The Challenges of Globalization
Responding To: Shaping the Global Agenda on Climate Change
Paving the Way for Clean Technology Cooperation and Innovative Energy Finance
The willingness and attitudes of China and the United States play a significant role in shaping the global climate change agenda.
From 2014 to early 2016, China and the United States issued several joint statements on climate change and successfully promoted the signing of the Paris Agreement, which set the framework for post-2020 international cooperation. In-depth cooperation between China and United States will continue to lead the global direction of climate change mitigation and adaptation in the future.
It is worthwhile to explore models of cooperation from the experiences of China and the United States, especially in fields such as clean technology, energy finance and carbon markets, which may be replicable and applied to other countries in the world. The United States is a leading global innovator of green technologies while China is making increasingly contributions. Since the period of the 11th Five-Year-Plan (2005-2010), Beijing has set more stringent standards on environmental and energy efficiency. One could observe that the number and proportion of green patents has increased significantly. In addition, China has gained experience in international clean technology cooperation via a wide involvement in CDM projects and the PV industry. With a rapidly expanding clean-tech market in China after the signing of Paris Agreement, there is a huge potential for cooperation in clean technology transfer, technology localization, and collaborative research between the two countries.
In the field of energy finance, the United States is a world leader through its tested financial system and innovative financial instruments, whereas China has been developing and catching up rapidly in recent years. For example, the Chinese market for green bonds has grown more than ten-fold in 2016. Investment in the clean energy sector sped up even earlier on: angel investment volume started to increase in 2006, and public-private partnership investments have rocketed since 2011. The two countries have a bright future in collaborating on financial instruments and products, investment channels and risk management in terms of green finance.
Moreover, China is actively promoting market-oriented abatement policies. Since 2013, seven regional carbon emissions trading pilot programs have been set up as experiments for such policy tools in different socioeconomic environments. The nationwide carbon market will be launched in 2017, which is expected to be the world’s largest carbon market. The United States also shares experiences in regional carbon emissions trading systems such as the RGGI and California ETS. Attempts at some form of linkage between the carbon markets in the two countries, if successful, would be an important step forward for global carbon market linkage.
Professor Hao Min, University of International Relations | November 23, 2016
Professor Joanna Lewis, Georgetown University, School of Foreign Service | November 23, 2016