The Stage is Set for A Single Deal to Tackle Half of the World’s Emissions. Actors? (5)

By Mathew Carr

Jan. 29-31, 2021 –LONDON: OPINION — Call me an optimist (plenty have), but the diplomatic foxtrot taking place across the globe right now seems like some sort of delicate-aggressive climate-trade negotiation.

The U.S., China and the European Union know it’s time to cooperate aggressively on climate action and on the trade of goods.

Doing so would tackle half the world’s heat-trapping gas and give us all an outside chance of keeping temperatures from rising 1.5C.

As climate activist Greta Thunberg rightly keeps reminding us, it seems very unlikely. But take a ride in my green-hydrogen-fueled helicopter for a few minutes and fly as high as possible — and you might be able to glean some hope.

“What we are seeing is the beginnings of a very comprehensive approach by China where climate negotiations will be a very important instrument of its wider foreign, trade and economic policy engagement, especially in a post-Covid world,” said Ashutosh Shastri, founder, director of EnerStrat Consulting, an energy and climate markets advisor. “They don’t take any of these things lightly.”

Regent’s Canal, east London

The substantial barriers to a climate deal between the three include choosing which currency gets to become the base currency of any global carbon market, agreeing some rules of green finance to limit greenwashing and agreeing green WTO/Paris carbon trading rules.

So the Renminbi, Euro and U.S. dollar are firmly in the frame and each will be fighting for a global role in the climate shift.

The U.S. and Europe are also using climate policy to further economic interests and climate-justice goals. Importantly, China is seeing a plan by Europe to install a carbon tax at its border as “an incentive” to engage rather than as a threat, which has apparently been its stance until this month.

I’ve added emphasis to some of this below to highlight the key bits.

The U.S. dance

John Kerry, special climate envoy, USA, Jan. 27 press conference: “With respect to China, obviously we have serious differences with China on some very, very important issues.  And I am as mindful of that as anybody, having served as Secretary of State and in the Senate, the issues of theft of intellectual property and access to market, the South China Sea.  I mean, run the list; we all know them.  Those issues will never be traded for anything that has to do with climate.  That’s not going to happen.

But climate is a critical standalone issue that we have to deal on in the sense that China is 30 percent of the emissions of the world; we’re about 15 percent of the emissions of the world.  You add the EU to that, and you got three entities that are more than 55 percent or so.

So it’s urgent that we find a way to compartmentalize, to move forward.  And we’ll wait and see.

But President Biden is very, very clear about the need to address the other issues with China.  And I know some people have been concerned.  Nothing is going to be siphoned off into one area from another.

China playing “hard-to-get” in its response, one day later

Foreign Ministry Spokesperson Zhao Lijian: Climate change is a common challenge faced by humanity. As it concerns the future of all humankind, to tackle it requires global actions, global response and global cooperation instead of any solution by a single country. China and the United States share broad common interests and abundant room for cooperation. We had fruitful cooperation on addressing climate change, and played a constructive role on the conclusion, signing and entry into force of the Paris Agreement. China is ready to cooperate with the United States and the international community on climate change.

That said, I’d like to stress that China-U.S. cooperation in specific areas, unlike flowers that can bloom in a greenhouse despite winter chill, is closely linked with bilateral relations as a whole. China has emphasized time and again that no one should imagine they could ask China to understand and support them in bilateral and global affairs when they blatantly interfere in China’s domestic affairs and undermine China’s interests. We hope the United States can create favorable conditions for coordination and cooperation with China in major areas.

The long-distance-climate-dance between China and the U.S. has been underway ever since Biden got into office 11 days ago. It’s been fascinating to watch.

Kerry said Jan. 23 China’s net-zero plan for 2060 wasn’t soon enough and should not stand:

Jan. 27, Zhao Lijian responds: “First, China is the largest developing country in the world, but the target time China has set for itself to reach carbon neutrality is only 10 years behind that of major developed countries. Second, most developed countries have pledged to achieve carbon neutrality by 2050, which means it will take them 60 years to traverse the path from carbon peaking to neutrality. As China aims to peak carbon dioxide emissions before 2030 and strives to achieve carbon neutrality before 2060, it will only take China about 30 years.”

