The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.

This is a shortened version of an article originally published by the Rajaratnam School of International Studies (RSIS), Nanyang Technological University on June 14, 2017.

PRESIDENT Donald Trump’s protectionist rhetoric and promises to roll back his predecessor’s environmental policies have translated into reality.

He declared on June 1 that the United States would withdraw from the Paris Agreement on Climate Change.

This surprised nobody but has worried deeply the global community, nonetheless, about what this means for the future of global climate governance.

Beyond the political symbolism of Trump’s announcement, however, the short- and longer-term impacts may be marginal as many US federal states and energy companies will continue expanding renewable energy in the US mix, and insist on restrictive environmental regulations.

Moreover, a withdrawal from the Paris agreement can only enter into force after November 2020, when the next US presidential election takes place.

Internationally, most countries will not withdraw from the Paris agreement.

But Trump’s announcement may contribute to a US self-isolation and a geopolitical shift by strengthening China. Many governments and environmental groups will blame the US president for upsetting global climate mitigation policies, and giving up its enshrined target of global warming to increase not more than 2°C.

The US withdrawal from its leadership role in global climate protection policies comes at a critical time as worldwide clean energy investments decline from a record high of US$348 billion (RM1.5 trillion) in 2015, to just US$287.5 billion last year (the solar power sector saw a 64 per cent decrease in investments).

To make matters urgent, global surface temperatures have also reached a record high last year (nearly 1°C higher than in the mid-20th century).

The political vacuum left by Washington appears to have been filled by Beijing. China has emerged as a main defender of the Paris climate agreement.

President Xi Jinping used the last World Economic Forum in Davos, Switzerland, in January to fill the leadership role left by the Trump administration.

Xi presented China as the new guardian of the world’s free trade and rescuer of the world’s climate protection policies.

China has made, undeniably, huge efforts to reduce the role of fossil fuel in its energy supply. It has dramatically expanded investments in renewable energy for economic, environmental and energy security reasons.

It has become the world leader in production of solar panels and batteries. Last year, its combined new electricity generation from hydro, wind and solar power came to 153TWh, surpassing the growth in fossil fuel generation (111 TWh).

It nearly equalled Germany’s total generation of renewable energy (186TWh). By investing US$103 billion in 2015 (compared with just US$44 billion in the US), its electricity generation from renewable sources rose to 25 per cent of its consumption. 

China has also bolstered its dominant position in the global renewable energy industry by increasing its foreign investments in clean energy to more than US$32 billion in 2015.

But China’s overall objective for expanding overseas investments is to create new markets for its exports. Last January, Beijing announced that it would spend more than US$360 billion on its renewable energy sector, which it expects to create more than 13 million jobs.

The expansion of these overseas investments is linked to shrinking opportunities in its home market, forcing Chinese companies to expand abroad to make profits, create jobs and becoming world champions in their industry sectors.

These industrial and economic policies are also part and a pre-condition of China’s geopolitical ambition to rise to its ancient role of a “Middle Kingdom”.

If so, this will weaken the US as well as other potential rivals, and replace the existing global order.

Thus, foreign investment strategies, including energy sectors, are part of Beijing’s “One Belt, One Road” strategy — now known as the Belt and Road Initiative (BRI) — as well as its long-term geopolitical and geo-economic interests.

Accordingly, those expanding investments are not restricted only to renewable energy and other “green technologies”.

China is also the world’s largest investor in coal mining and power projects. Currently, it is financing and building around 85 coal-powered plants worldwide.

It is even doing so in Europe (in Serbia and in Bosnia-Herzegovina), raising concerns in the European Union that these newly-built plants may not comply with the EU’s Industrial Emissions Directive.

China’s proposal to build an Asian “supergrid” will also allow it to export coal-fired power to nearby countries under the BRI.

While these investments move emissions out of China, helping the country to reduce its national carbon dioxide emission and decrease air pollution, they may add more emission on a global scale as the environmental standards in most of the poorer neighbouring countries are lower than those in China.

Beijing’s overseas coal investments serve its domestic energy policies and economic growth concept, as well as its strategic and foreign policy objectives.

Its industrial overcapacity and economic transformation, as well as the reduction of coal consumption domestically, have increased the pressure on China’s coal industry to expand overseas.

Even its coal policies for the domestic market are much more ambivalent than portrayed.

In January, Beijing halted more than 100 coal-fired projects (even those which were already under construction) with a combined installed capacity of more than 100GW. However, that decision was made to curb overcapacity.

Another reason was to increase the coal industry’s efficiency as well as to decrease air pollution at home rather than strengthening its commitment in light of the Paris agreement, and for the sake of worldwide climate protection.

In contrast to previous years, China’s coal imports have increased since the beginning of last year, making it the world’s largest importer of the fuel.

Again, Beijing appears rather to favour a strategy of exporting emissions to other countries (also known as “carbon leakage”).

Given China’s slowing growth and mounting economic problems, it remains to be seen whether Beijing will really sacrifice growth or its overall political stability to meet international climate obligations.

In contrast to its efforts in fighting air pollution, China’s global obligation to reducing carbon dioxide emission is not a topic of wide concern domestically.

As long as China is not willing to sacrifice national interests for global public good and interests, it remains questionable whether a Chinese leadership role replacing the US and Europe in global climate protection policies is really in the long-term strategic interest of the world. 

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FRANK UMBACH is a visiting senior fellow at the S. Rajaratnam School of International Studies (RSIS), Nanyang Technological University. He is research director at the European Centre for Energy and Resource Security (Eucers) at King’s College, London, and senior associate at the Centre for European Security Strategies (CESS GmbH) in Munich, Germany. He was previously a co-chair of CSCAP.

The statements, opinions and data contained in the content published in Global Gas Perspectives are solely those of the individual authors and contributors and not of the publisher and the editor(s) of Natural Gas World.