By Liu Yi, research assistant and analyst of Industrial Bank Co., Tang Weiqi, research analyst of Industrial Bank Co. and Lu Zhengwei, chief economist of Industrial Bank Co.

Abstract:

l  On July 7-8, 2017, the G20 Summit was held in Hamburg, Germany. Except the US, the other 19 participants agreed to stick with the Paris Agreement, providing necessary confidence for the international community to further develop and implement the global climate governance;

l  The Summit also issued the G20 Hamburg Climate and Energy Action Plan for Growth to clarify the specific measures for performing the climate governance responsibility and driving energy transition. It proposed to promote the establishment of a global green finance system, which will play an important role for implementing the governance of global climate and sustainable development in the future;

l  The U.S. withdrawal from the Paris Agreement provides China with a rare opportunity to have more say and enhance its influence in the future international negotiations regarding climate change. It is expected that, via the Belt and Road Initiative, China can play an active role in promoting its advanced concept and practical experience of pushing forward green development and responding to climate change during the international negotiations on climate change.

Keywords: G20, Paris Agreement, sustainable development, international cooperation

The G20 Summit was held in Hamburg, Germany July 7-8, 2017. At this Summit, the leaders of the G20 had in-depth discussions and exchanges on the topics such as how to promote global economic growth, drive free trade and investment and implement the commitments and actions regarding climate change. As the US President Trump declared the withdrawal from the Paris Agreement on June 1, the role played by the US in the future global response to climate change, the influence exerted thereby and whether the attitudes and standpoints of other G20 members will change or not all became the focal topics of the summit.

Through two days of talks, the summit officially released the G20 Leaders’ Declaration on July 8. The Declaration shows that although the pressure from the international community didn’t make the U.S. change its decision, the other 19 members all reached consensus on the issue of performing the Paris Agreement.

Just as the G20 Leaders’ Declaration states, the international cooperation on climate change represented by the Paris Agreement is irreversible. The “19 against 1” outcome on climate change also shows that the determination and consensus of the international community in response to climate change and in promoting international cooperation hasn’t been affected by the U.S. withdrawal from the Paris Agreement. Even so, the constantly changing attitude of the U.S. toward its climate policies still hinder in some way the global cooperation on climate change, increasing the difficulty and urgency of the global response to climate change in the future further highlighting the guiding role of China, Europe and other economies.

I. Consensus on global climate action unaffected by the US

Due to the objection by the U.S. Trump Administration, the G20 Summit fails to reach a complete consensus on such topics as whether to perform the Paris Agreement and implement the global climate cooperation. In the G20 Leaders’ Declaration, the other 19 members except the US promised to stick to the Paris Agreement and will take a series of actions to promote the global climate governance. However, the U.S. decided to withdraw from the Paris Agreement but stated that it would endeavor to work closely with other countries to help them access and use fossil fuels more cleanly and efficiently. Such standpoint verifies Trump’s supportive attitude to oil, natural gas and other traditional fossil energies in his “America First Energy Plan.” The other members expressed their objection to such standpoint, and as a result, on the issue of climate change, the declaration shows that “the U.S. standpoint is only its own standpoint and doesn’t represent the standpoint of other countries”.

The international community expressed its disappointment with respect to the “19 against 1” outcome as formed on the issue of climate change at the G20 Summit. But from the series of statements and policies made by the Trump Administration before and after he took office with respect to climate change, the results of the talks on climate change were also as expected. On June 1 this year, the Trump Administration declared that the U.S. officially withdrew from the Paris Agreement and it is almost impossible that the policy could be “reversed” within one month. Therefore, the current results have actually been the best results that can be predicted. Production and consumption giants of fossil energy, such as Saudi Arabia and Russia, didn’t take advantage of the opportunity of the US withdrawal from the Paris Agreement to join the ranks of opposing climate governance as the international community had been worried about before. Instead, in the declaration, the members reaffirmed their strong commitment to the Paris Agreement, believing that the Paris Agreement is irreversible and deciding to fully implement their obligations as soon as possible. 

This G20 Summit, which was held one month after the US declared to withdraw from the Paris Agreement, can be seen as a test for the international community in response to climate change. The result seemed to be quite good. The members have further unified their understanding and reinforced consensus on the issue of climate change. Although the U.S. didn’t agree on the Paris Agreement, in the joint declaration, the governments of different countries including the U.S. promised to gradually transit to the “clean energy system with low greenhouse gas emissions,” providing necessary confidence for the international community to further develop and implement the global climate governance.

II. Exchange Action and Implementation of Global Climate Governance

Besides the joint declaration, the summit has given birth to another important fruit regarding climate change, which is G20 Hamburg Climate and Energy Action Plan for Growth released as an annex to the G20 Leaders Declaration. The action plan sets out the specific measures for the G20 members to perform climate governance responsibility and promote energy transition.

