China, Climate Change Watch Now: Will China Save The Planet?

October 27, 2020
By Perry World House

China’s recent pledge to reach carbon neutrality by 2060 is the world's largest climate commitment to date. But is it feasible economically, technologically, and politically? Can China give up coal and transform its power sector, industry, transportation, and buildings fast enough?

Achieving this goal will be a colossal undertaking for a nation that is still heavily dependent on fossil fuels. But paradoxically, it also leads the world in the very clean technologies that make this target feasible. China faces fundamental economic and political challenges that could derail its low-carbon energy transition. Yet there is reason for hope.

In this edition of The World Today, Barbara Finamore of the Natural Resources Defense Council discusses these critical issues with Scott Moore, Director of the Penn Global China Program and a leading expert in climate change, environmental sustainability, conflict, and water rights.

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Jocelyn Perry [00:00:00] Thank you for joining us for The World Today, a weekly program at Perry World House, the University of Pennsylvania's global affairs think tank. I'm Jocelyn Perry and I manage the Global Shifts research theme here at Perry World House. I hope you're all safe and healthy during these strange and difficult times, especially here in our West Philadelphia community. I'll begin my formal introductions in a moment, but first, a few logistical notes. After the conversation, we'll open the discussion up to questions from the audience. To ask a question, please use the Q&A button at the bottom of your Zoom screen in the middle. You'll also see a chat button. Please save the chat area for any technical or logistical issues, but if you can't see the Q&A button, feel free to put your questions there as well. We'll drop resources in the chat during the event and at its close. Finally, please keep your questions clean and safe for work to help us have a successful event.

[00:00:50] Welcome to today's event, 'Will China Save The Planet?' We could have no more apt discussants than Barbara Finamore of the Natural Resources Defense Council, who wrote the book on this very topic, and Scott Moore, director of the Penn Global China Program here at Penn and an expert on climate change and diplomacy. Thank you both. We're thrilled to have you here today with us.

Barbara Finamore [00:01:09] Thank you for having me.

Jocelyn Perry [00:01:12] We're so excited we could have this conversation now, which we've been planning since the spring, but if anything, these topics have only become more urgent with China's new commitment to reducing its carbon emissions and increasingly pointed critiques of the U.S. withdrawal from the Paris agreement, and as we await the results here from the presidential and other elections next week in the United States. Thank you, Barbara and Scott, for being here. And it's my pleasure to introduce you. Barbara Finamore is the senior strategic director for Asia at the Natural Resources Defense Council and has been working in environmental law and energy policy for nearly four decades. She founded NRDC's China Program, which was the very first clean energy program to be launched by an international NGO. She's joined by Scott Moore, the director of the Penn Global China Program and a political scientist with interests in environmental sustainability, technology, and international relations. Scott previously worked on environment, science, technology, and health issues for China at the U.S. State Department and extensively on the Paris Agreement. Thank you both for being here. I'll turn it over to you.

Scott Moore [00:02:13] Jocelyn, thanks so much. And I want to thank Perry World House for hosting today's discussion. As Jocelyn mentioned, we had originally been really looking forward to welcoming Barbara to campus this past spring. And while we're sad that that we're not in person, we are nonetheless grateful to Perry World House for the chance to have this discussion and of course, to Barbara for joining us and bringing her experience and her expertise to bear on thinking about China and its role in environmental policy, as well as climate change and what is, as Jocelyn mentioned, a very important and probably decisive juncture with the upcoming presidential election and in the close aftermath of a brand new and very ambitious pledge to become carbon neutral by China by 2060. With that, I'd like to go ahead and delve into some discussion questions, after which we'll have plenty of time for discussion and question and answer with the audience.

[00:03:26] So, Barbara, you open the book with, I think, a fascinating anecdote and a kind of scene from a speech in a meeting at the Quinlan Hotel in Beijing in 1991, which I think is quite, at which China kind of first emerged onto the scene of international climate negotiations and involvement in international climate issues. And that is, of course, quite a bit earlier that I think most people tend to think about China playing a central role in global climate issues and negotiations. I think in the kind of popular imagination, we might sight that considerably later, maybe even after Copenhagen, which is, of course, something else you cover in the book. But I'm just kind of curious if you could kind of give us a sense, was that the period from that very first initial speech and meeting in 1991, was that a little bit of a kind of false dawn for China in global climate talks? And give us a kind of sense of what evolution took place after that point, that takes us up to Copenhagen and Paris Agreement that you cover later on in the book.

