In the 1980s, Deng Xiaoping famously articulated the “24-character strategy,” in which he suggested that China “keep a low profile” (tao guang yang hui, or 韬光养晦) and “never claim leadership.” This status quo strategy informed China’s foreign policy for decades and became the cornerstone of its political thought throughout the 20th and early 21st centuries. That is why President Xi Jinping’s impassioned defence of globalization, free trade and liberal economic institutions at the World Economic Forum in Davos in January 2017 surprised both domestic and foreign audiences. Xi’s speech staked out China’s position as a global political power and indicated a new, perhaps more assertive international role for its leadership. Similarly, Xi’s declaration at Davos that China would uphold the Paris climate accord, in spite of the United States’ withdrawal from it, represented an unusually forceful style of international diplomacy for Chinese leaders.
This assertive approach to climate governance has not been confined to rhetoric: in the last few years, China has undertaken significant reforms, at both the international and domestic levels. At the Paris negotiations in 2015, China committed to reducing its reliance on coal-fired power plants and to hitting peak carbon emissions by 2030. Also in 2015, the central government announced a regional cap-and-trade emissions pilot program in two provinces and five cities, which led to the establishment of a formal emissions-trading scheme, involving six major industrial regions, implemented in 2017.
While it is indisputable that China is actively engaged in climate reform, are these reforms evidence of international leadership?
To be effective, cap-and-trade systems require two things: transparent carbon accounting and credible enforcement. While the Chinese government has made great strides in generally improving its environmental transparency, a credible data collection system is a long way off: much of Chinese industry is not very effectively regulated, particularly outside of urban centres like Beijing. And enforcement of environmental regulations has long been problematic for the central Chinese government, particularly as it involves different levels of administration. The “war on smog” in Beijing received much attention this year, but the government appears to have engaged in a process where heavy industry is simply moved away from the city, rather than being shut down.
Cap-and-trade systems have long been criticized as being ineffectual as market mechanisms for emissions reduction. In 2016, the International Monetary Fund published a working paper in which it attempted to steer China away from cap-and-trade toward a national price on carbon. If a carbon tax were directly applied at the point of extraction or refining, a national carbon price would more effectively capture the amount of carbon emitted in both regulated and unregulated industries. However, China has instead chosen to adopt a hybrid strategy that is a combination of the market approaches used by the United States in the 1980s in its acid rain reduction program and the cap-and-trade scheme used by the European Union. Since the failure of the Kyoto Protocol is widely put down to a poorly enforced cap-and-trade scheme — states “gamed the system” with opaque carbon accounting and poor enforcement — it is difficult to see how the adoption of that strategy in China’s case could be considered international leadership at all.
Earlier this year, China announced it would introduce a cap-and-trade system in its auto manufacturing sector: 10 percent of domestically manufactured vehicles would have to be low- or zero-emissions vehicles. However, in September, it changed course and announced that the cap-and-trade system would be put on hold to allow the industry to adequately prepare for the new regulations. Given that the Chinese power grid is still heavily reliant on coal-fired power generation, and that using more electric cars would not necessarily result in a net reduction in carbon emissions, this general acquiescence to industry on China’s part hardly demonstrates a new commitment to emissions reduction or to increasing its international leadership.
However, China should not be held to a higher standard than are other developed countries. Canada’s fragmented climate strategy and uneven carbon pricing, in which provinces submit their own approaches to emissions reduction, has been widely criticized as being inefficient and ineffectual. Considering that Justin Trudeau’s government has said climate governance and emissions reduction are strategic priorities for Canada, our approach to climate governance is hardly innovative or rigorous. Likewise, the United Kingdom committed to an 80 percent emissions reduction by 2050 in its Climate Change Act; however, projections suggest that a 100 percent reduction in emissions by 2050 will be required if Britain is to meet its obligations under the Paris Agreement. Given that the global North historically contributed much to the accumulation of carbon emissions in the atmosphere today, perhaps these countries should be doing more. China is in good company with its “too little, too late” climate strategy.
Nevertheless, while the global North has contributed to global emissions for much longer, China has been the largest carbon and greenhouse gas emitter for over a decade. Xi’s newly articulated commitment to an ineffectual market-based mechanism that has been half-heartedly used by the other industrialized countries for decades is hardly evidence of leadership. It seems that China is not an innovator but rather a defender of the old guard.
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