U.S. officials in the new administration promoted how the country’s states and cities had kept up the downward pressure on emissions.

China quickly retorted.

It said it continued to turn the screws on greenhouse gas, saying Shanghai is to peak its emissions before 2025, according to China Daily:

Ever-ready Europe

The EU-China relationship seems more assured. China’s following Germany’s solar rollout, for instance, while being keen to sell its inexpensive PV panels to Europe and the global south.

“We are complimentary. We can do a lot actually to make full use of each others’ advantages,” ambassador Fei Shengchao, minister councilor at China’s mission to the EU, said Jan. 28 at a Euractiv online conference.

At that event, EU climate negotiator Elina Bardram invited China to peak its emissions in 2025 instead of 2030, taking advantage of the opportunity to boost ambition provided by Joe Biden’s win in the U.S. election. China’s not budging, not immediately at least.

The most populous nation may be waiting for bigger incentives before joining forces with the other two. That could be related to trade (back off on Huawei, for instance) or on the terms of the climate deal itself…such as a looser 2030 emissions cap or more generous use of historic carbon credits.

Photo by Karolina Grabowska on

See this:

With the U.S. putting together its new Paris climate pledge within three months (and China also due to update its pledge), the timing of a potential deal is becoming sooner rather than later. China’s national carbon market officially starts tomorrow.

On top of that, China’s 14th five-year plan covering the 5 years starting 2021 may be set as early as March, 2021.

Even a small amount of progress would be a relief, because we are now in the fourth devastating decade of dragging our feet over the climate.

One of my readers says waiting for the deal is a little like Waiting for Godot, the famous existentialist novel, where Vladimir and Estragon engage in a variety of discussions and encounters while awaiting a third man (or woman?).

Except the enraging climate stalemate is probably the biggest ever existential threat.

It’s difficult to know if China or the U.S. is Godot … but Kerry’s language above seems to indicate he wants Estragon’s role (he doesn’t seem like a Vladimir, anyhow).

China, with less historical blame for the crisis despite its huge population, seems happy to keep the other two waiting. (No one ever said the Chinese can’t negotiate and the “best negotiator in the world” Donald Trump, didn’t get them over the line.)

The good news is if the three big celebrities of the climate crisis can get their stuff together during the next few months, the world is now in a much better place to hop on board aggressively and potentially influence their agreement before/during United Nations climate talks in November.

Should the three find a way to meet on carbon markets then there may not be a need for Europe to implement its disrupting and complicated carbon border adjustment mechanism, said Edmond Alphandery, former finance minister of France, at the event. Other nations from Brazil to India and Russia could then get on board, encouraging buying and selling of greener goods among global trade groups.

Adding to the momentum is digitization of trade via the World Trade Organization, which will make it easier to incorporate carbon prices, even if they are at different levels around the world, especially in the period through 2030.

Having no trade barriers related to climate “is the objective we should have in mind,” Alphandery said.

China, whose emissions are partly the result of making stuff for the U.S. and Europe, may be on board. I’ve not ever heard a Chinese official say anything like this, publicly keeping an open mind on a global carbon price (usually China insists on having a lower price, at least initially):

“I will not rule out any possibility in any particular regard,” Fei said.

So … there’s at least a chance of unprecedented global cooperation on climate, partly because big trade groups have formed around the globe, including in Africa, Asia, the Americas (and the EU is still largely intact).

“This is not America against Europe against China,” said Lidia Pereira,” a member of the European Parliament. “This is not an economic conflict or a conflict for the control of some parts of the globe. We can only win together, or we will lose together,” she told the Euractiv event.

Photo by Miguel u00c1. Padriu00f1u00e1n on

(Adds MEP in final paragraph, china ambassador, former French minister, EU climate negotiator, EnerStrat Saturday, extra U.S.-China dance moves Sunday; made Shastri‘s comment clearer after speaking with him again Sunday)