Barbara Finamore [00:04:43] You're right, Scott. People don't realize that Chinese experts began to be interested in researching climate change around the same time as the rest of the world. And they put together a lot of reports in the in the early 1990s and there was extreme debate and fighting among various Chinese government agencies. The Environmental Agency really wanted to move ahead with binding targets. The Ministry of Foreign Affairs was really concerned about avoiding that. And so it really wasn't a false dawn. I have to say that meeting of 41 ministers from developing countries that I happened to sneak into in 1991, because no representatives from developed countries were allowed in, really was the first time that these developing countries crafted a negotiation strategy that would relieve them from any binding obligations. This was the birth of the term "common but differentiated responsibilities" that really kept negotiations from proceeding for many years, because what it led to was dividing the world into developed and developing countries and coming up with different requirements for each. And that that was OK for a while until China became much more developed and also its emissions kept rising, but it still clung to these two developed developing countries things. So that was fascinating for me to be there at the birth of that. This principle was enshrined in the Framework Convention on Climate Change and in the Kyoto Protocol. And it was only after China really started to wake up to the need to take action on climate because of its own vulnerability that the Paris Agreement could take place, in which there was no distinction anymore, really, between developed and developing countries, and that each country would pledge to do what it can. And in fact, this new climate neutral agreement is the first time that China's stepped forward on its own to announce its first absolute carbon neutrality target.

Scott Moore [00:07:11] And I think that's, you make an important point about kind of China's sense of vulnerability to climate change. I think from abroad, international relations and geopolitics perspective, you know, we tend to think of China as this very powerful actor. But as you stress at several points in the book and I think underscored in your remarks just now, there is this important sense in climate and it may be environmental, a little bit more broadly of having a real sense of vulnerability and that driving involvement and and commitment to some degree, at least, to cooperatively tackling these global environmental challenges.

Barbara Finamore [00:07:53] I want to say that has only increased as it has for the rest of the world. But that real sense of vulnerability, not only does China have more population in low lying coastal cities that are very vulnerable to sea level rise. But just this past summer, the extreme torrential rains and historic flooding have affected already two hundred and forty million people since July. And its agricultural heartland suffered three major typhoons in two weeks that flattened much of its corn crop. This is only going to worsen in China, as in the rest of the world.

Scott Moore [00:08:39] I think that's such an important point. You also in the book talk quite extensively and understandably about how your organization, Natural Resources Defense Council, began kind of the process of engaging the Chinese government on climate and energy issues. And you talk about how that kind of began with a fairly narrow focus on energy efficiency, which caused policymakers' attention after a kind of electricity crisis in the early 2000s. And I'm just curious if you could also expand on that and talk about what other kind of factors or strategies you think helped Natural Resources Defense Council, as well as other Western environmental NGOs, influence policy. I think that's also another kind of aspect of China's climate and environmental policy landscape, that maybe not isn't necessarily so widely appreciated, is that there was at least at least a period there where Western environmental NGOs had some significant influence on policy design.

Barbara Finamore [00:09:39] Well, it was difficult for us at first because, as you mentioned, we were the only NGO, international NGO focusing on energy issues. And in fact, there were no Chinese NGOs at the time. There were no international NGOs, except for the World Wildlife Fund in Kunming trying to protect the panda. So we had initial challenges just explaining what an NGO is and how we could help. And there was a lot of confusion. So our approach has also evolved over the years. In the beginning, there was so much of bringing the best lessons learned and best practices from the West, a lot from California to China. We brought a lot of experts from China to the U.S. [laughs] I remember bringing one group to California and after a week there of sharing policies, they said the most amazing thing that had the biggest impact on them was California's clean air. And in fact, that was the major factor, I think, that really turned China towards climate action. Back in 2013, it was 'the airpocalypse.' It was incredibly high levels of air pollution that made living in cities like Beijing equal to living in airport smoking lounges, as if every man, woman and child in China was smoking 1.3 cigarettes every hour. Now, China really needed to take action on air pollution. And the interesting thing is, it's coal that is the leading source of China's air pollution as well as its CO2 emissions. So beginning that year, that's when China started taking action to cut down on coal. And so, our approach now, what we've done on coal. It's really evolved. A lot of it is a two way street of sharing best practices and experiences as China's leading the world in many of the clean energy technologies that we need. But also, our approach on coal is really to partner with a series of experts, research organizations, and academic institutions, and even industry associations to together map out detailed roadmaps for how China can wean itself off coal, how it can wean itself off oil. And what we're doing is building local champions in China because they're the ones, not us, who advise the Chinese government on what should be in its climate plans, its five year plans, its carbon commitments.

Scott Moore [00:12:26] Have you found that kind of interlocutors in the U.S. or other places that you may kind of try to effect that mutual learning, are they receptive to lessons to be learned from China? Have you, and have you kind of seen that change over time at all?

