A remarkable thing happened at COP27 in Sharm El Sheikh. Rather than aligning with developing countries against wealthy Western nations, China, whose foreign policy has largely been built around forging stronger economic and diplomatic relations with developing countries, appeared to abandon this approach wholesale. By failing to join more than 150 other countries pledging to curb methane emissions, and by outright refusing to join efforts to provide financial support to vulnerable countries, China confirmed that it is unwilling to make commitments to its supposed partners. In doing so, it opened a path for the United States to act.
As developing countries battle against severe weather, rising sea levels, and droughts, China’s emissions are exacerbating these challenges. With more greenhouse gas emissions than the United States, the European Union, and Japan combined, China isa major perpetrator of the climate change crisis. Up to this point, China has been an ally of the developing world, but it now refuses to help pay for the damages caused by its emissions. This creates an opportunity for the United States and its allies to exercise leadership by providing a credible alternative to developing countries that is good for the climate, democracy, and human rights.
Since coming to power, Xi Jinping has sought to restore China to what he believes is its rightful position on the world stage. To that end, Beijing is expanding its sphere of influence in the Global South with the intention of building a world order in which China leads in designing and setting the rules. The Belt and Road Initiative (BRI) has helped Xi achieve these aims.
Militarily, the BRI has enabled China to expand its overseas military presence. With the Hambantota port in Sri Lanka, its first overseas base in Djibouti, and a strategic airstrip only a few thousand kilometers from Hawaii, Beijing is using projects of questionable commercial value to expand its global footprint. China’s economic connections in Africa will additionally provide it access to the continent’s growing middle class – a potential source of demand for Chinese industry over the coming decades. China is also making political demands a condition for assistance. During the pandemic, African leaders were prodded to publicly declare their gratitude for shipments of Chinese vaccines and personal protective equipment, and China reportedly has promised aid in return for support at the United Nations (U.N.). Perhaps partly as a result, in June 2021, no African country backed a statement critical of China at the U.N.’s Human Rights Council. Rather, more than 30 African countries signed a counterstatement in defense of China.
This transactional approach, however, is beginning to show cracks. Last spring, China sent its Foreign Minister, Wang Yi, to the South Pacific to discuss a trade and security communique with 10 island nations. Wang’s efforts failed. Pacific Islands states told Wang Yi that they wanted to work with China on their own priorities — climate change and COVID-19 recovery. A couple of weeks later at the Shangri-La Defense Dialogue, Fiji’s Minister of Defense Inia Seruiratu said, “The single greatest threat to our very existence is climate change. It threatens our very hopes and dreams of prosperity.”
China is not entirely deaf to the concerns of island nations, but so far, its efforts have fallen short. Beijing has put in place a 2060 carbon neutrality target; however, if China’s emissions trajectory does not decline well before its 2060 carbon neutrality target, it will further destabilize the climate and increase climate-related security and economic risks, most acutely in the Global South.
An Opportunity for U.S. Leadership
Leveraging the gap left by China’s current inward focus at COP27 and unwillingness to take concrete steps to support developing nations requires the United States to move quickly and efficiently. The United States should now undertake additional domestic reforms to build its credibility as a leader on climate action, offer a credible alternative to China’s investment model, and set new rules for the net-zero century. If successful, this approach will impede China’s ability to build alliances in the developing world and increase pressure on China to adjust its climate policies.
Recently, the United States has put real weight behind its words on climate action. On June 6, 2022,U.S. President Joe Biden invoked the Defense Production Act for clean technology production, which will accelerate the manufacturing of clean energy technologies. Earlier this year, the U.S. Congress passed the Infrastructure Investment and Jobs Act, CHIPS and Science Act, and the Inflation Reduction Act (IRA), which will help reduce emissions by decarbonizing industrial processes, creating American jobs to develop and build clean technology, and funding U.S. emissions reduction plans.
By reducing its own emissions, the United States can demonstrate that it is a serious partner for developing countries. By assisting developing countries through the energy transition, the United States can further show these countries the long-term value of working with a country that truly supports freedom of choice, open standards, and commercial responsibility.
Build Viable Alternatives
One of China’s greatest advantages has been its reliance on industrial policy to unify national goals with market ambitions. To provide developing countries an alternative to China, the United States must refocus its public-private partnerships when it comes to supply chain diversification, overseas financing, and clean technology exports.
The United States and its partners recently announced the Minerals Security Partnership (MSP), which is committed to building responsible critical mineral supply chains to support economic prosperity and climate objectives. Policymakers should expand MSP to include countries in the Global South and advocate for local value chains rather than China’s extractive approach, which does not invest in local economies through the development of local processing and refinement capabilities.
Additionally, policymakers must unlock private financing opportunities for the Global South. Using guarantees, the Development Finance Corporation (DFC) can mitigate the risk of projects and leverage external resources beyond the lending capacity of the institution. This makes maximum use of public financing and unlocks private capital needed for clean energy projects. Currently, DFC is prohibited from supporting investments in certain economies, namely the Solomon Islands, Bangladesh, Chile, and Panama, among others. A change in these rules would give DFC the authority to work in more countries of strategic interest.
The United States should also develop a clean technology commercial export strategy that fast-tracks packages of public and private financing and American-manufactured clean technology. Such a strategy should clearly identify countries ripe for investment, technology options, and financing mechanisms. This step would support a growing domestic industrial base with international demand, give countries the tools to sustainably grow their economies, and allow the United States to compete with China on clean technology.
Build the Rules for the Net-Zero Century
The United States and its allies should work to promote open and transparent rules that level the playing field for the evolving global economic order. China has been very active in international fora that set the rules and standards for climate action, such as through the China Standards 2035 plan. This plan details China’s increasing roles in setting standards for emerging technologies, including clean technologies. To counter China’s influence in these fora, the United States should work to establish open and transparent rules for clean energy, supply chains, and how carbon content of traded goods and services will be measured.
China’s economy is in trouble and its Global South strategy is showing cracks. The United States has a strategic opportunity to expand its climate diplomacy with the developing world, while pressuring China to cut its own emissions. To succeed, the United States must do something it hasn’t done well in recent years: show-up for partners globally, in a reliable and credible way. Otherwise, China will.