Chinese President Xi Jinping applauds during a meeting in Beijing, September 8, 2020. Photo: Reuters/Carlos Garcia Rawlins/File Photo.
Geopolitical developments on climate change in the recent weeks show that the climate for action is changing for good. In a clear race to the top, heads of major economies have announced targets to net zero emissions over the next three to four decades. Specific policy measures, if implemented in spirit, could make progress on global climate action.
The most significant announcement came from President Xi Jinping: China will aim to peak emissions before 2030 and for carbon neutrality by 2060. Details on the roadmap to neutrality are pending, and the larger question of China’s funding of carbon-intensive infrastructure projects around the world remains unresolved. China, the world’s largest emitter, is also the largest financier of energy infrastructure. Financial Times recently reported that China’s environmental ministry supports placing “polluting Belt and Road projects on a negative list to encourage the country’s banks to avoid coal and other environmentally harmful investments along the route”.
Thus, Xi’s announcement plays a crucial role in shaping how other governments and institutions transition away from the fossil fuels that drive climate change. That could place China in the lead on global climate politics, and reclaim a part of the US leadership, as negotiations for the COP26 event in Glasgow in 2021 gather momentum.
Joe Biden winning the US presidential election is the other significant development favouring climate action. Biden has identified climate change as the greatest challenge facing the US and the world. He has committed to ensure the US achieves a 100% clean energy economy and net-zero emissions no later than 2050. He intends to “go much further than recommitting the US to the Paris Agreement on climate change” – by leading an effort to get every major country to ramp up the ambition of their domestic climate targets, for which he has put John Kerry in charge as his climate envoy.
While domestic politics could affect Biden’s ambitions on climate action, Michael Bloomberg has offered a slew of measures that the administration can pursue that don’t hinge on the Senate’s and Congress’s leanings. These measures include working across the government to make defence facilities and public infrastructure climate resilient, include climate change considerations into public procurement, and work with the Securities and Exchange Commission to mandate climate-related financial disclosures.
Earlier, in November, the UK became the latest country and the first G20 country to mandate climate disclosures by large companies and financial institutions across its economy by 2025, exceeding recommendations of the Task-force on Climate-related Financial Disclosures (TCFD). Bringing financial institutions into the fold is important to further constrain the financial flows to carbon-spewing projects around the world. But disclosures can only achieve so much. Financial institutions should install and disclose plans to meet the Paris climate agreement. Countries should agree on common standards of measuring climate impact, without which disclosures wouldn’t tell a comparable story.
Japan and South Korea are the other major economies and emitters that recently pledged to achieve net zero emissions by 2050. Both countries plan to decarbonise mobility by mandatorily moving to electric and hydrogen fuels from 2030, and move cleaner manufacturing facilities back home. Over the past few weeks, KB Financial Group, Samsung C&T and Kepco have announced exits from thermal coal power projects following pressure from global investors to stop getting involved in such projects at home and abroad. Yet differences with the EU remain on measures to decarbonise the shipping industry.
Major emitters and economies including Australia, Brazil, Canada and India are yet to make any announcements. If the recently concluded Climate Ambition Summit, co-hosted by the UN, the UK and France, is any sign, heightened diplomatic efforts will consume most of 2021 before the COP26. Political leaders, diplomats and negotiators are likely to intensify climate diplomacy efforts after January 2021, with Biden announcing intentions to host a world climate summit.
Besides getting more countries to enhance their pledges, governments will need to agree on the many differences in implementing the Paris agreement. Some contentious areas include developed countries meeting their commitment to mobilise $100 billion a year by 2020 with both public and private investments, carbon pricing, mandatory adoption of the recommendations of the TCFD, and agree on a common understanding of green projects.
Achieving net zero targets requires collaboration between government, business, investors and research organisations. But a clear roadmap with policy certainty is necessary for the latter three to take risky projects and deploy resources. Certainty is a function of governments meeting their commitments. Their track record, globally, is rather patchy. For example, most G20 members are yet to eliminate inefficient fossil-fuel subsidies. The governments need to agree on border-adjustment taxes to prevent countries and firms from undercutting each other by not reflecting carbon costs in their pricing.
The extent of progress beyond a few more net-zero target announcements will unravel as 2021 unfolds. But we can be sure that China has upstaged the world and is now a formidable political, financial and technological power in climate politics. The climate for action might well be changing for good.
Sachin Joshi is an independent sustainability policy researcher and consultant. He was the Policy Director at B20 Saudi Arabia.