Barbara Finamore [00:12:45] Well, I remember when Arnold Schwarzenegger, when he was governor of California, came to China several times in order to try to buy this high speed rail technology to build a high speed rail between Los Angeles and San Francisco. That hasn't happened yet. So I believe there's a lot more that can be done right now within the U.S. to realize that what China has done, for example, with electric buses. China has 98% of the world's electric buses, and many cities have already pledged to go completely to electric vehicles of all types within the next two years. Now, 23 states in the U.S. have recently signed a memorandum of understanding, committing to only purchase electric vehicles within the next few years. And they're looking to California, which has pledged to make all new vehicle sales in 2035 electric. But they should also be looking to China's experience with electric buses, with electric two-wheelers, which it has 99% of the world's electric two-wheelers. And that in itself has probably cut more carbon emissions than any other transportation initiative. But yeah, I think there's still a lag in understanding that both countries have, and states, subnational groups, have a lot to learn from each other.

Scott Moore [00:14:23] I think that's kind of a concern. You know, I think you can certainly debate how valid it is. I think that's kind of always a bit of a concern about, as I think about sort of receptivity to those lessons, just kind of given that particularly, I think in the U.S., we're kind of so used to this sense of, OK, you know, we're happy to share our experience with others. But is the receptivity and the kind of cultural expectation there of can we fully kind of incorporate lessons from places like China? So I certainly am pleased to hear that that's the case, at least, in a few initiatives that you participated in.

Barbara Finamore [00:15:01] And of course, the issue of competition on clean energy is heightened today in this time of great tension between the two countries. But again, I think it's important to look to ways that the two countries can cooperate in ways that benefit both countries. For example, I mentioned California phasing out fossil fuel vehicles. Hainan Province has done the same. The central government in China is considering a national ban. If the two countries were to announce separate policies that are nonetheless coordinated to phase out these dirty vehicles, that would provide an enormous signal to manufacturers and financiers throughout the world that this is the future and they will put the necessary investment in to really scale up these clean technologies.

Scott Moore [00:15:59] And to your point, conceivably, maybe even subnational. If California were to were to be part of some initiative like that, you know, as you pointed out at times, California's kind of standards have helped drive, drive the auto market. So you could certainly imagine that a kind of joint announcement like that, even if it featured a subnational entity like California, could be very powerful. Another thing that you kind of talk about in the book is the differentiation of three big factors that have shaped China's response to environmental challenges, that is being public policy, markets, and technology, which we've talked a little bit about so far. But I'm curious if you kind of step back and, looking at the trajectory of the last couple of decades, give us a sense of how you would weight the relative importance of those different factors in shaping China's environmental policy, technology versus public policy versus markets?

Barbara Finamore [00:17:01] That's a very interesting question, Scott, especially because in China, they are so interlocked. China has something the U.S. really doesn't have, which is a long-term industrial policy. And it has combined all of those three areas in so many ways to drive forward the acceleration of these clean energy technologies, just, for example, with solar energy. China began simply by producing, you know, 98% of the world's solar panels, but they were all for sale in the West, particularly countries like Germany and Spain that had renewable energy policies. And then when the market dropped out in 2008 and the global environmental economic recession, China had all these solar panels on hand, nowhere to sell them. So that's when it decided to develop its own domestic market with a series of policies and subsidies and a renewable energy law, and single-handedly, the policy drove the technology adoption in China and then it drove the adoption so fast that now one out of every three solar panels is in China. And it's also the economies of scale. And those policies have driven down the costs for everybody - solar panels by 94% in the last decade, but not too much focus on markets, right? It was really government-driven. And so then you see a situation where there's overcapacity. And China could not keep up those renewable energy subsidies. There was a $15 billion shortfall in the renewable energy subsidy. So now they're trying to transition to a more market-based approach. They are cutting the subsidies dramatically for solar energy, for wind energy, for electric vehicles. And it's a you know, a lot of companies are going out of business. It's a very rough transition. But the fact that the cost of these technologies has dropped so much means that they are increasingly able to compete with their fossil fuel competitors without subsidies. So they're trying to move to a more market-based approach. But it is challenging.

[00:19:32] And by the way, now they're trying to replicate their success with solar and wind, with other new technologies such as hydrogen, which is necessary for industrial facilities, for heavy duty vehicles, perhaps for shipping, and also for offshore wind. And they're using that same playbook. So it's going to be interesting to see what happens, because now we've got Europe saying, OK, we lost the solar battle, but we're going to compete and take over the lead on hydrogen. We're going to take over the lead on offshore wind. They're putting in massive amounts of investment and hopefully the U.S. Will join the race again before too long.

