The US, China and the climate test

John Kampfner

Good afternoon, everybody, good morning, if that’s where you are, or good evening. My name is John Kampfner, a Consulting Fellow at Chatham House, Author, Broadcaster, and the person behind the report that – around which this event is based. This is the second in a series for Chatham House looking at the effects of big power systemic rivalry, namely between the United States and China, on the ability of the world to solve our most acute problems. The first report that was published at the end of June looked at coronavirus and specifically the vaccine rollout internationally. This one is looking ahead to COP26, but more broadly, it’s looking at broader environmental questions, the whole question of how we are going to get to net zero, when and how. So it is about COP26, but it seeking to look much further beyond than that.

Just before I introduce the panel, a few quick housekeeping notes for you to pay attention to. This is on the record, and please do, if you’re tweeting or using any other of the social media, please do so. The hashtag for this is #CHEvents. After about half an hour, we will turn to questions. I’ll give you a bit of a heads up before that, so that you can prepare your questions. You can do that in the Q&A function of this Zoom webinar. Please, when you do that, we’re going to assume that you’ll want to present your questions yourself by audio, if however, you would rather not do that and have me just ask your question on your behalf, then I’ll do that, or in some cases, if two questions very much align or duplicate, I might just read them anyway to get us to a very, sort of, speedy set of – and hopefully exciting set of Q&A. Just to mention that one of our three participants, Isabel Hilton, will have to disappear at about 25 past the hour for about ten minutes, but don’t worry, she’ll be back, and she’ll be back to answer your questions.

So, our three panellists today, and we’re delighted that in this crazy time ahead of COP, that these experts have all been able to spare the time. Our first participant is Li Shuo, Senior Global Policy Advisor at Greenpeace in China. He directs the organisation’s campaigning on a wide range of issues, including air pollution, water renewables and fisheries, and much more, and it’s – and Shuo, thank you so much for joining us, it’s great to have you with us. Alongside, but in a completely different time zone, is Pete Ogden, Vice President for Energy, Climate and the Environment at the United Nations Foundation. He served during the Obama White House as Senior Director for Energy and Climate Change, on the Domestic Policy Council and was Director for International Climate Change and Environmental Policy on the National Security Council. So Pete, thank you very much for starting your day with us at Chatham House. Isabel Hilton, who I have known for many years, is one of the doyennes of China and environmental policy, based in London, Author, Broadcaster, Founder of China Dialogue and now its Senior Advisor. So, thank you, you three, very much for joining us.

And I really just want briefly to present the key question that I pose or the argument that I pose in my paper. And I contend as follows, and if you haven’t had a chance to read it, those in the audience, or to direct it to others, please do, it’s on the homepage of the Chatham House website. It’s arguing this, that if you look at, notwithstanding John Kerry’s extraordinarily enthusiastic and assiduous diplomacy, that conventional diplomacy between the United States and China is in a great sense – a great state of disrepair. Exhortations, carrots, sticks, emollience or toughness, are pretty much getting nowhere. In some ways, it’s a dialogue of the deaf, and John Kerry’s attempts to separate out climate from all the other areas of contention are proving incredibly sticky. So, if you work from the assumption that conventional diplomacy, the politics and diplomacy of exhortation, are not working, then what are you left with? And I argue, actually, there are three strands that could compel both of the two big powers and their allies and non-aligned states to greater action on COP, and we’ll obviously see in the next few days in the lead up to it and the start of it some announcements for sure.

But the three possible avenues are this. The first one is good old fashioned rivalry, soft power rivalry, which country, which system will prove to be the green beacon, the one that others seek to emulate and to praise, leaving aside, not acting on behalf of blandishments or criticisms from the other, but just simply leading from the front.

The second one is economic competition, huge amounts of money to be made from a next generation of renewable energy and other technologies and infrastructure surrounding that. So who is going to benefit economically from that? So those two are very much based in harnessing rivalry, don’t even deny rivalry, go with it, but you could actually end up in a good place as a result of it.

The third one is more defensive. It is looking over your shoulder at domestic public opinion, and we’re seeing in the United States and in China, played out partly through the so-called culture wars, partly not, very much two strands of public opinion. The part that represents old industrialisation, fossil fuels, coal, traditional jobs, seeing self-worth and community worth, and national self-pride through old industries, and who regard the green movement as, in some ways a, sort of, middleclass, entitled holdout and to be resisted. Set against that, and increasingly, through extreme weather events, we have a populace that is demanding ever more action at regional level and at national level, because, to coin a phrase, the chickens are coming home to roost. People are beginning to see, right in front of their windows, the effects of a failure to curb emissions, and so therefore, the third one is not based on rivalry, it’s based on another traditional instinct, the survival instinct of the Politician.

So that’s my contention, and I’ll throw it open, a bit like a student to the student’s Professors. I will throw it open to the experts to comment on that and to take it further, and Pete, maybe I’ll start with you.

