Now Biden administration officials are trying to get talks back on track even as they also explore other tools, such as tariffs, that could be tied to the emissions level of products such as steel and aluminum.
How to navigate relations with China was a major focus of the Group of Seven summit this month. Leaders offered a host of tough-on-Beijing language and urged countries that “have the capabilities and are not yet among the current providers of international climate finance” to step up and do more to help developing nations invest in climate-related projects. That was a reference to China and other economically powerful players such as Middle Eastern oil nations.
Chinese factories that churn out batteries, solar panels and others key ingredients of the energy transition are so dominant that any global effort to reduce emissions will end up deeply dependent on Beijing, even as U.S. policymakers try to move manufacturing back to the United States in what G-7 leaders called “de-risking, not decoupling.”
“We ultimately can’t solve climate change without China. It’s by far the largest emitter in the world,” said Joanna Lewis, a China specialist at Georgetown University. “If we just say, ‘okay, we’re going to walk away from that opportunity to engage with them constructively,’ I don’t see how that helps us solve climate change globally.”
A growing source of tension in U.S.-China relations
China’s annual emissions are more than double those of the United States, and it is set to surpass U.S. historic emissions by 2050, making it the most important single actor in determining whether the world can avert the worst effects of climate change. The picture there is mixed: Even as China has approved new coal plants, it has also moved aggressively on renewables.
Proponents of engagement with China on climate issues — which under the Biden administration has been led by Kerry — argue that the ongoing conversation builds trust and enables the two nations to work together on areas where their interest align. At a United Nations climate conference in Glasgow in 2021, a joint U.S.-Chinese pledge to cooperate on climate issues helped push other negotiators toward a more ambitious final agreement, diplomats said at the time.
But as attitudes toward China have hardened in Washington, the space for maneuver has narrowed. Before the Trump administration, Beijing and Washington often isolated climate diplomacy from tensions elsewhere in the relationship and were able to continue to cooperate on issues, diplomats who worked on climate issues under former president Barack Obama said. More recently, climate issues are a core part of the competition. Biden’s signature effort to combat global warming, the Inflation Reduction Act, is centered on building up a domestic renewables industry largely at the expense of Chinese manufacturers.
“Today we’re faced with a really complex geopolitical environment. And I don’t think that the U.S. government has a clear understanding of how climate fits within its overall strategy toward China,” said Kelly Sims Gallagher, a professor at the Fletcher School at Tufts University who was a senior adviser on Chinese climate issues under Obama.
China, meanwhile, may be playing the other side of the divide, using climate as a bargaining chip to achieve other gains in its overall relationship with Washington, she said.
“Climate is understood by China to be something the U.S. wants, and it’s using climate as a source of leverage in the multifaceted relationship,” she said.
That approach may have led to the on-again, off-again dialogue in recent months between Kerry and Xie Zhenhua, China’s special climate envoy. China officially suspended all climate talks after an August visit to Taiwan by former House Speaker Nancy Pelosi (D-Calif.). Then it resumed them ahead of a U.N. climate conference in November. But Xie has faced health issues, and Kerry has said in recent months that progress has been muted.
China’s role in global warming
The goals aren’t purely about China’s own emissions. U.S. policymakers have been urging China to devote more money toward financing responses to climate change outside of its borders. Some experts also hope that the same cheap solar panels and batteries that frustrate U.S. trade policymakers can be used to help less-resourced nations go green.
The broader relationship faced another setback in February, after a Chinese spy balloon floated into American airspace, leading Secretary of State Antony Blinken to cancel a planned trip to China. Kerry said this month that he had been invited to China to keep talking about climate issues, but he offered no timetable for the discussion.
In the meantime, China has been rapidly approving new coal power projects. Provincial governments greenlighted more coal-fired power plants in the first three months of 2023 than they did in all of 2021, Greenpeace East Asia said last month. Some major regions have faced crippling electricity shortages in recent years, and governments may also see the massive projects as a way to stimulate the economy.
China is still likely on track to meet its goals of peaking its emissions before 2030 and achieving net-zero emissions by 2060. It installed a record amount of solar power capacity last year — and this year alone is set to install more than the entire existing solar capacity of the United States. But critics say its climate plans aren’t ambitious enough and won’t avert the worst consequences of global warming.
A new kind of trade tariff
In the face of stalled progress on the diplomatic front, the Biden administration has started to explore other tools to nudge China to reduce emissions and act more ambitiously on climate issues, including through tariffs that would be linked to the carbon footprint of Chinese imports.
The administration has begun working on a pilot project, proposing to the European Union that it team up on global tariffs on steel and aluminum that would essentially put a tax on carbon-intensive production from abroad. That proposal is under discussion amid conversations between Washington and Brussels over Trump-era tariffs against European steel and aluminum. Biden suspended the Europe-focused tariffs in 2021, but he didn’t cancel them, and they are set to snap back at the end of the year absent a deal to come up with an alternative.
Emissions-focused tariffs could be an effective long-term incentive for Chinese manufacturers to invest in cleaner technology and research to lower emissions in steel, aluminum and other exports, said Philippe Benoit, a scholar at the Center on Global Energy Policy at Columbia University, even if in the short run China’s emissions will likely be driven by other considerations, such as the need for more electricity.
But the U.S. proposal has an uncertain future.
E.U. leaders have little choice but to negotiate with the Americans, but many there are skeptical of the U.S. approach, which they say feels too focused on China. Europe is working on a set of emissions-linked tariffs of its own that it plans to phase in over the next several years. They argue their approach will be more successful and more compatible with World Trade Organization rules.
Emissions-linked tariffs would also be unwieldy for U.S. policymakers to implement, since, unlike the E.U., there’s no clear price for emissions inside the United States.
“We need to tax polluting activities more, but it should be done in a nondiscriminatory manner,” said Bas Eickhout, a Dutch member of the European Parliament from the GreenLeft party who has been deeply involved on E.U. climate regulations. “The U.S. proposal is clearly guided toward China only.
Beijing also views the potential U.S. tariffs with skepticism, arguing that they are less about battling climate change than they are another tool in Washington’s effort to rein back Chinese trade.
Chinese scholars have warned of a growing regime of “green trade barriers” that threaten to undercut the competitiveness of Chinese exports.
A tariff would “primarily be intended to protect domestic industrial competitiveness,” said Sun Yongping, director of the Global Climate Governance Research Center at Huazhong University of Science and Technology in Wuhan.
If implemented, the trade tool would “cast a shadow” over U.S.-China climate cooperation and damage mutual trust by creating challenges for Chinese exports, he said.
Only a tiny percentage of Chinese steel is exported to the United States, but tariffs could have a substantial impact on aluminum producers.
Geopolitical tensions with the United States mean that “China won’t take it nicely, especially if that extra carbon cost is not imposed equally on U.S. producers,” said Li Shuo, a senior climate adviser for Greenpeace East Asia.
Few within the Biden administration appear prepared to abandon climate talks with China altogether, with some holding out hope that the latest invitation to Kerry is a sign of renewed interest in doing deals.
“It would be a huge missed opportunity for the U.S. to not be engaging in one of the few areas where we can have constructive conversations with China,” said Lewis, the Georgetown China specialist.