Scott Moore [00:20:16] So I'm kind of curious to ask you if you think this kind of - how confident are we that this is kind of a race to the top or kind of a virtuous competition versus something the opposite? Certainly, I think, kind of hovering on the outlines of that story are concerns over unfair, you know, kind of market competition, overreliance on subsidies. So I guess I'm just kind of curious if you, and I mean, as you pointed out in this latest kind of iteration, we're not talking about a focus from Chinese firms and the Chinese state on kind of the lower value added part of the clean technology sector. We're talking about that kind of bleeding edge, hydrogen and things like that, where there is, I think, a lot more direct competition, both at the firm level and the kind of country level. So I'm just kind of curious, like, how optimistic are you that this can kind of be somehow shaped to be a race to the top and a virtuous competition versus something that maybe leaves us a little worse off than we might otherwise be?

Barbara Finamore [00:21:32] Great question, Scott. In order to make it a virtuous competition, the U.S. really has to step up its investment in R&D, innovation. That's where we excel, developing those next generation technologies. I mean, China has a plan now for hydrogen. But it's not necessarily green hydrogen based on renewable energy. It has solar and wind panels, and the U.S. can't compete with those massive economies of scale. But these aren't the highest quality panels. It's the next generation panels and next generation batteries that maybe don't rely on cobalt and other materials that pose a lot of environmental problems. That's where we need the U.S. to step up. And I think it will, hopefully, under a new administration.

[00:22:33] Europe also understands this and I think given the economics, this is where, we're reaching a point where the transition to low carbon technologies can't be stopped. Coal is on its way out despite its continued popularity in China. And the question is only how fast? How fast it can ramp up? Because it is the leading market opportunity of the 21st century.

Scott Moore [00:23:10] Just another kind of related question on clean technology development, going back, you know, kind of a decade or so, there was a lot of focus and enthusiasm for joint U.S.-China, development of CCUS - carbon capture, utilization, and sequestration. Primarily, I think due to just cost differentials and the fact that it is often thought to be easier to obtain like regulatory approval and things like that for a CCUS project, I'm curious as to where you would rate CCUS as kind of both a priority technology, and obviously this it does to some extent extend potentially the time horizon for using fossil fuels - if you can find a reliable way of sequestering the carbons, that it doesn't enter the the atmosphere. So I'm kind of curious how you would evaluate that technology both as kind of a priority and also kind of does that remain a potential promise,  a promising area for clean technology cooperation between the U.S. and China?

Barbara Finamore [00:24:17] You're right, Scott, cooperation on CCUS was really going strong there for a while. And then it seemed to trail off - in part because without a price on carbon, there was no market driver for capturing carbon. Now the other problem is, for CCUS, is that the cost of solar and wind has gone down so dramatically. In fact, the International Energy Agency issued its annual World Energy Outlook last week, and it called solar power 'the new king of global electricity', and also now the cheapest electricity source in world history. CCUS is extremely expensive here. So that has really been a problem. However, however, with China's new carbon neutrality target, becoming carbon neutral means that China needs to reduce its reliance on fossil fuels as much as possible, and then offset the rest, either through natural-based systems or technologies such as CCUS that absorb more emissions from the atmosphere than they put in. So there's a real question now whether that target is going to provide a new incentive for CCUS in China and in the many other countries that have announced these targets, these carbon neutrality targets.

Scott Moore [00:25:55] Another kind of, I think, feature, and you alluded to this, of China's current climate energy policy landscape has, of course, to do with not not just its domestic policy and investments in energy infrastructure, but overseas as well. And I think certainly in the U.S. policy world, you often hear a lot of criticism of China's overseas investments, including through the Belt and Road, in fossil fuel infrastructure. So I'm just kind of curious how you respond to those kinds of points and how optimistic are you that the Belt and Road can be green?

Barbara Finamore [00:26:35] Yes, that's a really important point, because China, you know, until recently, has been responsible for financing at least a quarter of all the coal plants that are being constructed overseas. This has huge implications for our climate policy, because if you look at the 120-plus countries that comprise the Belt and Road, right now, they're responsible for about 26% of global emissions. But if they continue to build fossil fuel infrastructure, that percentage could jump to 66%, two thirds of all global emissions. And that could really wipe out any opportunity for us to meet our Paris plan targets. China has vowed to make the Belt and Road green. They've taken steps in that respect, though the targets are still not binding. They've set up international groups for developing more requirements for social and environmental benefit review that have more teeth. We're a member of one of those groups. But interestingly enough, economics here is going to play a big role. Because of China's slowing economy and because of the global pandemic, China's investments in Belt and Road countries and the energy infrastructure have dropped by 50% in the first six months of this year. And they dropped last year. And they're probably going to continue to drop, not only because of China's economy, but because of the vulnerability of these countries. They're not able to take on this infrastructure financing, and they're asking China to cancel or restructure a lot of the loans.

