December 13, 2023 by Li Shuo Incoming China Climate Hub Director

China’s performance at COP28 sheds light on both its climate trajectory and the future of global climate politics. COP28 focused on the critical issue of fossil fuels, a topic in which China has much at stake. Three important observations emerge as the dust settles in Dubai — each with significance for the global climate community and the future of U.S.-China engagement.

The Role of the Sunnylands Statement

The U.S.-China Sunnylands statement, issued weeks ahead of COP28, played a role in stabilizing tensions ahead of the United Nations climate summit. The summit in Dubai reaffirmed the view that the U.S.-China climate agreements in recent years are different from the ones produced during the Obama-Xi period. The obvious reason is that the bilateral relationship has deteriorated, limiting agreement between the two sides.

A less well understood dynamic is that China itself has changed significantly compared to a decade ago. After years of high growth, China’s economy is slowing down. Its emissions will peak and likely decline within this decade. If not yet similar to developed countries, China’s emission profile is beginning to look far less like other developing countries such as India.

Additionally, the Sunnylands statement — while comprehensive — only covers a limited set of issues addressed at the multilateral level. For example, the statement does not have reference to the long-term trajectory of fossil fuel (the eye-catching COP28 debate on “phase out” of fossil fuel, which eventually landed on the phrase “transition away”).

In sum, while the Sunnylands agreement may be seen as a low bar for the United States, it is not so for much of the global south. The agreement also does not provide all the answers that the COP endeavors to address. All of these factors underline the need for a nuanced understanding of what a U.S.-China agreement can and can no longer do to help the multilateral process.

China’s Absence in the Global Renewables and Energy Efficiency Pledge

A frequently asked question at COP28 is why, given China’s leading role in clean technology deployment, did it not sign the Global Renewables and Energy Efficiency Pledge (the Pledge). The Pledge is a high-profile, voluntary declaration that commits countries to triple renewable energy capacity to at least 11,000 GW by 2030 and double the global average annual rate of energy efficiency improvements from around 2% to over 4% every year until 2030.

The answer lies in three considerations. First, Beijing is generally reluctant to sign side declarations and initiatives at the COP. This reluctance is based on China’s skepticism of the accountability of these side deals (most of them carry ambitious aspirations but fall short in implementation), and the view that the United Nations Framework Convention on Climate Change (UNFCCC), the party-driven multilateral decision-making process, should remain the central platform for decision making. Some of the side declarations at previous COPs also cut across the jurisdiction of multiple Chinese ministries, resulting in cumbersome approval processes not compatible with the high pace at the COP.

Second and ironically, China may face challenges in meeting the targets outlined in the Pledge because of its incumbent leading position. While analysts are highly confident in China’s ability to triple renewable energy capacity, there are two caveats to consider. If renewable energy is limited to only wind and solar, China will see rapid growth. However, the potential for further hydro and geothermal power growth, traditionally the largest low-carbon power capacity, is very limited. Base year, which is unspecified in the Pledge, is also important. China could triple its wind and solar capacity by 2030 based on 2022 data. However, if the base year is set for 2023, it is unlikely to happen. This is because of the astronomical renewable energy growth this year.

Meanwhile, most analysts doubt China can achieve a 4% annual energy efficiency improvement. Many of the low-hanging fruits in efficiency improvement have been harvested. China’s recent economic slowdown also brings uncertainty to continued energy efficiency improvement.

Many point out that the “global” and “collective” nature of the Pledge does not require China to fulfill the tripling of renewable energy capacity and doubling of energy efficiency as an individual country. While that argument is valid, Chinese bureaucratic culture stands for hesitancy toward the liability of unfulfilled commitments. The reported last-minute insertion of coal language in the Pledge was also unacceptable for China.

Third, the Pledge was mirrored in the COP28 decision. China did not object to it, underlining the subtle difference between not opposing and actively supporting. Beijing is diplomatically more comfortable with the former.

Putting aside the domestic and international considerations of the Pledge, BloombergNEF analysis suggests China is the only country among major energy consumers that can deliver on the target of tripling renewable energy capacity. In this regard, China’s absence in the Pledge highlights increasing tensions in the UNFCCC between over-promise and under-deliver and under-promise and over-deliver.

Significant heavy lifting is still required though for China to get closer to doubling its energy efficiency. This would involve not only a structural shift of its power system but also its overall economy.

China’s Domestic Energy Transition and COP28 Outcome

COP28 provides insights into China’s energy planning as its endgame was a test of countries’ willingness to move beyond the status quo.

There are new signals from China, but much like most of the other major energy consumers, no decisive moves. China’s Climate Envoy Xie Zhenhua advised during a COP side event that in 2025, China will communicate new targets and policy measures for its 2030 and 2035 nationally determined contributions (NDCs). The strategic ambiguity could be interpreted in two somewhat contradicting ways. First, it could be seen as closing the possibility of further adjustment to the 2030 headline targets. Second, it leaves open potential new ambition in China’s 2030 targets, even though it’s not clear whether it is the 2030 “targets” or “policy measures” that will be adjusted. At a press conference, Xie also said that China will clarify when and at what level it will peak emissions.

China’s COP28 position also confirms that there is no new mandate on its domestic coal development. In the final days of COP28, the decision related to coal has seen several iterations. The final decision “calls on” parties to contribute to global efforts in “accelerating efforts towards the phase-down of unabated coal power” (paragraph 28b, FCCC/PA/CMA/2023/L.17). It did not address permitting new fossil fuel power generation capacity.

Another provision sensitive to China is related to global peaking before 2025. The decision fall short from requesting the global community to peak soon. Instead, it only “recognizes” the projection for global emissions to “peak between 2020 and at the latest before 2025 in global modeled pathways” to limit warming to 1.5 °C without overshoot, and “notes that this does not imply peaking in all countries within this time frame.”

Overall, early peaking and reducing the reliance on coal remain sensitive issues that China guards against. For further progress, these issues would require significant efforts at the domestic level and international climate talks.