COP28: China is a rich country. It can no longer cry poor on climate

United Nations climate conferences typically break into debates between large voting blocs of member states.

At the time of the first major climate change conference, in Rio de Janeiro in 1992, China was one of the least developed nations. Its per capita income was below Haiti, Niger and Pakistan. The export sector was smaller than that of Sweden or Austria, and its airports saw fewer departures than Norway’s.

Its emissions were just 12 percent of the global total, and on a per-capita basis it wasn’t even in the top 50 emitters. As recently as 1985, China had generated less electricity than Canada, and produced less steel than West and East Germany.

With nations set to gather for the latest such meeting in Dubai this week, things have changed beyond recognition.

China is likely to produce half the world’s steel and coal this year, and emit more carbon than every developed nation put together. Even adjusting for its huge population, it now consumes more energy and generates more pollution per person than most countries in western Europe. Visitors to its sparkling cities find a country whose amenities rival those of the richest nations. China’s roads, railways, power facilities, public buildings and other infrastructure now add up to a richer stock of public capital per capita than can be found in Australia, Spain or the UK.

One last crucial measure may soon flip. When China joined the World Trade Organisation in 2001, it was barely outside of the ranks of low-income countries, a category the World Bank reserves for the least developed nations. That gave considerable weight to the claim that its emissions needed to be given a pass — that it should, in the language of climate diplomacy still quoted today, benefit from “common but differentiated responsibilities.”

Rapid growth relative to the world since the Covid-19 pandemic means it is now closely tracking the dividing line the World Bank uses to separate
high-income nations from upper-middle-income countries. Low inflation and a stable exchange rate may push it above that level in a matter of months.

“It is very close to reaching the threshold for a high-income country,” said Penny Goldberg, a Professor at Yale University and the Bank’s chief economist from 2018 to 2020, by email. “It may not happen this coming year, but it will happen very soon.”

Economically, this would count as one of the most remarkable transformations in human history, and comes decades earlier than anticipated. In the same year as the Rio conference, former leader Deng Xiaoping said it would be “an extraordinary achievement” if China was able to attain the status of a moderately developed country by 2049.

In terms of global warming and the diplomacy centered around it, however, it will shake up assumptions held for decades. United Nations climate conferences typically break into debates between large voting blocs of member states. The prime negotiators on one side are the Group of Seven, representing developed states; on the other, the Group of 77, a caucus of developing nations which counts China as its most important constituent, though it’s not formally a G77 member.

It’s an alliance that is looking less and less tenable as China’s wealth, development and financial capacity — not to mention its carbon footprint — come more and more to resemble the developed nations of the G7. Close to 60 percent of the increase in global emissions since 1992 has come from China alone, while pollution from developed countries has essentially stood still.

“We are an inbetweener now,” said Li Shua, the incoming director of the Asia Society’s China climate hub. Despite the transformation in the country’s wealth and power, “our muscle memory is still very much in the developing world and the Global South. The result is we have an identity crisis.”

The bigger question will be around how others perceive this. Countries in South Asia, Southeast Asia, sub-Saharan Africa and small island nations make up the bulk of G77 members, and are already finding themselves most at risk from the growing effects of climate change. Flooding last year that caused more than $30 billion of damage in Pakistan, and years of droughts that have left 4.35 million people in the Horn of Africa dependent on aid, were both exacerbated by human emissions.

Increasingly, it is China that is causing that pollution. Even if you factor in its late start to industrialisation, since 1850 its cumulative emissions from fossil fuels and land-use practices have amounted to 309 billion metric tons, according to the Global Carbon Project, ahead of the 306 billion tons in the European Union and trailing only the US.

The US and EU are aiming to reduce emissions in 2030 to around half of their level in 2005, but China is on track to roughly double the sise of its footprint. The galloping pace of its renewables installations and the weakened state of its real estate market may well ensure that pollution starts falling from as soon as next year — but the government has no commitment to do so until 2030, or even a promise about what the peak level will be.

One possible breakthrough will come from finance. A traditional bargain in climate meetings has been that rich countries should rein in emissions at home while providing funding for other nations to invest in preventing and adapting to climate change. Wealthy nations may have finally hit a target to provide $100 billion a year for such initiatives, the Organisation for Economic Cooperation and Development said this month.

That’s an area where China has natural advantages. One of President Xi Jinping’s signature policies has been the Belt and Road Initiative, a project to build infrastructure projects in strategically significant countries in Asia and beyond. Promises to “green” the initiative have seen emphasis shift from projects like the fleet of coal-fired power plants constructed in Pakistan over the past decade to providing an export market for the terawatts of solar equipment that Chinese factories will produce over the coming years. With the country’s current account surplus now as large in dollar terms as it was during the peak of the late-2000s export surge, there is no shortage of capital.

The best way for China to escape its current dilemma is to accept that it is now a rich country, and behave accordingly. Lean toward the fall in emissions as the economy grows beyond the carbon-intensive phase of its industrialisation. Pump money into a fund for less developed allies to prepare their own infrastructure for a net-sero world. Take the opportunity of US President Joe Biden’s absence from this year’s UN conference to seise the role of the world’s undisputed climate leader, and start pushing for more, not less, ambition.

The environment has for several years been an area where Beijing has sought to practice “major country diplomacy” — behaving as a rich and responsible power that others can look up to and seek to emulate. The longer it waits before accepting that it’s already cashed the moral benefits of carbon-intensive industrialisation, the harder it will be for it to make common cause with nations that will look to follow its development path.

David Fickling is a Bloomberg Opinion columnist. Views do not represent the stand of this publication. 

Credit: Bloomberg