[00:28:37] In fact, interesting as well is that this year, the amount of financing of renewable energy projects by China is more than of the coal fired power plants. So we hope that's a trend that's going to continue. In fact, I think going forward, we're probably going to see more soft infrastructure investments by China in Belt and Road countries, things they've already announced, a Digital Silk Road and a Health Silk Road to try and help other countries. I think what really needs to happen, because solar and wind are so cheap, what China can really do, perhaps in collaboration with the U.S. and other countries, is work with these recipient BRI countries to build their capacity to integrate renewable energy into their grid, to develop those policies, to develop the grid infrastructure, and integration of those renewable energies. That's what's really needed right now. That's what the U.S. and China know so much about. The U.S. is really a leader in those grid integration policies. And China has a lot of lessons learned, as I mentioned before, about what to do and as well as what not to do, that I think can be really valuable. So I'm hoping that the combination of economics and the understanding of what these countries really need can help to transform the Belt and Road into a greener vehicle for development.

Scott Moore [00:30:20] And while we're kind of on the topic of lessons for other developing countries potentially - and developed, for that matter - and before we get too far away from that kind of policy, markets, technology, framing. I'm also curious how you would kind of rank China's environmental policy initiatives in terms of their importance and their relevance to other countries of thinking about things like the feed in tariff structure for renewables, the emissions trading system, air pollution control law, or other policy initiatives that have helped to promote clean energy and climate objectives?

Barbara Finamore [00:31:00] Right. Right. You know, there's a lot that China has done, much more than people realize. I mean, if you look at the number of renewable energy policies that they have put in place in the last few years, as well as air pollution control policies, and they're continuing to tinker with it, it's really remarkable. I think what really has to happen now - the feed in tariffs, as I mentioned before, is useful, only because China now knows how to avoid going overboard with its subsidies. Air pollution control programs - very important over the years, though, focusing really to cut China's air pollution requires the sort of dramatic restructuring of its economic model that this carbon neutral target will require. Away from heavy industry, away from exports, towards more services and so forth. But I think, again, what many recipient countries need right now is how to make the grid more flexible. That's something that every country is grappling with now, including the United States, including China. We've held a number of collaborative workshops between the two countries on grid flexibility. We're all following and learning our way here. And I think that's something that's going to be so important going forward.

Scott Moore [00:32:44] Barbara, just a couple more questions for you as part of our discussion section and then we'll turn to some audience questions. But I wanted to just sort of move into a couple of recent, talking about a couple of recent developments, especially the pledge for China to become carbon neutral by 2060 that Xi Jinping announced at the U.N. General Assembly just a couple of weeks ago. How credible do you think this pledge is? And, of course, I guess since then, Japan has made a similar pledge by 2050. But apart from that, I'm curious how optimistic you are that that will lead other major economies to be similarly ambitious?

Barbara Finamore [00:33:29] Well, that target announcement by President Xi Jinping, I think, took the world by surprise. China has joined now the EU and the UK and over a hundred other countries in announcing these mid-century climate targets. Is it credible? China, I think so. I think so, though it's going to be incredibly challenging to meet it. But I think the fact that the president himself made this announcement, the first absolute carbon target by China, by itself, not in collaboration with other countries, the fact that it was made at such a public forum is really important within China. That sends a very powerful signal to every stakeholder in the country that climate change is now a priority and it's going to inform every decision the country makes going forward. China has a history of under-promising and over-delivering on every one of its carbon climate targets that it's made so far. So I think it can probably eventually do better even than it's talking about right now. And the other thing is, as I said before, it's in China's own interest to do this sort of deep decarbonization. It's important for the climate. It's important for China's environment and the health of its people. And it's important for its economy. So I think all of these drivers are going to align going forward. But it's going to require dramatic restructuring of China's energy system, its transportation system, its industry, its urban design, and every aspect of its society and economy. And it's going to be much more challenging for China than any other country, because don't forget, China burns half of the world's coal and it produces half of the world's steel and cement. And it burns coal directly in those industries. It has the world's largest auto market. So changing the trajectory in China is is no easy thing. But I think that's it's really going to make a difference. And like you said, it's already, I think, prompted Japan to make the announcement yesterday of going to net greenhouse gas emissions, net zero greenhouse gas emissions by 2050. That's going to put pressure on other countries like South Korea. I think, you know, it's going to put pressure on the United States under a new administration to announce a similar target, and that provides some much needed momentum to the international climate negotiations.

Scott Moore [00:36:25] Yeah, I think that's such a great point. And speaking of kind of virtuous competition and a race to the top, I think that's maybe the best sign we've had so far, that that is the emerging dynamic. I'd be really curious, I'm not a much of a Japan specialist, but I'll be really curious to kind of see and read and hear what people have to say about the pledge in the weeks ahead in terms of what it was motivated by. And if there is kind of that element of geopolitical or economic competition behind some of it, if so, I say maybe we need more of it.

