Coauthor with Professor CS Kiang, this post originally appeared on China Dialogue. December 19, 2007

Climate-change policy in China has reached a critical moment. A new, equitable form of development that takes global warming into account could be the nation’s gift to the world, say He Gang and CS Kiang.

Since the industrial revolution, people have followed a model of development that relies on large-scale consumption of fossil fuels. These fuels are non-renewable and their use has produced a terrible side-effect in the form of climate change. This western model of economic growth is unsustainable. If China is to take a leading role in tackling global warming, it should find an alternative model for humanity to follow. A core idea in traditional Chinese thought is “unity between heaven and man, between knowledge and practice”. When applied to climate change, this suggests we need to create a new model of development, which achieves harmony between man and nature. This will be China's contribution to the world.

In dealing with climate change, China should continue to apply the principle of equity. The twenty-first century should not be the American century or the Chinese century: it should be the century of equal coexistence. Global warming, however, threatens this possibility. China cannot isolate itself from the rest of the world any more other countries can isolate themselves from China. China needs a world that develops peacefully, and the world needs a China that develops sustainably. In facing up to the challenge of climate change, China and the rest of the world need to communicate and act together on an equal basis. In this, the equity principle is key.

Climate-change policy in China has reached a critical moment. Domestic and foreign opinion demand the country takes positive, substantive steps to tackle global warming. China's leadership needs to be founded on the rigorous implementation of the principle of “common but differentiated responsibilities”. Faced with pressures at home and abroad, will China continue to allow developed countries to lead it around by the nose? Or will it take positive, strategic action to break the encirclement in which it finds itself? We offer the following, simple remarks in the hope an ensuing discussion may lead us to greater things.

Multiple mechanisms

Writing about the recent UN-led climate-change conference in Bali, Maurice Strong, former secretary-general of the 1992 United Nations Conference on Environment and Development, said that the conference would kick start the post-Kyotoprocess. The international community will enter an era of “processing”, when China will continue to adhere to the dual-track programme of the UNFCC and Kyoto Protocol. But China should also take the initiative in establishing bilateral and multilateral mechanisms to supplement the dual-track approach. They could even become an important driving force in implementation. The basis for all of these mechanisms, which are listed below, must be the principle of equity.

• A multilateral D6 mechanism: the six largest developing nations, China, India, Brazil, Mexico, South Africa and Indonesia, could meet in the same way the G8 group of developed nations currently do. Through the G8+5, China, India, Brazil, South Africa and Mexico already meet with developed countries for talks on climate change. However, a D6 group would provide a platform for closer communication and cooperation between developing countries, which would put them in a better position to pursue their interests in talks with developed nations.

• Dialogue between China and India: the International Energy Agency estimates China and India’s combined emissions accounted for one-third of the total increase in global emissions in 2007. Cooperation and agreement between the world’s two largest developing nations is vital for negotiation and collective action on climate change.

• Bilateral mechanisms between China and Europe; China and the US; and China and Australia: a partnership between China and Europe would focus on strengthening cooperation on climate change, energy issues and encouraging sustainable development. The US is still the world’s biggest emitter and is not signed up to Kyoto, but there have been recent positive changes in domestic climate-change policy. Australia has just signed the Kyoto Protocol. Bilateral partnerships between China and the US, and China and Australia, would open up new possibilities for cooperation on climate change.

Taking the initiative

In previous climate negotiations, China has insisted on retaining its status as a developing nation, and the demands that go with this. The government has emphasised the principle of “common but differentiated responsibilities” and the issue of historical emissions. It has also drawn the important distinction between the emissions that China creates to survive and develop, and the west’s “luxury” emissions. The issue of taking joint responsibility for exported emissions has also received recent attention. These are all issues that the principle of common but differentiated responsibilities needs to take into account. But what if the Chinese government were to alter its principally defensive stance? It could start to take active, strategic steps to change the current situation, where the country reduces its emissions, but is still criticised. The country could win greater understanding, respect and support from the international community.

An active strategy would require recognition of two points: firstly, tackling climate change is an important opportunity for China to find a sustainable development path. Reducing energy consumption and emissions will help China achieve a low-carbon society and develop both quickly and sustainably. Secondly, China must seize the diplomatic initiative to create an image of itself as a responsible power. There are many who believe in concepts such as the “China threat” and “value-oriented diplomacy”, an active and exemplary climate-change stance from China would provide an effective riposte to them.

It is also necessary to look at the core issues in climate-change policy: mitigation, adaptation, technology and finance. Equity is central to all four, and we argue that China should be more active, flexible and strategic in its approach to global warming.

Mitigation targets

Climate-change mitigation is the most urgent of all the steps China can take. The country's eleventh Five-Year Plan contains a number of restrictive targets. By 2010, for instance, China’s energy consumption per unit of GDP should be around 20% lower than in 2005. Emissions of major pollutants (excluding greenhouse gases) should be reduced by 10%, and 10% of the country's energy should come from renewable sources. The eleventh Five-Year Plan on environmental protection has added emphasis regarding climate change. The State Council passed legislation specifically requiring reductions in energy consumption and emissions (known as the “three plans” and “three laws”). These are all positive contributions from China.

