To address China’s coal emissions, the US could use a little help from its friends

Washington and Beijing recently announced an agreement to ramp up cooperation on climate change. The bilateral agreement was welcomed internationally.  

But when it comes to the climate necessity that China reduce its coal emissions, the Biden administration will need, as the Beatles counseled, “a little help from [its] friends.” That includes a sympathetic European Union (EU) and a recalcitrant Australia, as well as more political support domestically to address U.S. coal emissions. 

Coal dominates climate discussions because it is the biggest single source of carbon dioxide (CO2) emissions. Most of those emissions occur in China, totaling 7.8 gigatons in 2019, which is more than all U.S. and EU CO2 emissions combined. Significantly, China’s coal emissions need to drop by over 75 percent by 2040 to meet the climate goals of the Paris Agreement. As a consequence, China’s domestic use of coal has repeatedly been a point of emphasis for U.S. Climate Envoy John Kerry.  

However, the challenge in moving China off coal is immense, as 60 percent of its economy is powered by it (as compared to only 12 percent for the U.S.) To get China to act, the Biden administration will need help. 

The EU is a natural partner. It has some ability to influence Beijing on climate, as demonstrated by China’s carbon neutrality announcement that followed closely on the 2020 EU/China summit (which took place at a time when the U.S. had mostly withdrawn from the international climate effort.) More recently, Washington and the EU have successfully cooperated on major climate initiatives, such as an ambitious program to reduce methane emissions. Just as coordinated U.S./EU action appears to have led to Beijing halting its financing for overseas coal projects, joint U.S./EU diplomacy on China’s domestic coal use might prove useful.

One potential area for U.S./EU collaboration is on border carbon adjustments, an instrument that penalizes high-carbon imports. For example, it has been suggested that the U.S. and EU mobilize a coalition of countries to use this instrument to discourage China’s use of coal in manufacturing goods for export. 

Australia presents a different dynamic for U.S. efforts on China coal. Australia is one of the world’s top coal-producing countries, and its government has been very vocal in asserting its national interests to continue to push its coal, irrespective of climate concerns.  As its minister for resources and water declared earlier this fall: “The future of this crucial industry will be decided by the Australian government, not a foreign body that wants to shut it down costing thousands of jobs and billions of export dollars for our economy.” 

Australia is also the rare major producer country (together with India) that is projected to increase its coal output over the next 20 years. As Australian Prime Minister Morrison defiantly declared in response to efforts at COP 26 targeting coal, his country’s coal sector will continue to operate “for decades to come.”

This posture is problematic for efforts to target China coal because Australia is among the wealthiest countries in the world. This coal hesitancy by a wealthy country is significant because one of the major dynamics embedded in the international climate framework is the extent to which richer, developed countries will “continue taking the lead” on emissions reductions. Indeed, one of the justifications China has previously offered for its timid medium-term emissions goals is that it is still a developing country, not a wealthy developed one.

Of course, China is no longer the poorer developing country it once was, and now has a massive economy and international clout that have transformed it into what the Biden administration calls a “near-peer competitor” (or what has otherwise been termed a “hybrid superpower.”) But given its 1.4 billion population, China’s income per capita is barely one-fifth that of Australia. Impressing on China the need to change its approach on coal is more difficult in the face of wealthy Australia’s insistence to increase its own coal output.  

The U.S. has been willing to criticize Australia for its limited action on climate change, as have many others. But this pressure has to date been insufficient, arguably in part because Australia understands that its relationship with the U.S. is multi-faceted. Coincidently, Australia’s importance as an ally to the U.S. to counter China for security and other important strategic challenges in the Indo-Pacific may make Washington hesitate to over-pressure Australia about coal to serve “merely” climate objectives.

But if the U.S. wants to succeed on climate, it needs Australia to be more forthcoming about coal to better pressure China on the same subject. A persistent and concerted administration effort regarding Australia on this topic could prove fruitful, just as the U.S. was successful in encouraging Japan and South Korea to halt their support for coal plants abroad, which helped lead to China’s own end to overseas coal financing. 

This discussion regarding Australia also highlights the importance of the U.S. taking a more forceful position regarding its own coal use. Although current U.S. policies point to a substantial decrease in coal emissions of nearly 75 percent through 2040 (in comparison, China’s would drop a mere 15 percent), there are very visible differences of opinion within U.S. political circles that are constraining stronger climate action on coal. And this lack of domestic political alignment weakens the ability of the U.S. to adopt forceful positions to influence China. As a result, it is not surprising that November’s U.S./China agreement said little about coal and much more about methane emissions reductions, a less controversial issue in the U.S. The Biden administration could be more aggressive in pushing Beijing on coal if it received stronger political support to address U.S. coal emissions. 

China needs to substantially reduce its coal emissions for global climate efforts to succeed. To encourage Beijing that it is in its interest to do so, international pressure has a role to play. For the Biden administration to foster this pressure, it should mobilize support from allies like the EU and Australia, even as it works to build political support for domestic action. Although the prospects to create a united front on this topic currently seem uncertain, the issue is so important that the administration must persevere. 

Philippe Benoit has over 20 years of experience working on international energy and climate issues, including management positions at the International Energy Agency and the World Bank.  He is currently managing director, Energy and Sustainability, at Global Infrastructure Advisory Services 2050.