Pete Ogden

Thanks very much. Great to be here, and I really appreciate the opportunity to have this discussion with such distinguished China experts. I guess I will provide maybe an initial thought, which is that if you – I think you’re, you know, you make very astute observations about the state of US-China co-operation as it were right now. I think if you look back to what perhaps we would all agree, I’d be interested in what Li Shuo and Isabel believe the case to be, but perhaps the golden age of US-China climate co-operation was, I would say, was 2013 to through the Paris Agreement, and that was an interesting political moment. That was when, I’d say it began when President Xi came to power, went to Sunnylands, had his first meeting, Head of State meeting with President Obama.

President Obama had just been re-elected himself and had a determination to execute a domestic climate strategy, and both countries wanted something, and actually needed the other one to accomplish that. The – and that was in the context of the Paris Agreement negotiations. The US needed an agreement in which China participated in a meaningful way that satisfied its own, you know, both political and environmental objectives for the Agreement, in the United States’ view, and China needed to also have an agreement that included the US, but also, one in which they felt that they could – their participation and their contributions would be welcomed by the US, and I think you saw that really on display when the US and China came together at the apex of that moment together to announce their NDCs. No blame, no criticism on either side of what the other was putting forward, and that, I think, was the high watermark.

I think the question now, and this – I’d love to hear what, again, what everyone else thinks, is do – what do they have – what do they really want of each other here anymore? We’re now in a post-negotiation framework. So much of what you hear the US asking of China are things that China itself needs to do, and so much of what you hear, at least in the public discourse, coming back from China, is about things outside of the climate space and arena that it wants of the US. So, finding where that – where those – where that intersection of reciprocal needs might unlock some opportunity diplomatically.

John Kampfner

Thank you for those opening remarks. Isabel, I’ll turn to you next. So, if Peter’s right, and I also argue that 2014 and Paris was maybe the high watermark, what happened?

Isabel Hilton OBE

What happened was that they agreed that – Xi Jinping and Obama agreed to work together to reach a deal in Paris, and that in marked contrast to Copenhagen, and to anyone who was in Copenhagen, the scars are still painful, it meant that they were working in concert and the US was applying its considerable power of mobilisation and China was aligned and not causing difficulties, except there was a bit of a wobble around 1.5, which they still regarded as a bit of an American manoeuvre, I think. Anyway, we got over that, and we had a deal. And so, you know, that’s critical, we have the deal, so we’re not negotiating a deal in Glasgow, we’re trying to make the deal work. And that’s a critical difference, I think, for the purposes of this conversation.

To your question about, you know, the geostrategic impacts on climate co-operation, I think it’s helpful to try to understand better what has driven China’s climate action so far. And I would definitely argue that it is not particularly a response to external pressure. You know, if you think back to 2005, when China became the world’s biggest emitter, or was revealed as the world’s biggest emitter, that moment coincided with many other things, including a severe environmental crisis, the exhaustion of the original industrial model, which is a high emitting, you know, rapid catch-up model, and the need to upgrade the economy, growing discontent with air pollution, and just, you know, a whole – and the understanding that as one climate advisor put it, the tall poppy catches the wind. So becoming the world’s biggest emitter was going to do China no good, in the eyes of its traditional diplomatic constituency, which is G77.

So – and that, in fact, we had that moment in Copenhagen, when the Marshall Islands turn to China and say, “You’re drowning us.” You know, and that is a moment when China’s unquestioned leadership of the developing world as, you know, the climate victims, as opposed to the climate perpetrators, that moment, you know, it was over then. And so China had to find a new diplomatic position, a new industrial strategy, and a new way of managing domestic expectations, and they did all of that in the next decade. So from the 11th and 12th Five Year Plan, you see investment moving into low carbon technologies because they are the technologies of the future, and China wanted it – to base its industrial strategy on the future. And so it invested heavily, we all know what that did to renewables prices and so on.

But at that point, the key thing to understand is that once you’ve based your industrial strategy on low carbon technologies and being the principal producer and supplier of those, you have a direct interest in a carbon constrained world. Now, that’s not the same as, is China moving fast enough in its domestic mitigation? That’s, if you like, a separate question. But if you’re looking for the drivers of China’s climate commitment and why, you know, I don’t have particular worries that we will, you know, have a situation as we did in the United States when Trump got elected, when, you know, it’s all change and we all slide down the great climate snake again. China’s not going to do that, because it is an embedded – it’s an embedded proposition at this point. So even if you had a change in leadership in China, which is, at the moment, not on the cards, you still have an industrial strategy and a coherence to policy that, I think, will persist.

So, to that extent, geostrategic competition, you know, isn’t the driver. Now, does geostrategic competition affect what happens? Yes, it does. But again, I would look at both sides, and for me, the concern is in populist nationalism, and we all know about US populist nationalism, we’ve had a, you know, a fairly clear view of that. Chinese populist nationalism may be less evident to people, but it is very much there, and it is the posture of this government, which is trying to, at this particular moment in China, is trying to find a narrative, which will satisfy popular expectations to justify its hold on power, and that is a nationalist narrative. And that means that China doesn’t want to be seen to do what the United States wants, or indeed what the international community wants. That for China’s story to be consistent, China has to present its actions as, you know, the result of wise Chinese policy, the result of China being a responsible player, the result of China’s continuing concern for the poor as opposed to the rich, all of those things. But not because Washington wants us to do it, that is just not going to work.

