EU and China to co-operate on clean energy technology and emissions trading

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The EU-China summit in Beijing yesterday culminated in a joint declaration between the EU and China to further strengthen unified efforts against climate change.

According to an EU announcement, the bilateral closing statement for the first time included close co-operation on a technical and political level to further develop low carbon technologies in the mobility and energy sectors. At the same time, a parallel agreement was made which seeks to bolster EU-Chinese co-operation on further developing emissions trading schemes (ETS).

The announcement of closer working arrangements between the two blocs comes in the wake of turmoil prompted by U.S. President Donald Trump’s recent trip to Europe, which saw him criticize America’s NATO and EU allies while cosying up to Russian president Vladimir Putin, in what could herald a reordering of geopolitical status quo that has endured since the end of the Second World War.

According to an EU statement, European Commission President Jean-Claude Juncker; Council President Donald Tusk; and Chinese Prime Minister Li Keqiang have adopted a “leaders’ statement on climate change and clean energy”.

High ranking officials of China and the EU also signed a memorandum of understanding regarding planned co-operation on emissions trading.

Unlike previous climate related statements, this one will be adopted at presidential and prime ministerial level, reportedly demonstrating the urgency with which the two blocs are pursuing low carbon goals. The renewed 2018 statement will be thematically broader, as it incorporates clean energy as a technology critical to achieving a low carbon economy.

Technical and political co-operation

Under the accord, China and the EU will seek to intensify political, technical, economic and scientific co-operation on climate change and clean energy, with the announcement stating both are urgent imperatives for the two parties. By 2030, China seeks to raise its renewable energy penetration up to 20%, and the EU to 32%.

The statement adds the EU and China will engage in collaboration for the exchange of best practice in clean energy production, to specifically include market design, grid infrastructure and storage capacity.

The leaders’ statement underlines an intent to implement the provisions of the Paris Agreement on climate change under the Paris Agreement Work Program, which is expected to be adopted at the next global climate conference, to be held in December in Katowice, Poland.

Emissions trading scheme collaboration

China and the EU are backing emissions trading as a cost-effective policy tool. The regions will engage in expert dialogues and potentially adopt market designs that are more efficient at meeting low carbon targets. China introduced its carbon market in September 2017.

EU Commissioner for Climate Action and Energy, Miguel Arias Cañete, said: “Further developing co-operation between the two largest emission trading systems of the world is not only in our mutual interest but also necessary to tackle common challenges in the mid and longer term. The newly established policy dialogue would be instrumental in this context.”

Based on data provided by the European Commission’s Joint Research Centre, and the PBL Netherlands Environmental Assessment Agency, China emitted 10.5 billion tonnes of COin 2016 – nearly 30% of the global total and amounting to 0.5 tonnes per dollar of GDP. In the same year, EU member states emitted 3.4 billion tonnes of CO2 – 0.2 tonnes per dollar of GDP. The U.S. in 2016 accounted for 5 billion tonnes of CO2 – 0.3 tonnes per dollar of GDP.

The leaders’ statement also backs financial commitments of a cumulative $100 billion annually, pledged by all parties to the Paris Agreement and depending on their financial capacities. Under the Paris Agreement Work Program, the 2025 Conference of the Parties to the Paris Agreement should be preceded by a meeting to set a new quantified goal for climate related investments. The existing goal of a cumulative $100 billion worldwide should serve as a baseline with the objective of the meeting to increase this effort.