Barbara Finamore [00:37:06] Now, what I've read is that there's still the same concerns that have been expressed about China's pledge, which is the devil is in the detail. How is each of these countries going to achieve this? And interestingly enough, we have an indication of that from China's leading climate scientists, a group of whom announced a very detailed proposed plan last week that is so fascinating. It's going to be very influential to China's mid-century climate plan that it needs to submit to the U.N. and reportedly will do so in a few months. And more importantly, its 14th five year plan is going to be a litmus test on how serious is China going forward. But this proposed plan really calls for strict controls on new coal plant construction in China, which is so important because right now China has under construction or in the planning process as much new coal-fired power as the entire coal fleet of the United States or India. That has to be the first thing. And putting a cap on carbon for this next five year plan, coming up with CO2 emissions caps for key industries and cities. So China has the opportunity, if it really takes these proposals seriously, of taking off running. However, however, it's going to cap CO2 emissions sometime before 2030. So that means it's still going to go up in large part because of oil emissions and that means it's going to be a steeper trajectory downward after 2030.

Scott Moore [00:38:55] Last question before we return to our audience here, but since, since we're a week away, I have to ask. You motivate the book in large part with the election of President Trump and the United States' kind of retreat from international climate issues. How reversible do you think that is, depending on what happens a week from now? And how do you think that impacts China's role?

Barbara Finamore [00:39:20] Well, in a new administration, of course, we don't expect any change if the current president's reelected, except continued rollback of all the climate action plans and policies that have been in place. But under a new administration, I think it's going to take time for the U.S. to build its credibility back up and to regain its climate leadership through such things as rejoining the Paris agreement, which, you know, Biden has pledged to do on day one and announcing stronger Paris climate targets for 2030 and hopefully a new net zero emission target by 2050. We heard Biden mention that in the debate the other day. But that's that's just the beginning. I'm glad to see that even now, in these past four years, so many states and cities in the U.S. have stepped up, and companies, and individuals, and organizations, to announce their own climate targets and taking climate action. So I think that's going to help a lot in rebuilding U.S. credibility. But, you know, U.S. climate policy has seesawed back and forth for decades based on who our president is. And countries are wary right now. In many respects, they've decided to move ahead without the United States. I think, however, that collaboration between the US and China can be one of the bright spots, even in these times of increased tension, just like it was under the Obama administration. And there's lots of room for working together, as I mentioned before, on a whole range of issues that both countries can benefit from.

Scott Moore [00:41:14] Barbara, thanks so much. And you've prompted a lot of questions. So I think we'll have plenty to talk about here in the last 20 minutes. I'm going to try to just sort of group some together to hopefully allow us to try to get to as many as possible. The first kind of category, I would say, has to do with kind of domestic political and economic factors that bear on China's climate and energy policy. So one is kind of the relationship to air pollution, if you could say a little bit more about that? The second is just expanding on kind of the Belt and Road point, the extent to which China's kind of commitment to environmentalism may be a little bit less than it first appears? And a little bit more calculated towards influence building than kind of genuine environmental outcomes? And then finally, the implications for the renewable transition for like cost of manufacturing exports, that that sort of thing?

Barbara Finamore [00:42:19] OK. So air pollution is still probably the main driver of action in China that relates to climate change, because of the relationship between coal and climate and air pollution. What we've seen, however, with this pandemic is that China's stimulus package has not necessarily followed a low carbon path. And in fact, there's very strong voices that want to slow down the transition in China to low carbon, including the fossil fuel industry and state owned enterprises, heavy industry. And so what we've seen is, in the stimulus, China has, to a large extent, continued to fund, to take the same tactics that worked before in 2008, say, in financing heavy industry, in construction, more homes, infrastructure. That has led to an increase in air pollution. So because China's main concern is always the economy, in the past year or so, that has led it to focus less on air pollution. It's a missed opportunity in my mind to use the stimulus to really push through this low carbon transition, although I should say that there is a lot of focus on infrastructure, such as electric vehicle charging. A lot of money is coming from stimulus to build more of that or ultra high voltage lines, which, you know, should be used just for renewable energy. In fact, China just opened its first ultra high voltage transmission line, it's only transmitting renewable energy, things like that. So air pollution is a key driver. It's taken a bit of a backseat with this economic crisis that the world is in right now. But I hope that will come back because I think it's a key driver of clean energy action in China.

[00:44:33] The Belt and Road Initiative. Yes, I think the main driver behind the Belt and Road Initiative is that kind of building up of soft power and soft power overseas. A lot of the projects that were branded as Belt and Road initiatives began before the launch of this program, they were just rebranded as Belt and Road. A lot of it is just market-driven, to be honest, rather than driven by the same kind of industrial policy that has been so successful in driving clean energy. And China, a lot of it is just state owned industries looking for a profit overseas. And so that's what needs to change, is a development of more guiding policies and programs in China that are pushing that investment and financing in a clean direction. And it's getting there. But I think, as I mentioned before, I think economic factors are also moving in a cleaner direction. And what was the third question you mentioned?