John Kampfner

So I want to stick with you, Isabel, just for one second, simply because I’m looking at the clock, and that you’re going to disappear in a few minutes, and then I’ll go to Li Shuo about this. Let’s just stay – I want to stay with both of you at the moment, on the question of diplomacy, before we get to the question of the two countries’ climate strategy. So, you – explain to me, Isabel, what in your view is the – if China is acting entirely of its own volition, through its own industrial strategy, its own forward facing diplomatic exigencies, then how do international institutions, how does COP, not even to mention, you know, how does the G20, how does the United States work with China, with regards specifically to climate, and this whole question of separating out climate from everything else that’s going on, with the Uyghurs, with Hong Kong, with the South China Sea, etc? Just how naïve is that?

Isabel Hilton OBE

I think having said that the drivers of China’s policy are domestic, and I think that remains substantially true, that doesn’t mean that international posture and international – and the wider diplomatic picture are irrelevant. I think the effort on behalf of Xie Zhenhua and John Kerry to keep climate separate from the other tensions is wise. I can see absolutely no benefit in trying to instrumentalise climate as an element in a wider diplomatic conversation. I really don’t think it’s going to improve the lot of the Uyghurs of Xinjiang or indeed the people of Hong Kong if we say, “We won’t co-operate on climate until dot, dot, dot.” Those are demands, which are not going to be met, and all you’re going to do is to damage the climate conversation, and I think that there are pressures in China to blur the distinction between the climate conversation and the wider diplomatic effort. But so far, I think that Kerry and Xie Zhenhua at least have managed to have many, many discussions amongst themselves which have not been particularly contaminated.

Obviously it limits the scope that they have on which to co-operate, but at least you’re not getting climate held hostage for other issues, and I think that would be utterly counterproductive. I don’t think it’s naïve, I think that, you know, China is highly vulnerable to climate change and it knows it, so there isn’t a particular advantage that China can see in being seen to slow down climate action for what? For – in order to gain, you know, acknowledgement of its story in Xinjiang, it won’t happen. The – you have to recognise that some things are possible in international diplomacy and some things are not, and a reconciliation of China’s position on Xinjiang with the United States is just not – it’s not going to happen. Or indeed with the European Union. So let us not allow that to inhibit what can happen, or to damage what can happen. We have to keep it separate.

John Kampfner

Okay, and, that was very clear. Li Shuo, let me first of all, invite you, if you could, to set out the reception that United States exhortations received in China. So when John Kerry, whether he’s speaking in London at Chatham House or whether he is in China or wherever he is, either talking about China or talking to or with China, how much is it reported? How is it reported? And just to what degree, as Isabel mentioned, the, sort of, populist nationalism, the, sort of, “Get your tanks off our lawn, just don’t tell us what to do,” to what degree does that permeate the way American diplomacy is currently portrayed?

Li Shuo

Yeah, well, John, first of all, thanks very much for having me. I can tell you the moves made by the Secretary John Kerry are being closely watched and tracked here in China. I think we need to remind ourselves one simple fact. There are only two senior US officials who have ever visited China since the Biden administration. Kerry is one of them, and he has been here twice. One, early in the spring, the other time just last month. So, I think from there, I agree with a lot that has already been said by Isabel and Pete, and maybe just a way of challenging ourselves. I am not entirely sure that we can say, for example, that the US and China have exhausted the possibility of climate diplomacy. I do agree, and I very much recognise what Pete said. I mean, we’re not in a climate honeymoon anymore, right? And we will now be back to the 2013 to 2015 time period, because of the systematic problems in the bilateral relationship.

But on the – you know, on the other hand, I would argue, you know, climate is actually a very different issue compared to, really, most of the other bilateral agenda. You can still possibly decouple on trade, right? You can manage to produce certain things just in your own country, so you are not exposed to trade. You can still do it, but, you know, there is very high cost, probably, entailed. But climate change, can we actually decouple? Right, can we solve? Can the, you know, can the US be immune from climate impacts if China is not moving toward the same direction or vice versa. I have the argument we can’t decouple, that’s the first thing.

I think the second thing is, if I look at what has happened over the last ten months or so, there are a few evidence that suggest to me that is still a little bit potential for diplomacy. In April, for example, at the Biden organised, you know, Earth Day Summit, the Chinese President basically said, “We’re going to keep our coal – our coal consumption, by 2025.” That is not a new announcement. That’s already embedded in our current Peking announcement. But why did he single out coal? I don’t – I haven’t heard, you know, any previous time that the President singled out coal, any domestic, you know, context. See, he is singling out coal because he heard the international expectation and he’s trying to respond to international expectation. That’s just a very, you know, strong evidence, right, to suggest diplomacy still works. Why did China, in September this year, announce to ban overseas coal project? That is clearly a major international demand and I think the Chinese side is responding to that. So, all of those suggest to me that diplomacy still works.

I think I would also, you know, here try to pushback one commonality that we keep on hearing, which is on either the Chinese, kind of, tracking the US or the West in general to talk about climate change, right, to extract concessions from elsewhere, Hong Kong and other issues. And I think people who are advocating for this narrative are obliged to answer what exactly did Beijing get from Washington by announcing the overseas coal moratorium. So, again, I can still see some potentials for the two sides to keep on exchanging, you know, not only because we don’t have an alternative, if we want to, you know, work through to, kind of, solving our – solving the climate problem.

