At September’s UN General Assembly, Xi Jinping pledged to stop all Chinese investment in coal plant projects abroad. The announcement comes against the backdrop of a leadership dry spell from the United States, the EU, and COP26 host the UK. What does this 50-billion-dollar divestment mean for climate diplomacy? Amélie Canonne and Nicolas Haeringer assess the magnitude of China’s move and outline an alternative, climate justice approach to the energy transition.
What if September 2021 was a tipping point in the geopolitics of climate? An undercommented one – but a clear milestone on the path towards a global energy revolution?
During the UN General Assembly, Chinese President Xi Jinping announced that China would stop “building” coal-fired power plants abroad. The announcement was widely publicised. But the full extent of its implications has not yet been understood. If Emmanuel Macron or Joe Biden had made similar commitments, the media coverage would have likely been very different – “hope is back” headlines would have blossomed. In announcing the end of coal in China, Xi Jinping is changing the world order and its future.
Good ideas don’t fall from the sky
Xi Jinping pledged to stop all Chinese investment in coal plant projects abroad. Concretely, the decision means that China will stop supporting the construction of at least 44 new power plants, coal mining operations are not affected. Up to 50 billion dollars will be divested – making it one of the most significant announcements since the launch of the fossil fuel divestment campaigns in the early 2010s.
A few days afterwards, Bank of China committed to immediately withdraw from all future coal projects, including mining activities. Xi Jinping’s announcement therefore takes on an even greater resonance. Since most Chinese foreign mining activities feed Beijing’s domestic consumption, it demonstrates the acceleration of China’s domestic energy transition.
Up to 50 billion dollars will be divested [by China] – making it one of the most significant announcements since the launch of the fossil fuel divestment campaigns in the early 2010s.
The coal era is behind us. The question is no longer whether to close coal-fired power plants, but how to organise so that the last one will be shut down as early as possible. However, up to now, coal projects had nevertheless continued to multiply: trends are one thing, path dependency (in this case: the structural effects of a specific energy mix) is another.
It should also be underlined that this divestment is a movement win. If China is accelerating its coal phase out, starting with projects outside its borders, it is also a result of the growing number of movements resisting coal infrastructures. In Kenya, Ghana, Bangladesh, and the Philippines, communities affected by new coal-fired power plants are mobilising massively to stop the destruction of life.
A common, but differentiated irresponsibility?
Ahead of this year’s COP, many people (activists included) were waiting for leadership to come from the United States, the European Union, or even the chairing United Kingdom. Sure, Joe Biden has promised to increase the US contribution to the Green Fund that supports developing countries, but he has also sent mixed messages. The Biden administrations has authorised further oil and gas exploration and drilling in the Gulf of Mexico, arguing that the IPCC report does not present “sufficient cause” to cancel these projects. Trump is gone, but climate denial has not fully left the White House.
For the European Union, what is at stake here is also about its loss of influence. The EU has never succeeded in stepping up as a true leader in the fight against climate change (a choice that would have been important even for purely instrumental reasons such as counterbalancing Europe’s loss of geopolitical power). The provincialisation of Europe is underway – and the EU’s refusal to endorse its historic responsibility in climate change actively contributes to the process.
Ahead of this year’s COP, many people (activists included) were waiting for leadership to come from the United States, the European Union, or even the chairing United Kingdom.
Beijing has instead made a major shift towards active climate diplomacy, backed by a renewable energy deployment strategy that has been in the works for at least 10 years. By doing so, China is demonstrating its commitment to fulfill its share of the responsibility for climate change. It is taking on all the governments that are trying to make it the scapegoat for their inaction, willingly forgetting to admit that they import a good part of these emissions on their domestic markets.
The difference is here stark, almost cruel. The United States procrastinates, continuing to give oil and gas companies permits to drill on federal land and providing unwavering support to the coal economy. The UK is firing up its coal plants amid rising gas prices. France has failed to come up with a consensual scenario for closing its last coal plant, and continues to support Total in its headlong extractive rush, all the while clinging to nuclear power despite the immeasurable financial waste it represents.
The European Union meanwhile considers that gas is a low-carbon transition energy and is investing in new infrastructure projects that are doubly problematic: they do not help central and eastern European member states move away from their dependence on Russia and they lock in far too many future emissions.
