China’s Climate Strategy: Navigating Policy Crossroads in a Changing World

China, the world’s largest emitter of greenhouse gases, faces a critical juncture in its climate policy. Recent shifts, including the retirement of key climate envoys and landmark agreements with the United States, signal evolving commitments ahead of the Paris Agreement’s NDC deadline. President Xi Jinping’s leadership pledges, from emissions peaking by 2030 to net zero by 2060, underscore China’s changing stance. Geopolitical factors, such as the US election outcome, influence China’s strategic decisions, while internal challenges like coal dependence highlight the need for measurable reductions in coal consumption by 2030. China’s investments in clean-energy manufacturing offer economic growth opportunities while driving sustainable modernization. As China navigates these decisions, it aims to lead the global fight against climate change and define the future of sustainable development.

China’s Climate Dilemma: Strategic Choices and Global Leadership

China has held the title of the world’s largest emitter of greenhouse gases for nearly two decades, currently responsible for 35 percent of global carbon dioxide emissions. Yet, in the ever-shifting landscape of geopolitics, marked by conflicts, economic strains, and pivotal elections, perceptions of China’s role could be on the brink of transformation.

Cityscape of Shanghai under pollution - environmental challenges in Chinese cities

In 2023, Xie Zhenhua, China’s long-serving climate envoy (now retired), kept a tight lid on the nation’s intentions—indicating a reluctance to make significant commitments at that time.

However, leading up to the United Nations Climate Change Conference (COP28) in Dubai, a groundbreaking agreement between the United States and China made headlines for its focus on climate cooperation, albeit without binding targets. While China committed to initiating a “shift away from fossil fuels” within the final COP28 accord, concerns linger over its hesitancy to curtail coal consumption.

Now, 2025 looms as a pivotal year for China’s climate stance. Ahead of the Paris climate agreement’s deadline for submitting updated Nationally Determined Contributions (NDCs), including emissions targets for 2035, China appears to be engaged in internal discussions regarding these targets. While setting ambitious climate goals poses significant challenges for China, aligning with such objectives holds promise for its economic and political future.

Chinese President Xi Jinping has played a significant role in driving global climate action before. In 2014, President Xi and then-US President Barack Obama made joint commitments to carbon reduction ahead of the pivotal 2015 Paris climate conference. Then, in 2020, President Xi pledged that China would peak its emissions by 2030 and achieve net-zero emissions by 2060.

However, the current global environment, marked by volatility, coupled with China’s economic challenges, presents formidable obstacles. Following a surge in emissions during and post the Covid-19 pandemic, China has struggled to meet its carbon-intensity target – a measure of emissions per unit of GDP – for 2025 and will need to achieve absolute emissions reductions to reach this goal.

Previously, policymakers had anticipated emissions to rise until around 2028. Additionally, China’s ongoing dependence on coal remains a concern; the government has sanctioned numerous new coal-fired power plants in recent years to bolster energy security.

The world looks to China for a more ambitious stance. Transforming China’s commitment to reduce coal consumption starting from 2026 into a concrete coal-reduction target for 2030 would effectively curb emissions growth.

Geopolitical factors will undoubtedly influence China’s decisions as well. Chinese policymakers are likely to weigh their options cautiously, particularly in light of the US election in November. A Trump victory might mean reduced climate pressure on Beijing from the US. Nevertheless, China should take a more proactive role in assuming global leadership, especially with the void left by the US.

Beijing has compelling reasons to elevate its climate efforts. China’s substantial investment in clean-energy manufacturing is catalyzing economic growth.

By solidifying its position as the primary global supplier of solar panels, batteries, electric vehicles, and other green technologies, China is integrating its decarbonization agenda with its economic strategy, presenting a strategic opportunity to spearhead sustainable modernization.

This surge in clean-energy initiatives could expedite China’s reduction of CO2 emissions by 2024, potentially achieving emissions peak well before 2030. If China reaches this milestone before 2025, it could make substantial emissions cuts by 2035, the same year it aims to achieve moderate development status.

In fact, given China’s progress towards this status, it should specify a concrete emissions reduction target for 2035—a goal few developing countries have set so far.

Chinese policymakers face intricate decisions in setting climate objectives. Some decisions, like selecting a base year for emissions measurements, seem technical but carry significant environmental consequences.

For instance, setting a percentage target to reduce emissions from an undefined peak to 2035 might appear logical, but it could incentivize industries nearing their targets to delay peak emissions. This approach could also cast uncertainty on China’s emissions in 2035, as the peak from which emissions will decrease may not be immediately evident.

Alternatively, using a historical base year, like 2020 or 2015, would be more straightforward but might yield an overly conservative target, considering China’s substantial investment in coal and unclear emissions trajectory.

For instance, if China’s recent economic slowdown causes emissions to plateau, such a target might require minimal climate action post-2030. However, the world requires a more ambitious approach from China. Translating China’s commitment to reducing coal consumption from 2026 onward into a measurable coal reduction target for 2030 would effectively cap emissions increases.

Over the next year, all eyes will be on China to observe how it navigates the complexities of establishing new NDC commitments. Pursuing an ambitious strategy could accelerate the domestic energy transition, which is already stimulating economic growth, while solidifying a leadership role in the global fight against climate change.