John Kampfner

Thank you, and I’ve just got to come back to you with a question, but happily for Chatham House audience and unhappily for BBC audiences, Isabel’s interview has been postponed, so she will not be leaving us for ten minutes. So, that’s good for us. But let me come back to you, Li Shuo, on the question of the third pillar of my contention, which is domestic pressures. Could you just outline, you know, we have the coal lobby, predominantly but not exclusively in the North-East of China, and we have those particularly in coastal regions who have been most affected by extreme weather. Now, given the very specific way that politics is played out in China, could you just outline for our audience how climate is being played out? Is it the one area in media, in social media, which is pretty much, people are given free rein? Or to what degree is discussion of climate restricted and how is it playing out? How is Xi Jinping and how are the big forces in the Communist Party and in government dealing with these two competing forces?

Li Shuo

Yeah, no, I think one way to answer your question, John, is, I mean, in my mind, there are three major drivers for climate change in China. The first thing is economics, right? The narrative that embracing climate action is good for our economy, and it has proven to be the case, at least partly. Right, if you look at how rapidly the country managed to develop a very sizable renewable energy industry. And then the second driver is just environmental issues. Right, it used to be air pollution and very significantly in the early 20s. I think here, one thing that we all need to pay attention going forward is how will climate impact be considered very seriously by the Chinese leadership? You know, because like it or not, we will be suffering from climate impacts. We’ve just experienced a lot of severe weather events over the summer. So I see climate impact, the consideration of climate risks, becoming, kind of, a new driver in the, kind of, the inner climate period. And then the third driver is, you know, political or diplomatic. Right, doing climate change is good for Chinese international image, but back to, you know, back in the Obama, you see how imperial, you know, also how that stabilises a major bilateral relationship.

So, I think, again, I think the environmental considerations will actually need to be more important, right? Because if you look at the, you know, the geopolitical and the diplomatic considerations, they will be very much constrained, as Peter has already mentioned, you know, at the very beginning. If you look at the, you know, the economic driver, right? There you will see a pretty complicated and a mixed picture. We have the renewable energy, but you know, at the same time, a lot of pushback from heavy industry is going to cause constraint. So you will see a mixed, you know, a mixed picture. So if I want to, kind of, identify any emerging factor that could potentially counterbalance the diminishing impact, you know, of the diplomatic driver, the economic driver, then it actually should be environment, particularly the long-term impact of climate and severe weather events.

John Kampfner

Thank you, and I’m going to invite the audience members – we’re at halfway through the hour. We’ll come to questions in about ten minutes, so please do use the first of these ten minutes to submit your questions on the Q&A button, and as I say, please say whether you want me to read them out or whether you would like to speak them on this webinar.

I want to come to some specifics and some predictions and closer analysis of COP26 in a second. But Pete, I want to come to you next about the domestic pressures in the United States. It seems self-evident that there are – what of the many pressures facing Biden, these are some. One, that the international community assumes that Trump or some of Trump, whether real or metaphorical, will come back in 2024. So, in other words, just how durable, and that so – and that executive orders can be undone very quickly. So just how durable are any proposals or strategies coming out of the Biden administration? Secondly, to what degree is the tough line on China, which very much was synonymised by Trump and is continued by Biden, albeit with more diplomatic graces and more traditional diplomacy, to what degree is that seriously constraining Kerry? Let’s just start on those and how on earth Biden is going to get through, whether it’s on financing the 100 billion or whatever. How much is he operating on climate with one hand tied behind his back?

Peter Ogden

Well, I mean, certainly, and we hear this all the time, you know, there’s a lot of this question of the US’s ability to be, you know, to sustain long-term commitment on climate action is a big challenge. I thought it was very interesting, both what Isabel and Li Shuo pointed out, raised a question of how much China actually – that how important that is actually to China, you know, or – and as much as a material matter or how much of their actions are, sort of, independent, frankly, of what the US, the kind of, internal dynamics are, and what the nature and relative robustness of US climate policy. So I’d be interested to hear their thoughts on that.

The – I think that clearly you have in President Biden, you know, a President who has politically staked a lot on climate action. We’ve never had anybody in the US run and get elected on a platform that is nearly – and you know, that was as ambitious on climate as his, and it’s reflected in the huge budget package that he’s trying to get passed through, which would, you know, in some form, the kinds of investments he’s talking about are ones that would be durable. I mean, these are, you know, even during the Trump administration years, people weren’t ripping charging stations out, they weren’t taking down, you know, solar panels. I mean, he’s talking about investing in building the infrastructure for a, you know, a significant decarbonisation of the US economy and so I think that the – I, you know, I only wish it could get passed, in some robust form before the COP, to help to boost those, that prospect of getting us to a strong outcome.

