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Donald Trump cedes climate policy mantle to Xi Jinping with Paris deal exit

LiveMint logoLiveMint 02-06-2017 David Tweed

Hong Kong: President Donald Trump’s decision to quit the Paris accord has just handed China’s President Xi Jinping a golden opportunity to burnish his country’s image as a clean-energy innovator and global leader in the drive to avoid possible future catastrophic climate change.

Trump’s move to pull the US out of the almost 200-nation deal, which risks undermining the commitment of other countries to limit fossil-fuel emissions, has drawn sharp criticism from key American allies across Europe and Asia. But Trump, in a speech on Thursday at the White House, said the accord undermined US interests, sent taxpayer money abroad and didn’t require enough from other nations, singling out China and India.

“This agreement is less about the climate and more about other countries gaining a financial advantage over the US,” Trump said, making good on a campaign pledge last year to “cancel” participation in the agreement. The landmark deal sealed in 2015 brought together the US and European Union, as well as big developing nations like China, India and Brazil, in pledging limits on fossil-fuel pollution and funds to help poorer countries adapt to climate change.

With the decision, the US is now deeply isolated on climate change policy. It joins Syria and Nicaragua outside the Paris consensus, which includes governments as divergent as Saudi Arabia and North Korea.

Xi has been quick to capitalize on the public-relations opportunities afforded by Trump’s “America First” doctrine since his election. The Chinese president used the Davos forum of global business and political elites in January to enhance his country’s credentials as a bastion of free trade in contrast to Trump’s protectionism.

‘Open goal’

The US leader’s “Make America Great Again” rhetoric has done little to counter Xi’s message — on full display at the Belt and Road Forum in Beijing in May — that it is China, not the US, that leads the world when it comes to vision on everything from the global economic order to saving the world.

“This is an open goal for China to step up and be the most responsible global leader on the planet and do so in a way that is not threatening to anyone,” said Nick Bisley, a professor of international relations at La Trobe University in Melbourne. “You can bet your bottom dollar that China is going to present itself as a pioneering leader.”

The praise China is winning with its “guardian-of-the-rules-based-order” messaging may help mask the country’s habit of flouting that very order when the rules don’t suit its goals.

Mixed record

Beijing last year earned widespread condemnation when it ignored an international tribunal ruling — made under a global convention to which China is a signatory — that its claims to almost all of the South China Sea have no legal standing. In Hong Kong, its persistent encroachments on the city’s autonomy prompt regular outcries that it has breached a treaty signed with the UK.

“This situation should do a lot to ease the pressure on China to ‘behave well’ as a rising power,” Zhang Baohui, director of the Center for Asian Pacific Studies at Lingnan University in Hong Kong, said in an email. “Now, it is the U.S. that looks like a revisionist power. China, on the other hand, due to its increasing efforts to play a leadership role in world affairs, will be now viewed positively, especially among the Europeans.”

The US-European trans-Atlantic bond is already under pressure after Trump’s visit to European capitals last month. In the aftermath of his blustery diplomacy on trade and security, Chancellor Angela Merkel said that ties that have underpinned German foreign policy since World War II are “to some extent” less dependable.

Pollution costs

Trump’s response came in a tweet: “We have a MASSIVE trade deficit with Germany, plus they pay FAR LESS than they should on NATO & military.”

China has already established itself as a climate-change leader when it comes to its world-class environmental problem, an issue considered politically existential by the Chinese Communist Party. The pollution that now chokes the country’s rivers and air — forcing its population to regularly don filter masks and keep their children home from school — is a result of breakneck economic growth promoted for decades by Beijing.

Ministry of Foreign Affairs spokeswoman Hua Chunying said in a Thursday briefing in Beijing that while China communicates regularly with the US on topics including climate change, its support for the Paris accord derives from its own interests.

“No matter how other countries’ positions change, we will continue to uphold green, sustainable and innovative development,” Hua said.

Green investments

China has been the world’s biggest clean-energy investor since 2012. In 2016, it spent $88 billion on clean sources of energy such as wind and solar power, accounting for about one third of renewables investment globally. According to data compiled by Bloomberg New Energy Finance, China invested $17.9 billion in new clean energy projects in the first quarter, compared with $4.1 billion in Japan and $9.4 billion in the US.

In 2016, China was the primary driver of the green bond market, accounting for $27 billion in new issuance, data compiled by BNEF show. Based on current rates of issuance, the green bond market is expected to grow to $103 billion in 2017, compared with under $4.7 billion in 2012, according to BNEF.

China, which in 2015 sold less than $1 billion of the debt whose proceeds are earmarked for environmental projects, is accelerating regulation to channel funds toward reducing pollution, Moody’s Investors Service said in a recent report.

After a meeting in May with Barbara Hendricks, Germany’s environment minister, China’s Special Representative on Climate Change Xie Zhenhua reaffirmed his country’s goal of reducing energy use per unit of gross domestic product by 18%, and raising the proportion of non-fossil energy in primary energy consumption to 15 percent, from 2016 to 2020.

Immense damage

“This presents a very good opportunity for China to step up and assume further international leadership,” said Li Shuo, an adviser at Greenpeace East Asia. “China is the most predictable of the main actors because its policies are the result of a domestic reform agenda. It is driven, for example, by concerns about domestic air pollution.” Even so, the full impact of Trump’s decision will hinge on the details, he said.

The US president tried to counter some of the criticism of his move, saying the Paris accord was too easy on China, allowing it to continue building coal plants and increasing their emissions of heat-trapping gases. And he added he’d be willing to negotiate a new accord.

“We will start to negotiate, and we will see if we can make a deal that’s fair,” Trump said. “And if we can, that’s great. And if we can’t, that’s fine.”

Trump’s Paris accord exit comes with downsides. Like any other nation, climate change represents a major security and economic challenge for China, and the decision by the US may put the entire deal at risk, making it almost impossible and extremely expensive to stop.

“The practical and other challenges that the US withdrawing from Paris pose to China, Europe and everybody else probably far outweigh any sort of rhetorical gain in China soft power,” said Tim Summers, senior consulting fellow on Asia at Chatham House in Hong Kong. “Any benefit they get from saying ‘we are being good on this, unlike the Americans’ is not really going to take them very far in reality.”

Still, Trump’s decision does emphasize how much the global order has changed, and the extent of the opportunity for China to step up, according to Bisley at La Trobe University. “Who would have thought that on questions of world leadership where you have the US as exhibit A and China as exhibit B, that it would be the US that exits stage left.” Bloomberg

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