3 Things Americans Should Know About China in the Paris Climate Agreement

Chinese President Xi Jinping steps out from behind China's flag as he takes his position for a news conference in the Rose Garden of the White House in Washington.

The Trump administration has signaled an intent to reassess U.S. participation in the Paris climate agreement. No administration should backtrack on a complex global agreement without carefully weighing how it would affect American interests. With respect to the Paris Agreement and the global climate effort, the new administration must understand how U.S. participation, or lack thereof, influences China—the world’s biggest greenhouse gas emitter—and Chinese behavior.

Here are three things the Trump administration—and the American citizens who will judge how its actions affect our national interests—need to know about China in the Paris climate agreement.

China is looking to dominate energy innovation and clean energy exports

China’s most aggressive Paris commitment is its promise to double the nonfossil fuel portion of its energy mix. That commitment requires China to build and install 800 gigawatts to 1,000 gigawatts of new wind, solar, nuclear, and other renewable energy generation facilities by 2030. To put this in perspective, total U.S. electricity generation capacity is just more than 1,000 gigawatts. China has committed to build a renewables-only system that is equivalent to the entire U.S. electricity system by 2030. This nonfossil fuel target is the deepest hook in China’s Paris commitments. It is already creating massive demand for new clean energy technologies in China and, with that demand, new growth opportunities for Chinese businesses.

Skeptics claim that China is unlikely to meet its 2030 targets because, in their view, decarbonization inhibits economic growth. The reality is that decarbonization shifts production away from outdated, resource-intensive industries toward more innovative and efficient industries, and that is exactly where Chinese leaders want their country to go. Beijing wants to move its citizens out of the coal mines and into the labs. It is doing so through a combination of policy incentives—shifting support from coal to clean energy—and administrative mandates.

Most of the skeptics who doubt that China will meet its Paris targets are clearly not familiar with China’s current economic situation. They assume that China will stick with coal because that worked well in the 1980s and 1990s. However, anyone who spends significant time in China knows Beijing has no desire to fight today’s battles with yesterday’s technology. From Beijing’s perspective, shifting toward clean energy is a growth solution, not a barrier. That is why China spent the equivalent of $3.8 billion on clean energy research and development in 2015 and plans to invest another $361 billion in renewable generation through 2020. That is why Beijing is ordering the nation’s coal companies to cut 1.3 million jobs over the next five years. Some of those workers will find jobs in the clean energy sector, which Beijing expects to generate more than 13 million jobs by 2020.

China has long viewed clean energy as its big opportunity to finally dominate a global technology sector. In information and communication technology, the United States has a strong lead on innovation, and China has struggled to catch up. Clean energy is a newer growth sector in which the U.S. lead is more tenuous.

What Beijing really wants is for the next generation of energy technologies to come from China. Nearly 200 nations signed Paris commitments, and all of those nations will need new clean energy technologies to fulfill those commitments. Beijing wants to make and export these technologies, and if U.S. clean energy sectors hit a lull, that will, in effect, hand that goal to Beijing on a platter.

The advantage of clean energy is that it’s free energy. Once wind and solar plants are installed, the user does not have to pay supply costs and the resource does not diminish over time. Coal, oil, and gas supplies are not free. They often require massive transportation costs on top of commodity production costs, and they do diminish over time. This is why, at the global level, installed renewable capacity has now surpassed installed coal capacity.

Clean energy is a massive global growth market. If the United States leans back at the same time that the rest of the world is ramping up to meet Paris targets, the world will be buying Chinese technology instead of American. That is something the Trump administration—and American workers—should think about very carefully.

China’s coal sector is hoping the Trump administration will give Beijing an excuse to slow-walk emissions reductions

What the Trump administration needs to understand is that China can dominate clean energy markets and underperform on emissions reductions at the same time.

China has committed to peak carbon emissions around 2030. Whether China meets that target is not the issue: Beijing will pull that off. The real issue is whether China manages to peak early and what its emission trajectory looks like after the peak. There are two trajectories China could take. Ideally, China’s emissions will peak before 2030 and then enter a sustained decline. Alternatively, if Beijing takes a less ambitious approach on its emissions reduction policies, China’s emissions could peak around 2030 and then plateau.

The problem is that, behind the scenes, China’s coal companies and coal-dependent provinces are already using Trump administration rhetoric on climate change to press Beijing to move toward the second scenario. The Center for American Progress visited Beijing in December 2016 to interview Chinese climate experts about those debates. We discovered that just as fossil fuel interests in the United States use Chinese emissions as an excuse to push back against climate policies in this nation, China’s fossil fuel interests are hoping the United States will backtrack on Paris so they can use that as an excuse to slow things down on their side.

China will meet its first round of Paris targets, but the United States—when it has its own ducks in a row—can shape the trajectory of Chinese emissions going forward. That matters for U.S. national interests, particularly in states such as Florida and Louisiana, where rising sea levels are already forcing Americans to abandon their homes.

Backtracking on Paris would squander U.S. leverage over China at a time when Beijing is making policy decisions that will affect global emissions for decades to come. That is something the Trump administration should weigh very carefully.

If the United States is not at the table, China could push the Paris process in a direction that makes it easier for developing nations to under-deliver

During the Paris negotiations, the United States pushed China and other developing nations to move away from the old Kyoto Protocol framework that had one set of rules for developed nations and a different—more lenient—set of rules for developing nations. Unlike the Kyoto Protocol, the Paris Agreement calls on all nations to do their fair share. Some aspects of the agreement’s implementation are still being negotiated, however, and if the United States drops out of the process or goes silent, China could join forces with India—the third-largest country greenhouse gas emitter—to steer the process back toward a bifurcated system.

Without the United States at the table, transparency could be the first pillar to fall. In Paris, world leaders agreed to establish a robust transparency mechanism, but the details are now being negotiated. China and India have both argued for a bifurcated system with more lenient reporting and transparency rules for developing nations. The United States, in contrast, has pushed for strong, common standards that would apply to all, thus requiring China to provide high-quality data that international observers could use to make sure China meets its commitments.

If Trump administration officials have doubts about China’s ability to meet its climate commitments, they should use the ongoing transparency negotiations to push for a strong oversight regime that will hold China to account. This administration claims to be made up of deal-makers. If so, it should be able to get a good deal on transparency. The United States already meets high transparency standards, so America has nothing to lose and everything to gain from pushing other nations to do the same. The benefits would extend beyond the climate realm. If China is providing high-quality data across its range of Paris targets—some of which have a strong tie-in to gross domestic product—that will give U.S. observers new metrics for assessing China’s economic performance and forecasting potential shifts that could affect the United States.

In contrast, backtracking on the Paris Agreement would amount to throwing in the cards before playing a single round. For a president who claims to be tough on China, that would be quite a fold.

Trump administration officials like to talk tough on China, but American citizens will judge this administration based on results, not rhetoric. Here at home, meeting its own Paris targets will help the United States sharpen its competitive edge in advanced energy technology and innovation instead of ceding this massive global market to China. On the international front, staying engaged in the Paris Agreement will enable the United States to shape policy implementation in China and around the world. The U.S. business community understands this. Hopefully, the new administration will as well.

Melanie Hart is a Senior Fellow and Director of China Policy at the Center for American Progress.