China and the EU: together in the climate fight

Europe’s relationship with China is changing as trade increases and the politics of global warming continue to heat up. Wu Changhua sees challenges ahead.

Global warming is an environmental issue and a development topic. Since 2007 it has become one of the most talked-about topics in the world. That year the Intergovernmental Panel on Climate Change released its fourth assessment, and a series of political and economic meetings – including the G8 and World Economic Forum – explored the issue. Many countries also made progress in their domestic policies on energy and climate change. This created a good environment for international climate negotiations, and groups including the European Union and China have taken their own actions. The EU is a key promoter of climate action and international negotiations, and China – as the world’s largest developing country – has also played an important role in determining future responses to global warming. The interaction between the two is a major part of international efforts to reduce climate change. 

Europe has always taken the lead in international climate negotiations. Throughout the negotiations on the Kyoto Protocol, the EU promoted limits on greenhouse-gas emissions and actively took on emissions reduction obligations. The EU also pushed for participation from developed countries like the United States, as well as developing countries. This led to the Kyoto Protocol – the first binding agreement on specific emissions reductions – coming into effect. The EU is again at the forefront in negotiations for phase two of the Kyoto treaty, proposing emissions reduction targets and attempting to put them into practice in the domestic energy and economic strategies of its member states. The EU sets the agenda for efforts to tackle climate change. It uses its diplomatic capabilities to encourage action and bring other countries into the fold, in order that its ambitious climate strategies can be accepted by the international community and come to form an international environmental protection mechanism.

In fact, it was almost inevitable that the EU would adopt this attitude to climate change. The mature, industrialised economies of the EU are losing their competitive advantage and economic vitality in competition with developing countries. This trend has shaped the EU’s tendency towards “soft power” and diplomatic stances. Changes in the leadership of the major EU states – Germany, France and Britain – have also created an entirely new political environment. Germany’s Angela Merkel, France’s Nicolas Sarkozy and the UK’s Gordon Brown are all more pragmatic than their predecessors and have solid economic backgrounds. They have much in common when it comes to EU policy: they all support social and market reforms to stimulate economic vitality; they all take climate change and energy issues seriously; and they all value their relations with developing countries. This convergence will benefit the EU and help it form a clearer foreign policy.

For the EU, whose member states have long relied on external sources of energy, guaranteeing stable power supplies and increasing energy efficiency are particularly important. European countries are already suffering from the negative effects of climate change, and are uncertain of their competitiveness in the future global economy. For the EU, tackling climate change is a major priority. It helps not only to assuage rising public concern about global warming and energy security, but also adds momentum to European integration, increases the EU’s international diplomatic profile and may help arrest a slide in competitiveness.

Since China joined the World Trade Organisation (WTO) in 2001, the country’s international influence has increased rapidly. But the move brought both opportunities and challenges to relations between China and the EU. Trade between the two sides has increased, but the EU has been increasingly reluctant to view China as a developing country, or at least as a typical developing country. Europe tends to view China as an industrialised competitor on the ascendant, one that already constitutes a challenge to the EU. The EU’s first formal communication about China, 1995’s A Long-Term Policy for China-Europe Relations, put an emphasis on China’s economic miracle and its enormous potential as a market. Its sixth China communication, 2006’s EU-China: Closer partners, growing responsibilities, includes a section on trade and investment that says where economy and trade were previously foundations for a bilateral relationship, they now constitute the “greatest challenge” to EU-China relations. The EU accuses China of unfair competition in the fields of the environment, social security, currency valuation, natural resources, intellectual property rights and technology transfer. Europe has made strong demands for mutually beneficial, open and free trade between the two markets, emphasising that an increasingly powerful China should play a constructive, responsible role in the international economy. This means shouldering a greater responsibility than is required of developing countries under the framework of the WTO.

Negative perceptions of China’s politics and diplomacy are gaining currency within the EU. Europe ardently hopes that China will come into line with European values on freedom, democracy and the rule of law, and that China’s human rights situation will receive more attention. There is also increasing concern over China’s international aid policies. The EU accuses China of not establishing a reasonable and transparent set of aid criteria. It believes that China’s energy and resource-oriented foreign policy undermines the EU’s policies on “good governance” and is disadvantageous to the global spread of European values.

It is only natural, therefore, that climate change – a global environmental and development issue – has become a key aspect of EU-China relations. Faced with the increasingly urgent issues of energy security and climate change, the EU has responded in two ways. It has given the issues greater priority in its overall foreign policy, and it has worked hard to integrate policies on energy and climate change in member states. After the EU convinces the US to return to the UN fold on climate change, the EU will spare no effort in encouraging developing countries, such as China, to accept its standards on energy, the environment, trade and social issues.

So, where do EU-China relations go from here? Climate change is likely to play an increasingly prominent role in the domestic politics and foreign policies of both Europe and China. The EU’s more conservative, defensive and protectionist stance on trade and economy may come to affect negotiations between the two sides. The EU may ratchet up its criticism of China’s “environmental dumping”, or “climate dumping”. Resulting disputes on issues like energy standards will become a new focus for trade talks between China and the EU. Europe could respond by setting up trade barriers, making increased use of anti-dumping measures and WTO conflict-resolution mechanisms, and adopting a more conservative attitude to technology transfer.

The EU will gradually strengthen its idea that China should bear greater responsibility with regard to energy security, climate change and sustainable development. China and other developing countries will be faced with enormous challenges as the EU presses for larger emissions reductions, a two degrees Centigrade limit on global warming and its aim to reduce global greenhouse-gas emissions by 50% on 1990 levels by 2050.

Europe is at the forefront of developing and implementing many renewable energy sources and it claims ownership of much of the relevant technology. The EU promotes global targets and action, and it has sketched a blueprint for the future global economy, technology and society. It will be at the forefront of a new, low-carbon industrial revolution, and will have a technological advantage over China and other emerging economies. Europe, therefore, has an enormous opportunity to profit from the transfer of new products and technology, and the EU will urge China not to prioritise economic growth ahead of environmental protection. While the EU will see its values spread across the world, its environmental standards and obligations will increase the cost of development for China and other emerging economies, hindering these countries’ economic growth and progress in domestic politics and foreign policy.

Wu Changhua is director for Greater China, the Climate Group.

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