China and the EU are fighting about the future of their Partnership on Climate Change, as China’s greenhouse gas emissions surge once again. China, however, is on the verge of launching a very ambitious cap and trade system.
Late in 2017, a dispute broke out between John Ashton, then the foreign secretary’s special representative on climate change, and the Chinese Ministry of Science and Technology. At the heart of the conflict is the 2005 Partnership on Climate Change signed by Brussels and Beijing – in which the EU agreed to help funding China’s leap towards lower carbon emissions. One of the deal’s key projects was the development of a carbon capture and storage (CCS) project. The EU Commission alone pledged to pay €50 million for the actual construction, with final costs estimated between €300 and €550 million.
After a “confrontational” meeting with the Chinese Ministry of Science and Technology late last year, the European Commission sent a formal letter to Beijing, informing them that the EU was “not in a position to maintain the foreseen financial support”, but that the EU would like to “reorient the EU-China cooperation to a policy and expert dialogue”. But China has since “demanded” the implementation of the 2009 plan for the CCS project, which included the phrase that the EU had “considered” spending €7 million.
This fallout coincides with a new report by the Global Carbon Project, an international research consortium, predicting that carbon dioxide emissions from fossil fuels and industry will rise 2 per cent this year. This increase is largely caused by China, whose emissions jumped 3.5 per cent in 2017. In 2016, emissions were flat even though the world economy grew 3.2 per cent. This is because of China’s economic slowdown (a four-year economic slump lasting from 2012 to 2016). Unsurprisingly, emissions began rising again in China after the recent economic revival, underpinned by a recovery in coal and steel prices.
This upsurge should not last for too long thanks to the forthcoming Chinese emissions trading scheme (ETS). This cap and trade scheme hailed as “monumental” by campaigners will step up the country’s efforts to mitigate greenhouse gas emissions. It will have companies buy and sell emissions credits below a defined, gradually declining limit. ETS will initially account for around 34-39 per cent of China’s total emissions, before gradually expanding to include other high emitting industries such as aluminium and cement in the coming years.
The Environment Defense Fund, a green NGO, said that by the time the program is fully implemented in 2020 it is expected to cover some five billion metric tonnes of CO2, about 15 per cent of total global emissions.
This post is also available in: FR (FR)DE (DE)