The longer we wait, the higher the social cost will be.
Of course, China’s coal phase-out raises the question of what the alternative energy source will be, given that Beijing does not intend to reduce its electricity production or move away from extractivism. Nor does it mean that China will help its partners in Asia and Africa pursue an alternative, more sober model of development. China could very well increase its investments in nuclear power, while positioning itself as a major gas player, to balance its gradual coal phase-out.
Moreover, the lack of will and transformative ambition of Europe and North America’s representative regimes can only feed the idea that democracy is incompatible with what is required to profoundly transform our energy systems. By delaying change, states are creating the conditions for the emergence of a last-resort authoritarian approach. The later choices are anticipated, the more painful and unpopular they will be – yet the more urgently they will have to be made. The longer we wait, the higher the social cost will be – holding the fossil fuel sector’s employees (and their unions) hostage between the need to defend jobs and their desire to actively contribute to inventing a new model is not helpful.
Towards climate justice?
Beijing embodies a top-down, strong-state approach. It has little consideration for human rights, especially when dealing with the Uighurs. Top-down approaches to transition will not enable us to “change the system”. The vision of the future envisaged by Xi Jinping, Elon Musk, and Google’s CEO are ultimately one and the same: low carbon (even if largely based on the fantasies of “neutrality”) but organised around technologies that are essentially undemocratic – the role of the state and the recognition of the rights of “minorities” are the only variations. The market or authoritarianism? We are caught between two visions of the future, neither of which can be considered emancipatory.
That Xi Jinping managed to overshadow European and US climate policies in one announcement highlights the carelessness and irresponsibility of Western leaders. There is a risk that the international community will use these announcements to postpone ambitious decisions, and that a significant part of COP26 will be wasted in applauding the fulfillment of the “self-fulfilling prophecy” of the Paris Agreement. The announcements of September 21 are only one, very insufficient, step.
Xi Jinping managed to overshadow European and US climate policies in one announcement which highlights the carelessness and irresponsibility of Western leaders
It is important to speed up coal phase-out in two ways: putting pressure on the private financial institutions (especially in Japan and the United States) that continue to invest in the sector and accelerating the pace at which existing infrastructures are closed down. What is at stake is the managed decline of the fossil fuel industry so that it may disappear. Here, Europe is one of the front lines: 166 coal plants are yet to be shut down.
How to get there? On the path towards climate justice, we have only one option: building a decentralised energy system, facilitating small-scale self-production, shared and redistributed according to local needs and capacities. It is therefore important to insist on people’s control over the energy transition and the need for a bottom-up approach.
This doesn’t mean that the climate movement should only focus on local battles. The diplomatic and geostrategic implications of the Chinese announcement are as much a matter for movements as for foreign ministries and market analysts: the question of diplomacy and foreign policy concerns us all the more since the instruments that will enable us to succeed in the transition without making concessions to China on human rights (or to other authoritarian states) have yet to be invented entirely.
On the path towards climate justice, we have only one option: building a decentralised energy system, facilitating small-scale self-production, shared according to local needs and capacities.
For the Western powers, not “making concessions” generally means military escalation (see the recent Australian submarine affair) and possible economic and trade sanctions, even if we know only too well that they affect the most vulnerable and never weaken the political, economic, and military elites.
The European Union in general, France in particular, are entering a democratic deadlock here. By making pricing carbon (through the EU’s Emissions Trading System) the main, if not the only, element of their energy transition policies, and by refusing to pursue any real redistributive policy to balance the inequalities that this system inevitably triggers nor to compensate them by massive public investments, Europe is strengthening the largely artificial opposition between the social emergency and the climate emergency. Yet the question of access to energy is central – the Yellow Vests movement in France, as well as the 2019 protests in Chile and Lebanon, erupted in response to policies which made the working and middle classes pay for the cost of the transition. The current energy crisis might trigger similar reactions – and actually even in China, where people are currently protesting against power shortages.
The global energy crisis can only fuel people’s anger, and the risk is for anger to be pointed at the transition, rather than at fossil fuels and transnational companies. One of the challenges for the climate justice movement is to channel this anger into a broad movement to build a real energy transition from below. This remains the only possible horizon if we want to reconcile social justice, respect for fundamental rights and freedoms, and the climate emergency.