Scott Moore [00:45:42] The third one was about how the renewal, the transition to kind of a more renewable dominated energy mix might affect cost of manufacturing exports?

Barbara Finamore [00:45:52] Yeah, well, as I mentioned before, China's policies and its economies of scale and its domestic demand, they've driven the cost of solar down by 94% over the last decade. They've driven the cost of wind by over 50%. And now the batteries, the batteries for electric vehicles and for powering the grid have also come down by something like 90% over the last decade to the point where all these technologies are becoming cost competitive with the fossil fuel counterparts. So I think that has made a difference throughout the world, not just in China. We're continuing to see that. What's going to happen, though, is how do you bring down the cost of these expensive technologies that are going to be needed in the next generation, deep decarbonization, like hydrogen, like offshore wind and maybe carbon capture, utilization and storage?

[00:47:02] That's something China wants to replicate its playbook in, bringing the cost down of those technologies as well. But right now, it has been of benefit to every country around the world, despite the competition that we see, despite the solar tariffs, for example, that Trump put on imports from China of solar panels, they're continuing to come down in price nonetheless. The U.S. consumer benefits, the job market benefits, the fastest growing jobs in the U.S. have been solar panel installer and wind turbine installer. That's where I think the benefit comes in. Rather than trying to restore U.S. manufacturing capacity of conventional clean energy technologies - I don't think we can compete, if we saw what the size of these are. The batteries, for example, the amount of new battery manufacturing capacity that China is building right now is going to be twice the entire global capacity within the next couple of years. But what needs to be done, as I said, is developing new batteries that don't rely on scarce metals and that are cleaner for the environment. So anyway, I think I think that is moving in the right direction.

Scott Moore [00:48:37] Great. Thank you, Barbara. So we have a couple of questions, kind of more about international climate negotiation issues. Before I get to those, though, quick question, because several people have wondered about the document you mentioned outlining kind of the plan to get to carbon neutrality. Is that the Tsinghua plan that that has been mentioned? Is that the same one there?

Barbara Finamore [00:49:02] There are two documents from Tsinghua institutes. The one I mentioned is the one from, I think it's the Institute of Climate and Sustainable Development. It's led by Xie Zhenhua, who was China's chief climate negotiator for 10 years. And that brings together the results of 18 different organizations, research institutes within China. But there's another one equally authoritative by another institute in Tsinghua, Institute of I think it's Energy and Environment, that has another set of scenarios for how China can meet its carbon neutrality target. So these are becoming available. There is a livestream today, I think, of the first English language livestream of the first set of recommendations that should be available online sometime within the next day or two.

Scott Moore [00:49:56] Great. I will do my best to to locate that quickly, the link quickly, and then drop it in the chat. While I do that, a couple of questions. One about China's legitimacy in international climate negotiations. If essentially human rights abuses have damaged China's credibility in terms of being a climate kind of leader and champion on the international stage? Then the second question is about the common but differentiated responsibility principle, and really how well that stacks up with kind of China's current levels of wealth and the extent to which we kind of need to rethink that tiering?

Barbara Finamore [00:50:36] Yes. Well, there are a lot of issues damaging China's reputation abroad and damaging the relationships with the U.S. and other countries. These are real. They have, a lot of them are ones that have been around for quite some time. My feeling is that we have to find ways to raise these issues with China, to compete with China where we need to. And also to cooperate. Those are not separate things. As Joe Biden said, we can walk and chew gum at the same time. We can find ways to address the most serious existential crisis of our world. And if we don't? If the two largest emitters can't work together, it's going to be the biggest national security problem and human rights problem that we face in the world. So we just have to find ways to address these issues simultaneously. And I don't, and China's credibility on on climate really depends to me on how well it carries through on those pledges, despite the fact that it's doing a lot of other things in other areas that people have concerns about. What was your other question?

Scott Moore [00:52:04] The other question was just about the common but differentiated responsibilities. But actually, I think you did touch on it a little bit, I think in some of your previous comments, and it actually links to the next set of questions. So if you don't mind, I'm just gonna go ahead and pose those as well. And they're really about kind of the U.S.-China relationship as it pertains to climate. I think one set of questions is essentially why we haven't sort of shown an ability to prioritize climate, even given tensions in other areas? You know, as you just you just started to kind of allude to. And then second, what leverage the U.S. may have, if any, over China to make its climate policies maybe more ambitious or to back off coal, coal expansion overseas, etc.?

