Strengthening Sino-European cooperation

A report by a UK think-tank says the world’s largest single market and the fastest growing economy can collaborate effectively on climate and energy security. Chinese economist Hu Angang responds.

Climate change is now a global issue and the Chinese government is already expending great efforts to tackle the problem. The government has gradually taken on the obligations commensurate with its status as a large, responsible nation. But China also has to ensure its energy and climate security; achieve good governance in energy and climate policy, and strengthen international cooperation. Sino-European cooperation is an important aspect of this, and needs to be explored intensively. Advancements can be made in the ways the two sides cooperate, and the sectors in which they work together. The extent to which China and Europe cooperate will be an important factor in determining the success or failure of global attempts to tackle climate change.

Government support

Global warming is now an urgent problem and it is imperative for us to act upon it. Climate change poses a threat to the economic development – and the survival – of the human race, and China is one of the countries that may suffer the most. Government determination to act is the most important factor in finding solutions. Carbon emissions will not fall by themselves. A low-carbon economy will not emerge of its own accord. If we want to achieve these goals and reduce our energy consumption, we need government action. Markets lose their power when faced with externalities, so changes in the system need to be made obligatory. To guarantee energy and climate security, China needs to make a huge transition: the shift from a high-carbon to a low-carbon economy. The highest energy-efficiency standards in the world should be imposed, first in big cities like Beijing and Shanghai, then in smaller cities – and then across the whole country. Among other measures, the government must increase guidance and management of carbon-intensive investments, and extend research in to low-carbon energy sources.

In fact, there is strong political will in China — from the party and government — to achieve scientific green development and establish a harmonious society. Tackling climate change and achieving energy and climate security are in themselves key aspects of China’s “scientific outlook on development”. As Changing Climates, a report from UK think-tank Chatham House, states: “China’s strategic aspiration towards an innovation-based economy with science-based development – as enunciated at the 17th Party Congress in October 2007 – is in line with the vision for a low-carbon transition. A focus on developing and deploying advanced climate technologies is also consistent with China’s aspiration to move up the global value chain.” (See the full report here [pdf]).

Decision-making in China since the beginning of the reform era shows that political will can be effective. As long as the party and government give their strong support and the policy is appropriate, a daunting challenge can become a catalyst for domestic reform and socio-economic transition. I am fully confident that in the process of guaranteeing its energy and climate security, China can make the change from a high to a low-carbon economy, and break the chains of carbon-intensive investment.

Combining responsibility with ability

China is a large country and is gradually taking on the responsibilities associated with this status. It is showing that it has both the ability to tackle climate change and the willingness to act.

China’s burden of responsibility stems from a number of factors. First, China is a permanent member of the UN Security Council, and as such is duty- bound to act on global challenges. In willingly taking on its responsibility to act on public affairs, China is active, not passive; the country is cooperative, not resistant. China should take advantage of its participation in international climate negotiations. Through its participation and willingness to follow regulations, China can alter its own model of development, reduce emissions and improve governance on energy conservation and emissions reductions.

The world is looking at China with great anticipation. As the Chatham House report says, “Choices made in China matter. China’s immediate decisions about its infrastructure needs and patterns of consumption will have a decisive impact on global efforts to stabilise greenhouse gas emissions, and the feasible rate of reduction to sustainable levels.” If China does not actively participate to reduce emissions, it will become a target of widespread criticism. China is more than capable of turning the challenge in to an opportunity. The country has the ability to create the world’s largest carbon exchange and green technology market. China could become the world’s largest low-carbon economy and the biggest exporter of low-carbon products.

China also has the capacity to invest in tackling climate change. A report from the IPCC states that if every country contributed just 0.12% of its GDP, we could arrest the trend of global warming from 2015 onwards. A UNDP report estimates that in order to stop carbon emissions reaching critical levels, 1.6% of global GDP would have to be contributed every year until 2030. Developed nations already have the funds to invest in emissions reduction technology, and should immediately reduce their emissions. Developing countries are as yet unable to take on this responsibility. According to China’s plan, the country’s energy consumption per unit of GDP will continue to fall after 2020, and emissions of the main pollutants will fall by 10% to 20%. From 2030, China’s total energy consumption may also begin to decline. Energy consumption per unit produced will be cut by half; national water consumption will remain constant; the proportion of total water consumption used for agriculture will fall; investment in environmental protection will go up from 1.3% of GDP to 2.5%; emissions of main pollutants will be reduced by at least one-third; and forest coverage will be increased by between 23% and 24%.

China has the ability to slow and to control climate change. The country can achieve the target of 20% emissions reductions by 2050, and exceed the target of 1.3% of GDP to be invested in tackling global warming. China can become a leader in promoting climate-change policies, and thereby help to build a harmonious world.

Cooperation on energy and climate security

Strengthening international cooperation on climate change and achieving good governance on energy and climate is an important strategy for China. In my “state of the nation” report from July 2007, entitled “How China Can Handle Global Warming”, I said: “In a globalised world, it is not enough for just one country to tackle global issues. We need international cooperation to solve these problems. This can take the form of political agreements, cooperation on scientific research, technology, markets and development of human resources. China is willing to – and already does – actively participate in global action on climate change.” Cooperation with the European Union (EU) is an important part. “China and the EU are economically entwined,” says the Chatham House report. “China is the EU’s largest trading partner. The EU is China’s second largest. The EU is also China’s largest supplier of technologies, foreign direct investment (FDI) and services.” Close economic integration has laid a solid foundation for Sino-European cooperation on energy and climate security.

There is a wide scope for such cooperation, specifically in the following areas:

• Strengthening cooperation and taking on a common responsibility for dealing with climate change. Communication can be improved in the Security Council and at international conferences. This will help us to understand each other’s positions and push for improvements in climate action and energy consumption structures.

• Strengthening agreements and setting international regulations on the environment and energy consumption. In the area of international trade, energy and climate security can be improved. The development of green industries can be promoted on both sides.

• Sharing environmental and energy conservation technologies and investing in key energy technologies. The EU ought to increase technology transfer to China and help to reduce its energy consumption and emissions.

• Establishing a Low Carbon Special Economic Zone in China. China is in the process of defining specialised functional zones in order to optimise production structures. I believe optimisation of energy consumption is the most crucial factor. The Low Carbon Special Economic Zone should not be limited to attracting investment on research and high-end production. It should also have an optimal energy consumption structure and conserve energy. The Low Carbon Special Economic Zone could be implemented in one of the current functional zones. It would be required to meet strict environmental standards. The zone could become a powerful model for the promotion of energy conservation and emissions reductions across China.

The critical state of energy and climate security poses a formidable challenge to both China and the EU. But at the same time, it provides an opportunity for cooperation. China can learn a lot from the EU in energy conservation, guaranteeing energy supplies, and climate security. But China is also a potential market. China has a strong political will and interest in the energy and climate fields, and there is broad scope for closer Sino-European cooperation. Traditional methods may no longer be effective. Political and business leaders from both sides need to be brave enough to take measures that will tether the horse before it bolts. Close cooperation will put both Europe and China at the forefront of the energy and climate challenges.


Hu Angang is professor of Public Policy & Management at Tsinghua University and director of the influential policy think tank, the Center for China Studies, Chinese Academy of Sciences/Tsinghua University. He did his post-doctoral research at Yale University and was a visiting professor at Harvard University and Keio University, Japan.

Homepage photo by Namtso via Flickr