Despite the challenges, there are opportunities for China-EU climate cooperation going forward

In the aftermath of the recent European Parliament elections, climate cooperation between China and Europe stands at a critical juncture. The election outcomes, which saw a rise in right-wing populist parties and a weakened Green party influence, present both challenges and opportunities for advancing shared climate goals. As Europe recalibrates its climate policies and industrial strategies, it is crucial to examine the implications for China-Europe relations and propose viable solutions to foster stronger cooperation.

The European elections resulted in significant political shifts, with right-wing populist parties gaining traction and green parties experiencing losses. The rise of populist sentiments and the resulting fragmentation in the European Parliament pose a potential threat to the stability and predictability of European policymaking, including when it comes to climate policies and relations with China. However, despite these changes, centrist parties have managed to secure a strong presence, ensuring the continuity of the European Union's climate agenda.

As Europe intensifies its focus on integrating green technologies into broader industrial strategies, competition with China in sectors such as electric vehicles, solar panels and wind turbines is likely to increase. EU Commission President Ursula von der Leyen has framed European climate policy as an economic and security policy to ensure European competitiveness. In her view, it is "a race that will dictate who will be the first to climate neutrality and first to develop the technologies that will shape the global economy for decades to come". The EU's recent subsidy investigations and tariffs on Chinese EVs exemplify the growing trade tensions. Under the new Commission, the EU will continue to pursue its "de-risking "efforts and introduce further policies aimed at enabling European companies to compete with China on green technologies. These trade tensions will have to be carefully navigated by both sides to avoid escalation.

The geopolitical landscape, influenced by the looming US elections and potential policy shifts under a possible second Donald Trump administration, puts the global climate agenda at risk. Geopolitical tensions are already driving up military spending around the world, at the expense of urgently needed finance to mitigate and adapt to climate change. A withdrawal of the US from multilateral climate agreements could pressure China and Europe to step up their global climate leadership. Navigating these geopolitical uncertainties requires strategic diplomacy and robust multilateral cooperation.

Despite the challenges outlined above, together China and Europe can lead global ambitions in tackling climate change. The EU aims to become the first carbon neutral economy by 2050, and 2023 saw the lowest level of EU emissions since the 1960s. With the Fit for 55 package and the RePowerEU plan, the EU has raised its carbon reduction target to 55 percent and that for renewable energy consumption to at least 42.5 percent by 2030. Going forward, the EU is expected to strengthen these policies in an ambitious updated Nationally Determined Contribution to the United Nations Framework Convention on Climate Change. China has also introduced ambitious climate targets and has seen the largest growth in the use of renewables worldwide. As a result, China's emissions have declined for the past few months and may have already seen a peak in 2023. This puts China in a strong position to bolster its leadership role by introducing an ambitious NDC that provides a pathway for reducing emissions by 30 percent in 2035, including guiding emission-intensive and green technologies sectors with clear policy direction.

The green transition presents significant economic opportunities for both Europe and China. China is already a global leader in green technologies with clean energy as the top driver of economic growth in 2023, contributing 40 percent to GDP growth. The EU's Net Zero Industry Act and Critical Raw Material Act aim to strengthen European competitiveness in green technologies. The EU and China can both work toward creating resilient and sustainable supply chains for the technologies of the future by fostering the production capacity of renewables globally. While acknowledging and carefully managing potential trade tensions, the EU and China can create a constructive race to the top and support the global green transition.

Climate finance is another area where both China and the EU could have a significant impact. The EU, together with its member states, is the largest provider of climate finance worldwide. The EU has played a key role in establishing the newly created Loss and Damage Fund for countries highly impacted by climate change and achieving the global target of $100 billion in climate finance from developed to developing countries. Under the United Nations Framework Convention on Climate Change, China is not mandated to provide climate finance, but it has pledged to provide 20 billion yuan ($2.5 billion) through a dedicated South-South Climate Cooperation Fund back in 2015. So far, 10 percent of this funding has been delivered. Both Europe and China could play an even bigger role in the upcoming climate negotiations at COP29 and the Forum on China-Africa Cooperation to assure countries of further financial support to help them meet the climate challenge.

Going forward, EU-China cooperation on climate change should center on four key areas.

First, China and the EU should pursue continued bilateral engagement, through the High-Level Dialogue on Climate and the Environment and all other technical dialogue opportunities available, to work together to solve common challenges both face in the green transition, such as electricity market reform, grid flexibility, industrial decarbonization and climate adaptation.

Second, both sides should engage in open discussions on the differences and challenges in the bilateral relationship, particularly on the role of trade tensions related to green technologies and climate-related trade measures, to find compromises.

Third, in a fragmented and geopolitically vulnerable world, China and the EU should continue working together in multilateral forums to champion new global initiatives to accelerate the global green transition.

Last, as leaders in the global fight against climate change, China and the EU can accelerate their domestic climate action in a pathway aligned to the 1.5 C target and find innovative ways to mobilize the global finance needed to mitigate and adapt to climate change.

The author is China policy analyst with the Center for Research on Energy and Clean Air. The author contributed this article to China Watch, a think tank powered by China Daily.

The views do not necessarily reflect those of China Daily.

Contact the editor at [email protected].