The other 19 members except the U.S. unanimously decided to put the action plan in the list of achievements of the summit. The main achievements set out in the action plan include:

l  Continuing the commitment of promoting the global energy transition by 2050, i.e. forming the energy system with zero greenhouse gas emission in 2050 under the framework of the Paris Agreement;

l  Emphasizing that all members should formulate and submit a long-term low greenhouse gas development strategy (LTS) by 2020, promoting and guiding the formulation of relevant plans, design of policy mechanism, the mainstreaming of climate actions, investment incentive and technical innovation within different members;

l  Promising to implement the current and future Nationally Determined Contributions (NDCs) in line with the Paris Agreement, and increasing cooperation with underdeveloped countries’ NDC formulation;

l  Promising to take definite actions to create an enabling environment that is conducive to increasing public and private capital investments according to the recommendations of the Green Finance Study Group and the Task Force on Climate-related Financial Disclosures and in line with the goals of the Paris Agreement;

l  Creating a “Global Partnership for Climate and Disaster Risk Finance and Insurance Solutions” to address the situation where the poverty-stricken and vulnerable groups lack protection in the face of disaster risks and impacts caused by climate change.

The action plan is an action program further proposed by the G20 members on the basis of the Paris Agreement. It not only reiterates the honor of the members’ NDC commitments, but also further specifies two important implementation mechanisms: first, constructing the system and mechanism arrangements that support green and sustainable development by developing green finance and promoting the cooperation among members in the financial market; second, building the capital support and insurance mechanism for climate risks. The two issues, which have been put forward in the Paris Agreement, are the specific implementation of the market-oriented and “bottom-up” governance mechanism, as well as the continuation of the proposal of “building a green finance system” proposed at the 2016 G20 Hangzhou Summit. Under the framework of G20, to further promote the establishment of the global green finance system will be an important mechanism and play an important role for the future implementation of global climate and sustainable development governance.

III. Global climate action calling for new bellwether

The end of the G20 Hamburg Summit means that, in the future response to climate change, the U.S. will not act as the leader and the international community needs another country to stand out and continue to well play the role of “bellwether” in place of the U.S. Although the international community reiterated the supportive attitude to the Paris Agreement, against the background of the U.S. declaring its withdrawal and giving up its capital subsidies for the global response to climate change, how to offset the negative effects of the U.S. withdrawal on weakening the determination of the global response to climate change, how to solve the problem of the financial gap appearing in response to climate change after the U.S. withdrawal and how to maximally ensure that the future support of the U.S. for fossil energy would not weaken the other countries’ contributions to tackling climate change and realizing energy saving and emissions reduction—all these are the important preconditions for ensuring whether the Paris Agreement can maintain in full force and all countries can continuously be devoted to tackling climate change and performing the commitments in the Paris Agreement.

The U.S. withdrawal from the Paris Agreement provides China with a rare opportunity to have more say and to increase its influence in the future international negotiations on climate change. As the largest developing country, China, which features complex climate conditions and vulnerable ecological environment, is also one of the countries that are most liable to the adverse impact of climate change. But for many years, China has made remarkable achievements in response to climate change by promoting the concept of green development, building the green finance system, gradually implementing the “green transition” of the economic and industrial structures, optimizing the energy structure, enhancing energy saving and efficiency, carrying out the low-carbon pilots and demonstrations of various forms and establishing the carbon emission right trading market.

In the future, against the background of the U.S. withdrawal from the Paris Agreement on climate change, it is expected that that, by relying on the Belt and Road Initiative, China can actively promote and publicize its advanced concepts and practical experience of driving green development and responding to climate change during the international negotiations on climate change.

On May 14, 2017, President Xi Jinping, in his keynote speech delivered at the opening ceremony of the Belt and Road Forum for International Cooperation, proposed to “pursue the new vision of green development and a way of life and work that is green, low-carbon, circular and sustainable. Efforts should be made to strengthen cooperation in ecological and environmental protection and build a sound ecosystem so as to realize the goals set by the 2030 Agenda for Sustainable Development,” and “set up a big data service platform on ecological and environmental protection, propose the establishment of an international coalition for green development on the Belt and Road, and provide support to related countries in adapting to climate change.”

As the world’s largest developing country and the largest carbon emission country, China should consider the problem of how to grab the opportunities of the Belt and Road Initiative and the lack of leadership in response to climate change due to the U.S. withdrawal, and promote its advanced concepts, experiences, standards and technologies to other developing countries through the platform of international negotiations and cooperation for climate change.

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