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China sticks to 'red line' in global climate talks while pursuing green transition at home

By Stephen Minas.

The recently concluded Warsaw climate talks - the latest annual conference of parties to the UN climate change convention - were in several respects unusual. The meeting was held in Warsaw's National Stadium, prompting an inevitable flurry of football clichés from participants and reporters (with diplomatic 'own goals', activists brandishing red cards and the talks predictably running into 'extra time'). The Polish government enraged environmental NGOs by simultaneously hosting an 'International Coal and Climate Summit' with the World Coal Association. And as the conference neared its conclusion, the Polish government announced that the conference's president, Marcin Korolec, would be sacked from his position as Poland's environment minister ('I'll be able to fully concentrate on the process of climate negotiations', Korolec gamely assured delegates).

The conference saw significant agreements on a number of fronts. These included a long-awaited deal on reducing greenhouse gas emissions from deforestation and an agreement to create a new mechanism to address loss and damage suffered by developing countries that are particularly vulnerable to climate change.

However, delegations left Warsaw with longstanding divisions unresolved on fundamental questions of finance for climate change mitigation and adaptation and the respective responsibilities of developed and developing countries. On both issues, developed countries such as the United States and major emerging economies including China remained at odds, as governments face a self-imposed 2015 deadline for the agreement of a new global climate deal.

On finance, China set the tone in its opening statement by calling for a roadmap to the $100 billion per year by 2020 in climate finance for developing countries first pledged by developed countries at the Copenhagen summit in 2009. China was speaking for the BASIC countries, the negotiating group of Brazil, South Africa, India and China that has worked together since 2009. But a proposal by developing countries for climate funding to reach 'at least $70 billion' a year by 2016 was rejected by wealthy nations. Instead, the agreed text merely 'urges' developed countries to provide climate finance out of public funds 'at increasing levels' in the run-up to 2020.

'In the end, what they did is just painting a pie', claimed Chinese delegation head Xie Zhenhua of the outcome. The central question of who will pay for climate mitigation and adaptation has long stoked distrust and sometimes incendiary recriminations among national delegations. This year's meeting heard developing country complaints about a lack of funds in the Green Climate Fund that governments had previously agreed to set up to support developing countries and which opened its doors in Songdo, South Korea on Wednesday (4th December 2013).

On the respective responsibilities of developed and developing countries, Warsaw proved a reminder that consensus remained elusive despite earlier compromises. The 1992 climate convention includes the principle of 'common but differentiated responsibilities and respective capabilities' (CBDR), which places a greater onus on industrialised nations (annex 1) than on developing nations (non-annex 1) to respond to climate change.

This division of labour between developed and developing countries has emerged as a 'red line' issue in the negotiations to develop a new global deal. China and other developing nations have repeatedly insisted that the 2015 agreement must be faithful to the CBDR principle. The United States, however, has dismissed as 'unacceptable' using 'fixed, 1992 categories to determine who is expected to do what in a new agreement taking effect nearly 30 years later'. US climate envoy Todd Stern recently stated that the annex 1 and non-annex 1 categories 'cannot have an operational role of defining obligations and expectations' in any new deal.

At Warsaw, the BASIC group and other developing countries objected to a draft decision which invited 'all Parties to initiate or intensify domestic preparations for their intended nationally determined commitments' ahead of 2015. Chinese negotiator Su Wei asserted that 'only developed countries should have commitments'. This prompted Stern to complain that he felt he was 'going back into a time warp … I think most of us understood we did something quite different when we signed up to the Durban Platform'. Stern went on to remind delegates that the Durban mandate for 'some kind of legal agreement – an outcome with legal force' was 'applicable to all parties'. But the phrase 'outcome with legal force' was only added to the 2011 Durban agreement after India baulked at committing to the more precise 'protocol or legal instrument'. Similarly, at Warsaw 'commitments' was dropped in favour of the broader 'contributions, without prejudice to the legal nature of the contributions'.

Where the fault line of CBDR is concerned, the language that all parties can agree to is language that is open to different interpretations, which are then thrashed out in subsequent negotiating rounds. As Xie Zhenhua told the Xinhua news agency, the interpretation of 'contributions' could itself be expected to become a point for negotiation. According to Xie, 'contributions' could refer to either developed country 'commitments' or developing country 'actions', potentially leaving the distinction between the two intact. He added, referring to the Warsaw agreements on 'contributions', finance and loss and damage: 'On the surface, the three issues are all solved, but in substance, they are not'.

The end of the Warsaw meeting came as a new UN Environment Programme (UNEP) report provided a snapshot of China's renewables and environmental sectors. The study, co-sponsored by China's Ministry of Environmental Protection, reports 'significant progress' in the development of renewable energy and the 'greening' of industry in China. The paper credits China with a 'strong policy framework to support a green economy transition', citing carbon intensity targeting, feed-in tariffs and stricter environmental regulations. It also acknowledges major Chinese investment in renewables and energy efficiency, including as part of the $570 billion stimulus package in response to the global financial crisis. In 2012, China led the world with an estimated $67.7 billion of investment in renewable energy.

However, the report also details the scale of the challenge China faces if it is to further develop its renewables sector. It warns that '[a]cross every sector studied, a technology gap between Chinese firms and their industrialised-world competitors exists'. For example, even though China has rapidly become the world's leading solar PV manufacturer, the report concludes that China is 'a follower, not a leader, in the technology of the solar sector'. The paper calls on the government to further support 'domestic innovation' and investment in R&D, including with tax breaks and stronger intellectual property protections.

China is continuing to roll out its domestic climate policies. Last week, pilot carbon trading exchanges opened in Beijing and Shanghai, joining an existing exchange in Shenzhen. Further pilot schemes are set to open in other cities and provinces. Zou Ji, deputy director of China's National Centre for Climate Change Strategy (and a facilitator of the Warsaw conference's expert dialogue) offered an insight into China's overall approach when he recently told the New York Times: 'we expect more emission reductions from developed countries while we have new innovative development pathways for emerging economies'.

China is already the world's largest greenhouse gas emitter. Recently, its per capita emissions equalled those of the EU. Even so, further fault lines lie ahead. 'Our emissions are different from yours', maintained Xie Zhenhua, referring to developed countries. 'Ours are produced in the process of industrialization while you are already in the post-industrialization era'.