaf ears during COP negotiations, the position is notable for presenting a different angle on the question of climate justice. Consider, for example, that for activists and delegates from developed nations, climate change has been closely associated with the notion of rights. Both in the United States and Europe, a growing number of climate litigations against governments and corporations are, in their essence, based on alleged breaches of individual, community, or future generations’ rights.

As the spat with Australia over the Pacific Islands suggests, for China, positioning climate justice demands as a question of historical responsibility is a way to present and champion a common platform with developing countries. It also affords the government the opportunity to bring in the question of justice while avoiding a (human) rights discourse.

What Does This All Mean in Terms of Chinese Leadership?

First, don’t hold out hope for a radical transformation of the climate change process. Going back to the ancient stratagems, while the strategy manual meticulously details the steps for a leadership takeover, the process itself does not imply a radical change. The book does not comment on whether a change in leadership also means a transformation of the existing order. Instead, the person who was only a guest (or outsider) actively transforms his position to become the host (or leader) of the same order and same community. Judging from the three opportune moments presented above, as well as the current government vision, China’s climate diplomacy is certainly not geared toward the type of radical system transformation that climate activists have called for. As the Ministry of Ecology and Environment affirmed before the Madrid COP meeting: “China has regarded addressing climate change as a great opportunity to achieve high-quality economic development and promote ecological progress.” The intention therefore is to work within the parameters of both the current global governance and financial markets systems. And while China may seek to (re)shape some of the existing institutions and mechanisms, engagements at present do not indicate an intention to abolish or create alternative mechanisms.

Second, pay attention to the geopolitical implications of climate diplomacy. The Chinese government’s use of the three opportune moments is also suggestive of a strategic engagement that goes above and beyond the fight against climate change. As mentioned above, using environmental protection as a platform, China has now integrated its flagship Belt and Road Initiative within the UN system. This alone provides multiple opportunities to engage with partner countries outside and in addition to the standard Belt and Road framework of bilateral agreements currently covering mainly infrastructure projects. The UN system therefore affords China a new level of geopolitical positioning. It provides an unprecedented gateway to leverage political influence and permeate various social and economic layers of countries and communities around the world.

China’s leading role in green financing can also be seen as a strategy for positioning at the center of global finance and investment. Here, worries that green financing is in fact not always that green can also be interpreted as sign that the Chinese government may not be championing green initiatives for the sake of the environment alone but rather as a vehicle to have a key role in a rapidly developing new markets.

Third, China uses flexibility is maximize opportunity. As the ancient strategists dictate, a gradual approach operates like the flow of calm water: it requires persistence, flexibility, and correct positioning, not force. Today, Chinese climate diplomats and government officials are often seen as nebulous and vague in their comments. Dodging questions might be frustrating, but it requires no knowledge of ancient Chinese strategy or Machiavellian politics to understand that this is what flexibility and correct positioning are all about. The point here is that flexibility also means opportunity: The flow of water can be shaped and directed. Rather than seeing it as a frustration, negotiating counterparts could use the vagueness and flexibility as an opportunity to help (re)shape and (re)formulate some Chinese negotiators’ positions.

This is not wishful thinking. As some analysts have recognized, the Chinese government’s views are not monolithic, but evolving and shapeable. This has allowed the Belt and Road Initiative to continue thriving despite various hurdles and obstacles. And as far as climate diplomacy is concerned, there are plenty of signs that the Chinese government is carefully listening to the beat of the global climate conversations. Consider, for example, that “youth mobilization” has now become a top priority for the Chinese government response to climate change. In a bid to integrate and capture popular sentiments, this policy now comes along with a platform to “Share your ideas with China’s Premier,” launched in the eve of the COP 25 in Madrid. Naturally, the link is prominently featured on the Ministry of Ecology and Environment website.

China’s climate diplomacy is emerging as a great geostrategic vehicle, allowing the country to integrate itself in the hallways of global governance and global finance in unprecedented and profound ways. It has also given China the leverage to become an indispensable partner for multiple global and local initiatives around the world. Understanding China’s positioning and leveraging its own propensity toward careful calculation and flexibility might be the best bet in co-constituting global priorities and ensuring that China will act as a responsible co-host of the global community.