I also think that – and again, I’d be very interested in something Li Shuo pointed out at the end, which was that the – so much of what had motivated China to pursue a lot of its clean energy policies was other associated, sort of, environment issues, particularly around air quality. And in a Venn diagram of action, they, sort of, operated in that space where air quality improvement and climate actions overlapped and now I’m interested in what he was saying about whether there is sufficient – if you, sort of, exhausted that piece of action, is there enough – what are the other environmental drivers? Or will climate itself become enough of an incentive? And I would say in the US, awareness of the costs of climate change is growing. I mean, I think that the wildfires, the way that we experienced hurricanes, the public perception of connecting these events with an understanding that they’re climate fuelled, is growing in the US, and so – and I think that’s hugely important.

I’d say the last point, to an issue you had raised earlier, John, about on the diplomatic front, I do think that the, you know, the US, since we’re not in a – you know, these are not, and as Isabel referenced before, this is not – US-China diplomacy is not about esoteric negotiations and anything happening in the back. I think the power of the US’s posture now is that it is not coming to the – to China with demands that are unique to the US, right? I mean, the EU probably could have lived with lots of different versions of the Paris Agreement. The US and China needed to have had very specific needs of each other to get to that diplomatic breakthrough. I think the power from now for the US is when it comes to China with the demands and the urgency that the world shares, and I think you see this in the things that Secretary Kerry are – I guess, Special Envoy Kerry now, is pressing for. He is pushing for China to align itself with 1.5o emissions trajectory. That is not for the sake, you know, a narrow interest in the United States. That comes because that’s aligned with what the rest of the G77, the rest of the world, people who really need to see climate change solved, need of China and the US.

John Kampfner

Okay, so let me put it back to you. If it is so self-evident and if it is so outside of US national interest, why did the Americans even need to say it at all? Why not just let China and the rest of the world make – come up – you know, if getting to not even 1.5, even getting to 2 is so self-evident, the Americans don’t even need to say it. They can just leave other countries to draw the same conclusions. Is there not still that sense of America needing to exhort the world to act as America does or wants others to do? And if I can throw in a further point, is quite specifically, to what degree do you think Afghanistan and the scenes in Kabul in August have diminished America’s pulling power and specifically, is there any read across between that and its pulling power on climate?

Peter Ogden

Well, on the first point, I mean, others are saying, right, I mean I don’t – you know, it’s not as if the, you know, the United States is alone in exhorting China and the US as well to take more action. I mean, you know, we are the two world’s largest emitters, right? I mean, that’s the fact. The world does not – can’t get onto a sustainable trajectory without enhanced action. So, you know, it’s – we have a unique role in this together to solve the problem. So, while it’s important, and I think it, you know, that other countries are exhorting us as well, the United States as well as China, we clearly have a joint responsibility here if we’re going to try to, you know, to try to fulfil the goals of the Paris Agreement. So, I think that would – that – and as long as that’s the case, the US and China are going to have a unique relationship.

John Kampfner

And on Afghanistan?

Peter Ogden

Well, I wasn’t quite following you. I mean, maybe the question is what, has the US’s ability to exert leverage to…?

John Kampfner

Yeah, I mean, US…

Peter Ogden

Well, again, I think for the rest of the world’s concern, people are really concerned about climate change. They need that problem solved just as much as before. I mean, I don’t see why – I don’t think, you know, the people who live in, you know, in vulnerable communities around the world think that the problem is any less – or less severe than it was a few months ago. But I’m, again, curious to hear what other…

John Kampfner

Sure, I’m going to come to the specifics of COP. Just to remind the audience, we’ve got a couple of questions in already. Thank you very much, we’ll come to them shortly, but do keep presenting your questions through the Q&A button. Let me just come to the three of you and whoever wants to start can just start. What are we going to expect now in the days running up to COP in Glasgow? How big are the promises going to be? How sustainable are those promises going to be? Is Xi Jinping going to come to Glasgow? It doesn’t look as if he is. What are the consequences of that? What are your – who wants to start on how disappointed or surprised, in a pleasing way, will we be at the end of COP?

Isabel Hilton OBE

I can start if you like. I mean, apart – some of that is about expectation management. At the moment we have promises, we don’t have delivery. And I think that working out the nuts and bolts of how any of these long-term promises are going to be delivered is going to be important and for that, you have to set some rules. We’re still negotiating, essentially, the rulebook, including what role carbon trading can be allowed to play in national ambitions. Someone said in an event I was in this morning, that you – it was a German, John, you’d be interested to know, watching German energy policy over the years. He said, “You know, you get missed targets, and what you get is more ambitious targets instead of better mechanisms.” And I think that it’s not headline-grabbing, but Glasgow has to give a sense at least of better mechanisms, and there are other things like finance, which are going to be equally important. Xi Jinping is not coming, I don’t think that’s particular to Glasgow. I did note, with some interest, that Xi Jinping did not turn up even in Kunming at the official opening of the conference on biodiversity, the conference of the parties which China is hosting, which is a big deal for China. If he didn’t show up in Kunming, it seemed extraordinarily unlikely that he was going to show up either for G20 or for Glasgow. He hasn’t left China for a very long time now, more than 600 days. So, you know, he’s not travelling.

Li Shuo

Well…

Isabel Hilton OBE

Sorry.

John Kampfner

Yeah, Li Shuo, let me ask you to follow-up on that. Why not? Is it just a pandemic-related reluctance to travel? Why wasn’t he in Kunming? How do you read the runes? How do you analyse?

