The US and China: where they stand ahead of COP21

Source: gsnetworks.org

With just days away from the landmark COP21 UN climate change conference in Paris, we look at the top two players and how their actions at home are giving us reasons to be optimistic. The globe’s largest superpowers – the USA and China - are heading to COP on the back of a historic joint agreement to limit emissions. They are also enacting some key carbon reduction policies at home whilst bolstering their renewables sector. With one outgoing president and another on the rise, legacies are here for the making. 

For the US, much has changed. Under George W Bush, the US remained outside Kyoto and US negotiators were often in different rooms from the rest of the world in more ways than one at previous international climate change conferences.

Today, President Obama has put the US firmly at the heart of the climate talks in recent years. Mr Obama's rejection of the Keystone XL Pipeline, ending a seven-year saga with a declaration that the project is "not in the national interest” is proof of his legacy building. Alongside a commitment to expand the US’ ever-growing renewables sector and the ‘war on coal’ through the Clean Power Plan, it seems that the US is serious about urging other nations to follow suit and confront climate change. This stance from the US ahead of a major international climate change summit is unprecedented.

The story on the other side of the Pacific is as optimistic. China now hosts the largest wind power market in the world and has built their power generation from renewables up from scratch in just over 10 years. A recent IEA report stated that renewable growth rates in China will amass an impressive 40% of all renewable capacity gained between 2015 and 2020. They are indeed outspending most when it comes to renewables - in 2014 China spent more than $80bn in new renewables generating capacity, higher than the EU ($46bn); Japan ($37bn) and the USA ($34bn).

However any success in Chinese investment in renewables is of course checked by the fact they are continuing to burn a lot of coal. Despite a coal reduction commitment, it still supports two-thirds of China's energy use and half of all coal consumption globally. For a country which commands a population of over 1.3 billion, every slight adjustment to coal consumption can have a big impact. There is also fear that China is not accurately reporting its coal usage, with the EIA asserting that the country burnt up to 14 per cent more coal between 2000 and 2013 than previously reported.

Whilst China has a long way to go, the signs of it reducing its emissions and tackling the coal issue is looking more encouraging. Total energy consumption in China has slowed as its economic growth has eased. As the composition of GDP has shifted towards the development of service industries thus transitioning away from industry, especially heavy manufacturing, growth in coal consumption can be expected to weaken.

China's major air pollution challenges have led to new policies and regulations to restrict coal use in coastal China, to upgrade the nation's coal-fired power generation fleet and to accelerate the increase of alternative energy technologies. The Made in China 2025 proposal unveiled by the State Council in May 2015—China's first action plan to modernize manufacturing through information technology and other innovations—could also accelerate reductions in energy intensity and changes in energy consumption patterns, if successfully implemented.

Whilst the future is brighter than it has been, there is a still a long road ahead if we are to reach a durable agreement in Paris. We still need both the US and China to engage with tackling the issue of climate change more seriously than they previously have done if an optimal solution is to be reached. Once locked in, it is equally important that other major developing economic powerhouses such as India follow their lead but the road to Paris has been built on strong foundations and the signs are looking good for serious action. 

Douglas McIlroy

Hill & Knowlton Strategies Search