Climate Special 14: Clean Competition (II)

Today, we continue our series on climate cooperation and hear more from climate economist Zou Ji. In this installment, he shares a hopeful outlook on how China and the US can use their unique characteristics to prevent a climate catastrophe while pursuing sustainable development.

Transcript

Clean Competition (II)

Today, we continue our series on climate cooperation and hear more from climate economist Zou Ji. In this installment, he shares a hopeful outlook on how China and the US can use their unique characteristics to prevent a climate catastrophe while pursuing sustainable development.

Continuing the interview, NC asked: How can this vision of cooperation be turned into concrete actions?

ZJ replied: The two countries should share some fundamental common ground. First, they must respect scientific and technological facts, which remain constant regardless of differences in language, skin color, religion or political ideology.

Second, they should both acknowledge the logic of the market, which is all about supply and demand, price and profit. If there is mutual need, we can engage in exchange, and after this exchange, equilibrium of interests will be reached. There will always be price negotiations, depending on the dynamics of supply and demand. But we can talk as long as we both agree on this market principle.

Last but not least, we need a shared value of sustainable development. No one benefits from global climate crisis. Whether it is wildfires in California, hurricanes in Texas, floods in southern China or droughts in northern China, these disasters highlight the urgency of preventing such catastrophes by maintaining harmony between humanity and nature.

However, sometimes these three principles are forgotten or set aside amid geopolitical disputes. Both sides need to return to these principles. If we agree that, as human beings, these three principles are rational, then we can have dialogues and discussions while managing differences. Therefore, I believe that China and the US need to adopt a longer-term perspective and a broader vision. I think the leaders of both countries have the vision to shoulder their shared mission and responsibilities, and the ability to overcome interference from ideology and populism to use rationality to shape bilateral relations at all levels, including cooperation on climate change.

Next, NC asked: What can China and the US learn from each other in promoting green transition? And what is the potential for subnational cooperation, given all the uncertainties at the national level?

ZJ replied: China and the US undoubtedly need to learn from and inspire each other. While the Inflation Reduction Act has sparked controversy over trade protectionism, it closely resembles China’s previous policies for promoting energy efficiency and manufacturing in sectors like automobiles, electric vehicles and solar energy. Both sides could benefit from exchanging views on policy effectiveness, economic trade-offs and operational experiences.

China has valuable expertise to share, such as in the construction of large-scale wind and solar power bases in deserts such as Gobi regions and barren lands, integrating wind, solar and hydropower, and ultra-high-voltage DC transmission to deliver electricity from western energy generators to eastern energy users. China’s experience in building and operating major infrastructure projects, like its high-speed rail system, could offer insights for the US. 

Energy Foundation China has been a bridge for dialogues between Chinese provinces and cities and California on renewable energy for years. Non-fossil energy accounts for about 30 percent of China’s electricity generation. China can learn from California’s experience in energy storage, power dispatch, its electricity system and pricing reforms, as well as peak load regulation. Since California’s rolling blackouts in 2020, its grid has undergone a significant transformation, with non-fossil energy now making up about 61 percent of its power mix, with wind and solar power accounting for approximately 40 percent. Nuclear and hydroelectric power make up another 20 percent, plus some biomass energy. Its grid safety indicators have also improved.

Exchange and collaboration among scientists, experts and other professionals from both countries should continue. Energy Foundation China is planning to support young students and top business schools from China and the US to co-develop case studies on the green economy. This can help cultivate talent in the field.

The Sunnylands Statement [on Enhancing Cooperation to Address the Climate Crisis] lists subnational cooperation as a key priority in tackling climate change. While the US’s withdrawal from the Paris Agreement will make federal level activities more challenging over the next four years, cooperation will not come to a complete halt. California, Washington, Delaware and Maryland can continue cooperation and exchange with Shanghai and provinces such as Jiangsu, Guangdong and Sichuan.

Without support from the US federal government, climate cooperation at the subnational level will inevitably be affected. With federal support, Chinese representatives might find it easier to obtain visas for visits for exchange programs. The federal government could provide support policies. But considering that US states are strongly independent in legislation, authority and financial power and the federal government does not provide much financial support for such activities, provincial and state exchanges would not be greatly impacted.