Li Shuo

Well, I mean, I think, you know, him not travelling abroad, that’s really not news for anyone here in China. But I think the point that I would make here is the fact that he’s not travelling to – you know, in-person to G20 and the COP doesn’t necessarily rule out his participation, right, and his political engagement. He can still do it virtually, you know, presenting at the COP for example. And also, let’s remind ourselves that the two countries, the US and China, have just decided two weeks ago that the first Presidential level meeting will happen, you know, before the end of this year. Of course, that will be a virtual meeting. So, will that meeting happen in the run-up to G20 and COP26? Will it actually happen in conjunction with these two meetings or after? I would argue if it is in the run-up to or in conjunction, then the round of possibilities, political possibilities, will be – could be broadened significantly for the climate agenda. So, let’s do – you know, keep a very close watch on that.

And then just on why he was not showing up in Kunming, and the reason of that is quite simple. The CBD hub, you know, this first part in October, I think for a layperson to think about that as a – as the Tokyo Olympics. There’s only the opening ceremony, no athletes and no games. Right, so in other words, if he travels all the way to Kunming he is seeing the same people he can anyway see here in Beijing. He’s not seeing anyone else that he can’t see here in Beijing.

So – but going back to your original question, John, there are still a lot of things, at least on the Chinese side, that will happen, just in the very short period of the next two weeks before the COP. China will still need to submit its Nationally Determined Contribution, the 2030 Climate Targets. It hasn’t done so, but it has already said it will do it before Glasgow. You know, it will also submit its long-term strategy under the Paris Agreement, as well as a set of domestic policies to try to, kind of, ground the high-level carbon neutrality, carbon Peking vision to, you know, kind of, really policy level, you know, implementation. So these things will all happen, but they will happen in a very delicate domestic context, which is the power crisis that many of the audience are asking in the chat bar. I think, you know, the power crisis will make decision-making on those key items quite complicated, but on the other hand, I think it is an overinterpretation to see that the current power crisis is in any way significantly downgrading China’s medium to long-term climate ambition. I don’t think we can reach that conclusion yet.

Again, just to recall the reason of our power crisis is very simple. We faced a shortage of coal supply. So, in a country where more than 50% of your energy comes from coal, the only short-term solution is to dig, you know, dig out more coal, like it or not. But we should now just simply interpret that digging out more coal as China, sort of, changing its medium to long-term climate strategy or direction.

John Kampfner

Well, that exactly – thank you, that comes – that’s a question from Neil Brown, and we’ll come – we’ll start questions now. How does the – and which you’ve answered from your perspective. “How does the current energy crisis impact US and Chinese options for fossil fuel reduction and how can it be delivered?” Pete or Isabel, do you want to add anything, with regard to the current energy crisis?

Isabel Hilton OBE

Well, I was just looking at a question, which asserts that this was a reversal of the 2030 commitment. It absolutely is not. Li Shuo has explained very clearly. You know, you can’t have North China going into the winter without power. You know, people would freeze, and there is a big – there is a whole set of factors, which have contributed to this crisis, not least the rise in global prices as opposed to the, you know, fixed prices in China, which mean that people who – the companies that generate electricity are losing, so they restrict their output, etc., etc. And you’ve seen a whole series of measures to deal with that in the short-term, but there is absolutely no reversal on the Peking commitment by 2030, and I would – I mean, I still think that they will bring that forward or make an announcement at some point about bringing that forward, but it certainly won’t go beyond 2030. So it’s not a reversal, it’s a short-term crisis.

John Kampfner

I want to ask Nina Jeffs to ask a question, and for Pete to answer it, and Pete, you can wrap the answer to the question maybe in with your predictions for COP, because this is about climate finance. Nina?

Nina Jeffs

Hi there, and thanks for a great panel discussion so far. I’m Nina Jeffs from Chatham House. My question is, in the context of China’s moratorium on overseas coal replacements and, you know, the US, sort of, setting the scene, in terms of the Build Back Better World initiative, how does the panel see the prospects for US-China co-operation on climate finance for developing in climate vulnerable countries? Thank you.

Peter Ogden

That’s a great question. I do think that there’s – I think climate finance is, sort of a – has, sort of, a couple of different meanings. There’s, sort of, climate finance in the, kind of, the four corners of the Paris Agreement and international negotiations, which is a developed country commitment to mobilise $100 billion annually of climate finance during the window from 2020 to 2025, that China wants no part of and is not in any way being, sort of, was not part of that initial commitment, and that is a huge political issue, because the developed countries have not met that threshold. I think that’s going to be one of the critical challenges for this COP, to link this to an earlier question John asked, I think getting that – getting – developed countries can’t be held to answer that, provide a credible pathway for themselves to achieving that goal, and whether the rest of the world is, you know, persuaded, and I think would be critical.