Barbara Finamore [00:52:55] OK. So. We're in a situation right now where I don't think the U.S. has a lot of leverage over China. That was part of the reason, I think, why China went ahead and made this commitment unilaterally. China is responsible for more CO2 emissions than the U.S. and the E.U. combined. There's been some talk in the U.S. and in Europe about a carbon border tax, of taxing imports from heavily carbon emitting industries in China. In order to get there for the U.S., it needs, as I said before, to reform and reinvigorate its own climate policies. There's also issues about compliance of these carbon border taxes with the WTO. So I'm just not sure how much of a tool that's going to be. But I think we're at this point where China is moving ahead. It does react to some extent to what's being done in other countries, including in Europe most strongly these days. But a lot of the time, China has its own internal domestic reasons for moving ahead on climate. And that's what we're seeing already.

Scott Moore [00:54:28] So we have a couple of other associate, like sort of assorted questions, but I'm gonna go ahead and pose one, which I think quite presents kind of a number of different issues that maybe we can think about as we move towards wrapping up. And that's really, I guess, around whether the current structures that we have, both governance and kind of our economic systems, are fundamentally up to meeting the climate challenge? So, you know, sort of putting aside the kind of current U.S.-China dynamics and sort of what's going on in both countries, fundamentally, how much do we have to sort of perhaps rethink our entire kind of political and economic systems to really combat this threat?

Barbara Finamore [00:55:22] Yeah, it's going to require major transformation of our economic systems worldwide. And when I talk about what's needed in China, in the U.S., it's not just moving away from coal-fired power plants. We're talking about reinventing cities. Reinventing cities, designing them so that they're not so reliant on fossil fuel transportation, more reliant on public transit. How do you get there? How do you get there? You can do, you know, it's more incentives, but really, at some point it's going to require massive changes in how the economy has developed, how the economies of the world have developed, that led us to the situation that we're in today. It's also going to require, I think, a lot of changes in personal choices. We have seen this in the pandemic. There's so much less traveling for business. There's a lot of trips that are being avoided, lots of airline travel, lots of cargo shipping that's no longer needed. I hope that we can find ways to institutionalize and make those changes permanent even after the pandemic restrictions lift, because we need to not just change the technology. We need to become more efficient and find new ways to move people, to move cargo, to get work done. And how are we going to make those things last, once the restrictions of this pandemic are lifted? That's a key question.

Scott Moore [00:57:27] Thanks, Barbara. Yeah, I mean, for what it's worth, I agree with that. I think one of the things that's been quite interesting about this conversation is kind of how much we focused on the idea or maybe the hope that competition can somehow realize positive outcomes for the climate, even though I think intuitively we think that cooperation is the way to go. But maybe there's a way to kind of realize positive outcomes, even through a more competitive framing or stance, at least between the U.S. and China. One last question, and the question itself actually refers to some of these kind of tensions, it makes an interesting observation about the increasing trend towards illiberal stances on the participation of organizations like NRDC in both the U.S. and China, which is, I think, an interesting kind of point. But I'm going to pose just the question part of it, which I think is a perfect way to end. Barbara, are you planning a sequel to your book or an update to it?

Barbara Finamore [00:58:40] It really depends, I think, on whether, on how China follows through on its carbon neutral target. What is it going to put in its mid-century climate bill? What's going to be in the 14th five year plan? What are the specific details on how it needs to move forward? And then I might consider a sequel to the book. A lot of the details of what led us to the situation we're in today are still valid. But this is an exciting new development. If it's real, if it's moving ahead quickly, I think there might be room for a sequel.

Scott Moore [00:59:18] Great. Well, I think. I think we can all look forward to at least that possibility. And hopefully with a happy ending to this story. But thank you so much, Barbara, and thank you to everyone for joining us here for this conversation.

Barbara Finamore [00:59:40] Thank you for having me. It's been a wonderful opportunity to speak with you, Scott. I really enjoyed it. And I hope we'll have more opportunities in the future.

Scott Moore [00:59:49] Likewise.

Jocelyn Perry [00:59:51] Thank you both so much for those insights. It's so great to have you both here with us at Perry World House for these interesting and important conversations. And we'll certainly have you back as you write your sequel, Barbara, if not before then. Thank you all for joining us at home. And we hope to see you later this week when we'll have two more exciting events. On Thursday, we're thrilled to host an event on public service in the 21st century with one of our Visiting Fellows, Lieutenant Colonel Alexander Vindman. And on Friday, we'll discuss the effects of Hurricane Sandy for New York's resilience planning with key members of the recovery planning team from two mayoral administrations. More information on all those events and links to register are in the chat right now. As always, you can access a recording of this conversation on our YouTube channel and you can find out all about our other upcoming events by joining our mailing list or following us on social media for up-to-date information on critical contemporary global affairs and public policy issues. We'll drop links to all of those in the chat as well. And thanks all for being here with us today. Have a great day.

Barbara Finamore [01:00:51] Thank you so much.