Commercial cooperation also shows potential for growth. Both sides have already invested heavily in renewable energy. They need to find markets and profit. As for cooperation among professional researchers, as long as travel and visas remain accessible, there will always be a need for them to communicate and collaborate. Indeed, the prospect for subnational cooperation is very promising.

NC asked: How can China and the US collaborate on global climate governance in the future?

ZJ said: Global governance revolves around three key factors: power, interests and mechanisms. Power means political power, referring to a nation’s diplomatic, political, economic and military capabilities. Interests include both national interests and global public interests. When it comes to global climate governance, the core interest has shifted. In the past, higher growth relied on higher emissions. More than a decade ago, China heavily invested in real estate, steel and cement industries. Nearly every household wanted to buy a gasoline-powered car. At that time, the right to emit, which was equivalent to the right to develop, was the core interest. Today, as China shifts towards green and low-carbon industries, it might no longer need to emit so much.

Mechanism means the systems needed for governance, including international laws, supervision reports and information verification. These three instruments are crucial for climate governance, in a similar way as for world trade and investment regulations. A compliance mechanism must be in place to facilitate exchange, negotiation and communication among all parties.

Based on these core elements, as I observe, the future of global climate governance faces severe challenges and uncertainties. I witnessed the formation of the Paris Agreement and understand the immense effort it took to reach. I hope it will not only continue but also grow stronger. But the US’s withdrawal from the agreement twice no doubt has dealt a significant blow to its political foundation and disrupted the China-US joint leadership that was crucial to its success. The damage from the first withdrawal [in 2017] might not be too big. After the US rejoined the agreement [in January 2021], there was renewed momentum. The two countries issued the China-US Joint Glasgow Declaration [in November 2021] and the Sunnylands Statement, which injected much-needed political will. Unfortunately, this progress was short-lived. The second withdrawal may undermine trust between the two nations. The Paris Agreement was built for global common interests, and a second US exit will deal a devastating blow to these shared goals.

Geopolitics has a significant impact on the progress of climate governance. At the heart of all this lies political trust. Without political trust, unity and cooperation among nations can easily fall apart. I believe that China is deeply committed to the path of low-carbon development. However, whether China and Europe or China and the US can continue communication and cooperation depends largely on the dynamic trajectory of geopolitics.

I wonder if the China-US competition could formally become part of the global climate governance agenda. I hope so. The game is changing. In the past, everyone focused on asking others to set ambitious carbon reduction targets, which is likely to continue, but meanwhile countries reach a basic consensus that the future of the global economy will be a green and low-carbon economy. If so, the competition will no longer be about burden-sharing, but opportunity cocreation – the competition will shift to how that cake is shared and who gains the upper hand in doing so.

This shift is already underway. Many entrepreneurs in the US have taken notice. In the past, economic competition revolved around metrics like steel production, GDP growth and the types of cars, airplanes, ships and machines manufactured. In the future, the focus will be on who can achieve lower carbon growth and higher energy efficiency.

Competition can be constructive, like the Olympics. But if this competition is simply about imposing tariffs, it raises doubts about whether the outcome truly benefits consumers of both countries and their sustained national economic growth. I wish to see and participate in more dialogues about it, maybe it can be a new agenda in the future. As the technological revolution centered on renewable energy continues, both major powers need to seriously consider what the real race is about and where the strategic high ground lies. This would mean a shift from being tight-lipped about competition to clearly defining the goals, rules and outcomes of competition.

The way China and the US approach competition in climate governance reflects broader international relations, particularly their overall bilateral ties. In the past, we avoided talking about competition, emphasizing instead that China and the US were in a win-win partnership. Could we add a new agenda in the future, one that openly acknowledges competition that will never escalate into confrontation?

If competition leads to rising prices and costs, ordinary people will suffer, making competition between nations and markets pointless. Instead, we need to focus on how to engage in healthy competition, and shared interests and complementary areas will increasingly become key to shaping China-US relations, balancing power, goals of competition and converging interests.

Well, that’s the end of this week’s podcast on China-US climate cooperation. Our theme music is by the famous film score composer Roc Chen. We want to thank our writers Xu Ming and Li Jia, translator Du Guodong, and copy editor Pu Ren. And thank you for listening. We hope you enjoyed it, and if you did, please tell a friend so they too can understand, The Context!