I think that – but you point to another bigger, kind of, question, outside of that – of that particular terminology. The question about whether or not, now that China’s committed not to be funding any new coal through overseas – US – you know, basically, that’s – no other country now – I mean, maybe there’s one country, but the – it’s really not – that’s not part of anyone’s overseas development plans. Is what, you know, what could that look like? And China, interestingly, in that announcement, when President Xi said he would be ending the practice of subsidising overseas coal, he also said in the same breath that he would be working to help countries with their – to enhance their clean energy transitions, increase their green energy. And that, I think, is ideally where we would be able to get, that we not only, sort of, stop digging ourselves a bigger hole, but that we can get on front, ideally, a race to the – a race between the US and China to help to try to be the provider of those – of that – of the new clean energy technologies for the rest of the world, would be something that I think we would all benefit from. But I think you’ve seen – you, sort of, saw the, you know, the opening of that possibility, but I think that there’s still a lot to be seen about what that would really look like in practice.

John Kampfner

Thank you. I’m just going to read out one question, ‘cause it helps us to broaden the discussion. It’s from Marta Edabol in Lagos and Marta’s asked me to read the question, ‘cause she has a heavy flu, so I hope you get better soon. You say the following, “To visualise and decentralise the conversation a bit. For China and the United States to try to build a new pattern of climate geopolitics between major powers, how inclusive could this new pattern look like? Is it realistic to imagine a South-South partnership and China’s close ties with non-Western partners, e.g. the African Continent, to have any realistic impact on US-Chinese alignments?” I think it’s useful to spread it out and look at the role of the developing world, and we talked earlier about vulnerable countries. And do you – what, sort of, both to answer Marta’s question, but also, the visibility of the non-big powers at Glasgow. How do you see that panning out? Maybe Li Shuo would you like to start on that?

Li Shuo

Yeah, sure. I think just, you know, in my ten years’ experience of international, kind of, politics, I do feel like the political and diplomatic attention from the European Union and the United States vis-à-vis China is overwhelmingly bigger than any other countries, particularly the ones in the developing world. So, I think the point here is, many developing countries still need to realise that this is an existential threat to them and they need to prioritise climate diplomacy in their engagement with China included. I just, you know, genuinely don’t feel that they are prioritising this issue in their bilateral relationship with Beijing. So I think there is a gap to be filled there. That said, I think it is – if I look, kind of, into this decade, further into this decade, I think the growing pillar, when it comes to the international, kind of, politics, is indeed the engagement amongst the developing countries themselves, right? The South-South climate co-operation as one of the examples. So I do think, you know, we need to pay attention to that, and although as well, when, for example, some of the key big power relationship is not where they should be and will intend the case for the foreseeable future.

John Kampfner

Let me throw in a couple of other countries that probably don’t get the attention they deserve when we’re talking almost exclusively or predominantly about the United States and China. I’m thinking of Australia and India, and one could name others as well. How do the United States and China, either working jointly or more likely separately, push laggard countries to do far more? Isabel?

Li Shuo

Well, I mean, I think – I mean…

John Kampfner

Or Li Shuo?

Li Shuo

Yeah, I mean, maybe just one quick word. I do think, when you have the US and China, right, not necessarily aligned, right? Holding hands with each other, like what they did in 2015, I think that will be the most – you know, that would be the most ideal, from the perspective of, you know, advancing the climate agenda. But that’s clearly not possible anymore. But at least these two powers doing the same thing, right? Rolling towards the same direction, then you have a much better chance to get the others, right? The likes of Australia onboard. And one example of this, we just witnessed one example of this, right? The Chinese carbon neutrality, the 2050/2060 long-term commitment, right? China announced it last year and then, all of a sudden, Japan and Korea felt that they are really obliged to do so as well, and that further triggered a whole set of other countries. Australia now is considering it. Russia just announced it. So you, you know, that’s, kind of, one way you get everybody on board, even without Washington and Beijing holding hands with each other.

John Kampfner

A quick question, if I could invite Austin Short to ask your question please? Austin Short are you there? You’re on mute.

Austin Short

Okay, yes, sorry, I’ve got it, and yes, thank you all. Yes, I was thinking about carbon tax. Isabel mentioned about mechanisms, and that seemed like quite a good one. What I’ve read and heard about the US is that they’re not likely to have it and they wouldn’t want the EU to impose the border tax. So I was wondering if China or the USA, if the panel sees them as likely to introduce their own carbon tax, and how they might respond to the EU introducing a border tax to balance its carbon tax?

John Kampfner

Thank you, and as we’re running up against time, I’ll just read out the final question on a different point, and maybe the panel can divide it up among themselves. From Rosemary Foot, “Is there any place for formal international verification of NDCs? Is this NDC approach the only way to go and to get US and Chinese commitments, other countries too?” So, Isabel?

Isabel Hilton OBE

Gosh, I wouldn’t bring in an argument about formal verification at this point. I mean, it was pretty contentious last time we tried and I think it wouldn’t be terribly helpful. In terms of – oh gosh, so many questions. India is unlikely to set a target or even an NDC, however, it does have a climate programme, it has a massive solar programme, and I think that that will probably, since China’s intervention is unlikely to be helpful with India, but the United States could certainly maintain an encouragement to India to enhance and grow that programme and eventually get to a policy declaration.

