What COP28 means for China's future climate policies and strategies

"I would join with Xie Zhenhua and the Chinese delegation in announcing that the US and China both intend, based on the many initiatives set out in the global stocktake decisions, to again update our long-term strategies, and we invite other parties to join us in doing so."

John Kerry, US climate envoy

US Special Presidential Envoy for Climate John Kerry's speech at the closing plenary of the UN Climate Change Conference was delivered on behalf of both the US and China, a unique occurrence underscoring a partnership that is becoming increasingly rare between the two nations as geopolitical rivalry escalates.

The relationship forged between Kerry and China's former climate envoy Xie Zhenhua in the run up to COP28 was critical in facilitating negotiations at many different levels.

One of the highlights was a stark change in China's role, from being a target of accusations for lacking climate ambition, to becoming a facilitator of discussions between developed and developing countries, according to some observers.

China's good bilateral relations with some OPEC countries helped bridge communications with developed countries during fossil fuel-related negotiations, to help achieve the final outcome that introduced language on transitioning away from fossil fuels for the first time.

Xie said his friendship with Kerry has been going on for over 20 years, and they held the same belief that US and China need to do something practical together to benefit future generations.

"Our collaboration in the climate area has also, to some extent, helped to enhance the complicated US-China relations," Xie said at a press conference.

Xie and Kerry both have been in climate negotiations for decades. They set an example for what influential nations can do if they work together, and demonstrated the value of diplomatic engagement.

On Jan. 12, after Xie and Kerry jointly hosted the kick-off meeting for the US-China Working Group on Enhancing Climate Action, the Chinese government announced Xie will step down as China's special climate envoy, and Liu Zhenmin, former Vice Minister of Foreign Affairs, will take over.

There are now concerns that as Xie and Kerry pass on the baton, future relations may be clouded by issues around Taiwan or US tariffs on Chinese clean energy technologies like EVs and batteries.

Peaking emissions before 2030

COP28 was also notable for China confirming its current target of peaking carbon emissions before 2030, a structural decline in emissions and one of the most critical global milestones in meeting global warming targets. Xie said China will come up with a more specific annual and volume target soon.

Analysts at S&P Global Commodity Insights forecast that China's carbon emissions from the power sector will peak around 2024, depending on near-term demand growth, hydro output and renewable growth.

S&P Global analysts forecasted that coal will remain the backbone of China's power supply in the short term, driven by a surge of approvals of new capacities to address energy security and supply shortage concerns, which will lead to faster capacity growth before 2030.

Despite the capacity addition, coal's role will shift from baseload power to flexibility provider, namely provide buffer supplies to cope with renewables' intermittency, according to S&P Global.

The capacity factor of China's coal-fired power plants is expected to drop to around 25% by 2050, more than half the current level.

Beijing's big wins

Beijing emerged from COP28 with one goal firmly met, but one only met partial success.

As the world's largest manufacturer for solar PV products and wind turbines, China sought to build partnerships with developing countries with emerging renewable demand to expand its markets overseas.

"We have signed 46 cooperation agreements with 39 countries in the Global South," Xie said at a press conference. He said, China has collaborated in the past 10 years with over 100 countries in developing renewable and other decarbonization projects.

"We will collaborate more with Middle East oil producing countries in scaling up renewable deployment, as well as green hydrogen, green ammonia and green methanol deployment," Xie added.

Beijing also sought to build a global consensus against carbon taxes like the European Union's Carbon Border Adjustment Mechanism, or CBAM, on emission-intensive products.

The global stocktake text concluded at COP28 included a line saying, "measures taken to combat climate change, including unilateral ones, should not constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on international trade".

The adoption of this text will not have any significant impact on CBAM's implementation, especially with no clear definitions of the phrases "arbitrary or unjustifiable discrimination", and "disguised restriction", a lawyer specializing in international trades said.

Disputes around CBAM are unlikely to be settled at COPs, and the World Trade Organization is expected to play a more important role in this area, said Kevin Mo, principal at China-based think tank Institute for Global Decarbonization Progress. He added that the implementation details of CBAM have a lot of space for negotiation.

However, the inclusion of the text still provided some basis for future negotiations around the trade aspect of carbon taxes.

Mo said the EU is considering allowing some least developed countries to be exempted from CBAM or committing that a substantial amount of money collected under CBAM will flow back to developing countries.

He added it was very unlikely that the EU will exempt China or allow taxes collected to flow back to China in the form of climate finance.

Commitment concerns

China was absent from several major agreements at COP28, such as the Global Renewables and Energy Efficiency Pledge to triple renewable energy capacity by 2030 and double annual rate of energy efficiency improvements from around 2% to over 4% every year until 2030.

China was also absent from the pledge to triple nuclear energy capacity by 2050, and major Chinese national oil companies were not part of the decarbonization pledge by oil and gas companies to reduce methane emissions.

Experts like IGDP's Mo were of the view that the renewables and nuclear goals were largely achievable, but maintaining 4% energy efficiency improvements -- which measures a country's energy consumption per unit of GDP -- every year could be increasingly challenging over time.

S&P Global forecast that, based on existing policies and projects, global renewable installation capacity is expected to triple in 2037. China will triple its renewable capacity in 2033, Africa and Middle East in 2032, US in 2035, India in 2036, OECD's Asia Pacific in 2037, and EU in 2042.

The methane pledge in particular was focused on the oil and gas sector, whereas China's larger problem was to curb methane emissions from the coal sector.

"More than half of the world's methane from coal comes from Chinese coal mines," said Fred Krupp, president of US-based non-profit Environmental Defense Fund.

IGDP's Mo said, for cutting emissions from coal mining, Europe and the US have very limited proven technologies and experiences that can be shared. Hence, China needs more time to quantify its methane emissions, set a concrete emission reduction target and explore its own pathway, while lowering mitigation costs.

Negotiators have observed that Beijing has been wary of committing to targets unless it is absolutely certain of achieving them, emphasizing that some commitments made by developed nations -- such as the $100 billion of climate finance -- have never materialized.

Further reading: COP28: An in-depth review