But a problem still needs to be solved: how do we turn political pressure into specific and effective action? China needs to think seriously about its long-term plans for cutting emissions and come up with suitable strategies for reductions. The EU has set a target to reduce emissions to 20% below 1990 levels by 2020, and individual European countries have set their own emissions reduction targets. Specific reductions targets are an effective method of reducing emissions.

China should also create emissions reduction plans, which could, for instance, come into effect when per-capita emissions reach a certain level. This would increase the transparency and predictability of the policy-making process and be an important step towards establishing a responsible image. However, common but differentiated responsibilities must continue to be the guiding principle.

Adaptation at home and abroad

China is a large farming nation, and climate change has a strong impact on agriculture. For vast areas of China that are impoverished and have fragile ecosystems, global warming presents some particularly daunting challenges. Thirty-eight percent of Chinese GDP comes from exports, and research shows that exports are responsible for 23% of China's emissions. The effects of climate change on China are huge, and many of the steps that the country wants to take to protect the environment – such as increasing forest cover to 20%, as slated in the eleventh Five-Year plan – may be all the harder to achieve because of these impacts. China needs to adapt to climate change.

At the same time, poor African nations and small island states are suffering the most as a result of climate change. As China seeks its resources in other parts of the world, it should combine adaptation to climate changewith ideas of local sustainable development, development of resources and local economic growth. This is a requirement of an equal and mutually-beneficial relationship and also a sign of responsibility as a large country.

Technological cooperation

Whether to slow or to adapt to global warming, technology is vital. In its current stage of development, China needs technology that can provide breakthroughs in energy- and carbon-intensive, highly polluting industries like the chemical, steel, and concrete sectors. Technology is also required to make advances in energy efficiency, renewable energy, hydrogen fuel cells, clean coal and carbon capture and storage. In tackling climate change and reducing emissions, technology is not a solution in itself, but it is the most important means to a solution.

There are various methods of using technology to alleviate and adapt to climate change: technology diffusion, technology deployment, technology transfer, technology development and joint technology development. We need to apply these methods to each specific industry and technology as appropriate, according to demand and stage of development.

Many technologies can be attained from developed countries. There are still some problems to be resolved concerning intellectual property rights and trade barriers, but there are also international mechanisms and bilateral plans in place for technological cooperation. China is still not clear what its technological requirements are. It does not have a strong enough awareness of the technologies that are urgently needed. The country needs to take into consideration how technology can be applied and used economically. The most advanced technology is not necessarily the most suitable. A list should be drawn up of technology needed by different sectors, and mutually beneficial mechanisms for technological cooperation should be pursued.

Financial guarantees

The State Council approved the establishment in October of the China Clean Development Mechanism (CDM) fund. By the end of the same month, the country’s top economic planning body, the National Development and Reform Commission, had already approved 885 CDM projects. If all of these projects are successful, total emissions reductions due to the projects will total 1.5 billion tonnes, bringing in an income of US$15 billion. Over US$3 billion of this will go into the CDM Fund. It is a small sum, but a significant starting point that represents the first funding targeted specifically at tackling climate change.

Funding for dealing with climate change should also come in part from the national budget and specialist funds. Space should be made in the national budget for research into climate change, technological development, management and innovation. Problems that need a major breakthrough to be solved should be financed through specially-established funds.

On an international level, multilateral and bilateral funds should continue to be used in tandem. The first part of this article looked at the importance of multilateral and bilateral mechanisms in initiating processes and finding solutions. In finance, multilateral and bilateral funds are just as important. Multilateral funds are more influential, but management and coordination are more difficult. Bilateral funds are more manageable, but often suffer from lack of investment and are limited in what they can achieve. Maurice Strong recently argued that the UN should set up a US$1 trillion fund to tackle climate change.

Decisive action

Only action can secure China’s position as a leader on climate change. What should China do? We suggest an action plan should have “Chinese characteristics” and “global influence”. By acting in an exemplary fashion and engaging in global networks, China can encourage global action.

China can become a member of the 50 zero-emissions communities that explore approaches to climate change by cooperating on energy-saving, the circular economy, energy-efficiency in buildings and so on, on the condition they work within their own natural, economic, cultural and religious conditions. Were China to join this network, it could increase mutual understanding between China and the world and provide a base for coordinated actions. China would also be given a chance to share its wisdom with the world.

China should foster community leadership. Training at a grassroots-level is key to implementing plans and will instill ideas of leadership in sustainable development and climate-change awareness at the heart of society, which creates a basis for equal coexistence.

Crisis or opportunity?

Climate change is an unprecedented crisis for humanity. But realising the crisis and being determined to change can prove a turning point. Encouraging use of clean, renewable energy and research-and-development into new technology can set humanity on the path to a more sustainable model of development. For China, it is an opportunity to make the transition from a manufacturing economy to a knowledge economy based on innovation, increase government transparency and strengthen the rule of law. Climate change is already a global and regional security issue. By tackling climate change, China should hold firm on principles of equity and engage in global dialogue and coordinated action. It needs to actively take on responsibilities and fulfill its potential to be a global leader. In the long term, this will mean that for China, climate change can be an opportunity rather than a crisis. It is an opportunity to pursue genuine sustainable development and become a nation respected by the world.