The worry, of course, about the United States, is the mid-term elections coming up soon, and then, you know, the next Presidential election, and I’m sure John Kerry gets asked this everywhere he shows up. And if there is to be a big success in Glasgow, I think we haven’t talked much about the trillions, we’ve talked about the 100 billion and the failure to deliver that. That is very important for the negotiations and the mood. It’s not, frankly, all that important for the transition. What is important for the transition is the cost of capital and it is where investment goes.

And I think that even in the United States, if you are to reach for a bit of hope about there not being another sudden reversal, remember that Trump couldn’t save the coal industry, regardless of his efforts. He, you know, it did decline, and it will go on declining, and once the United States has seized on the fact that China has invested heavily in dominating the technologies of the future, and that the laggard economies, the economies that do not understand that this transition is underway, and they will be left behind if they don’t join, I think that in the end will be as important as what’s happening in Washington for the direction of the United States on climate.

John Kampfner

That’s really, really interesting. Pete, if you could also address the question about carbon tax as well, and the role of the EU in your – we’re coming up against, sort of, closing remarks now.

Peter Ogden

It’s very interesting, it’s a great question. I think it’s going to be a top question of next year, is how this this rolls out. I mean, I think it’s going to be – and how Europe approaches this, implements it, with whom, and how that gets shaped. I think that there has been a, sort of, sense that it’s going – they’ve paced, its unfurling in a way that I think is good, because it allows us to get through this COP. I think the US is trying to still understand what its domestic situation is going to be. And a lot of the – this – a lot of its climate efforts are still wrapped up in this big budget bill. And I think, depending on how that, you know, how that plays out at the end, I think that’s when they will have to take real stock of what it would mean, what kind of, you know, what kind of relation – how they – how our economy would sit, vis-à-vis a border adjustment mechanism in Europe, how would China react? So I think there’s a little bit of, we have to, sort of, see what – see where we sit domestically on this issue and then figure out what that would look – what that means for international, sort of, engagement. But I’m not, you know, ruling out that there isn’t some way in which the US, you know, navigates, you know, an international system, which more other countries are starting to utilise for adjustments…

John Kampfner

Right.

Peter Ogden

…on climate specifically.

John Kampfner

We’re coming right up against time. I’m going to set you all a task, and it’s a very short one. You’re a newspaper headline writer, and it’s the day after COP has finished. And particularly with reference to what we’ve been discussing, the US-China, would you please write my headline for me? Who wants to write the headline? Go on, Li Shuo, you start.

Li Shuo

Well, is that the headline that we want to see or…

John Kampfner

Well, no, it’s what you think…

Li Shuo

…you think we will see.

John Kampfner

It’s what you think will it be.

Li Shuo

Well, climate course – you know, global climate course is muddled through, much more to be done in 2022.

John Kampfner

Much more to be done. Isabel.

Isabel Hilton OBE

Well, the key question is which paper am I writing a headline for? Anyway.

John Kampfner

Let’s – shall we be a bit neutral? Well, I don’t know. What do we think? What would be…

Isabel Hilton OBE

Well, you know, we’re in the UK…

John Kampfner

Let’s say the Financial Times.

Isabel Hilton OBE

…we know how this plays. But if you were writing – let’s say the FT, okay.

John Kampfner

Yeah.

Isabel Hilton OBE

So “Climate talks”, no, “Climate – Paris survives, but more to be done.” I’m with Li Shuo on this, yeah. So Paris, the Agreement, I think, will survive, but the work remains.

John Kampfner

Pete, yours is the final one, and you can’t end it with saying, “More to be done”.

Peter Ogden

Well, that’s good. I quite like – I love Isabel’s notion of – we could think about how other – what other newspapers might choose to put for their headlines. The – which I think is actually – I mean, there’s some truth in that, right? I mean, a lot of this is going to be, you know, depending on how you look at it and what you’re trying to find and how you, sort of, see the project is going to shape; how you read it. I think clearly, and I agree more – you know, if I can’t say – ‘cause I think people are going to say some balance of, “There’s been progress, but clearly, the world is, you know, there’s going to be a huge amount of urgency to get this done, going forward.” So I don’t know, I’m having trouble thinking of something that – and you blocked me from the good headlines that Isabel and Li Shuo came up with.

John Kampfner

Okay, well, we’ll let you off, as it’s – I didn’t give anybody any warning, and we are up against time, and apparently we are going to be ushered out of this very nice building in Central London. So I’d like to thank the audience for attending and for some excellent questions, and I hope you’ve got some interesting takeaways from it. Do, if you haven’t yet, as I say, had the chance to read the paper that I have written for the Chatham House website, it’s also a shorter version on Project Syndicate and Tortoise, the website, as well. Do please do, looking as I say, at the role of big power rivalry and how we tackle climate change. But I’m left to thank the Chatham House organisers and particularly our excellent three person panel, Li Shuo, Isabel Hilton and Pete Ogden. Thank you all so much for sparing the time, really appreciated you doing that, hope to – that we will reconvene in other formats at another time. Good luck with your observing of COP26. Let’s hope we can all suggest that the glass is half full rather than half empty at the end of the what’s going to be very difficult talks. Thank you very much to everybody. Good afternoon, good evening, and good morning.

Pete Ogden

Thank you.

Li Shuo

Thank you everybody. Take care.