Covid-19 | Strengthening alliances in a post-Covid world: green recovery as a new opportunity for EU-China climate cooperation?

As nations turn their attention to fighting the economic crisis resulting from the Covid-19 pandemic, green recovery seems to be a good—and perhaps for the first time, possible—option. As climate change remains the most pressing challenge despite the severity of the global Covid-19 pandemic, a green recovery plan to slow down global warming and meet climate goals becomes imperative. Leaders in the EU are taking the lead in greening the recovery, while China seems to be following suit. A ‘green consciousness’ seems to be emerging. Could these efforts improve EU-China relations and help these two global powerhouses work together to fight climate change? asks Hao Zhang.

Chinese and EU flag
Credit: Friends of Europe on Flickr

As the IMF’s latest report on fiscal policies shows, the Covid-19 crisis won’t change the global climate that is also in crisis, but responses to it might. Even though science hasn’t produced an answer on whether the current economic crisis induced by the pandemic will indeed affect the stock of greenhouse gases in the atmosphere, efforts to address it certainly will. It is undeniable that the current health and economic crisis together create a threat to our current development trajectory and that the scope and severity of the issue to some extent make lasting efforts and immediate actions crucial. These decisions on how we will recover from the pandemic and the resulting crisis will shape our society for the next few decades and, even more importantly perhaps, how we deal with our climate and environmental challenges. As the IPCC’s report warned that our current ambition and willingness are far from pushing us to reach our goal of containing global warming, a green recovery plan becomes imperative in a post-Covid-19 world.

The question then arises: How do we green our recovery? As the IMF suggests, fiscal policymakers should take the lead in making policies that support climate goals without undermining the purpose of boosting the economy. Then, finance ministries should be able to set up concrete and practical projects to implement these policies. In addition, public support for the green policies with the rationale that curbing emissions would likely reduce the risk of respiratory diseases is indispensable. In a post-Covid-19 world, this might sway the public in support of green measures in a way it never has before.

The EU seems to be taking the lead in employing green measures to recover its lockdown-hit economies. As policymakers tend to believe that a green plan can better help revive the economy, concrete actions can be witnessed. In May this year, the European Commission proposed a €750 billion recovery fund with green conditions, 25% of which is to be set aside for climate action, meaning that one-quarter of expenditure with a ‘do-no-harm’ clause can potentially rule out environmentally damaging investments.[1] In addition, the Commission also issued a €1.85 trillion, seven-year budget and pandemic recovery package. This EU green recovery package could be introduced elsewhere to stimulate the economy while fighting climate change.

In addition, the EU launched the world’s largest programs for innovative low-carbon technologies under the fund from the EU’s emissions trading system. This innovation fund is created to finance breakthrough technologies for renewable energy, energy-intensive industries, carbon capture, use and storage, etc. These could help create local job opportunities, lead the economy to a climate-neutral place, and also help the EU maintain its technological leadership in climate change. It is obvious that the EU pays great attention to the future of clean technologies, yet it allows member states and the market space to decide how the money is spent. The member states will be allowed to use their allocations from the EU’s Recovery and Resilience Facility for a wide range of green projects detailed in their national energy climate plans, and their proposals will be reviewed by the Commission; at the same time, private capital will be encouraged to invest in clean energy technologies.

On the other side of the world, in China, residents also survived the first wave of the pandemic, and the government is now also making recovery plans. This May, in the report on the work of the government, the development of renewable energy and efforts toward the clean and efficient use of coal were emphasized.[2] At the same time, this year for the first time Beijing has decided not to set an economic growth target, which is interpreted as a way to help China shift away from energy-intensive infrastructure projects.[3] This indeed has sent out a very positive signal; however, given that China still hasn’t submitted its Nationally Determined Contributions (NDCs) for the next reporting round, it also raises concerns about a lack of practical assurance.

Nevertheless, the cooperation between the EU and China in regard to green recovery seems promising. At the recent 22nd China-EU Summit on September 14 this year, President Xi Jinping stated that

China is interested in forging a green partnership with the EU and constructively participating in the global process of tackling climate change and preserving biodiversity. We are researching on reaching our long-term vision in the mid-century,[4] which includes carbon-peaking and carbon-neutrality.[5]

It is thus obvious that economic recovery after the Covid-19 pandemic is considered a top priority for leaders of both the EU and China, and it becomes increasingly clear that both parties are interested in a recovery package that aligns with their green transition goals.

Looking ahead, the EU and China can cooperate with each other in a few fields. First, the EU’s experiences could help China transition more rigorously to the use of green energy, especially in cutting the number of carbon-powered plants and subsidizing new energy vehicles. Second, the EU and China could agree to channel public and private funds to low-carbon investments both at home and abroad. Both parties are big investors of overseas development projects; they can thus work together to invest in projects subject to green terms. Going a step further, the EU and China could also work on developing international standards for sustainable finance[6], and China could learn from the EU’s experience in committing to more ambitious climate targets, specifically making ‘decarbonization’ a top priority in its next five-year plan.[7] Hopes are high for future cooperation between the EU and China in leading the world toward a green recovery, yet key decisions need to be made by both parties.

[1] Refer to Climate Home News, “EU €750 billion Covid recovery fund comes with green conditions”, May 27, 2020.

[2] Refer to ccchina.org.cn, 一图读懂2020政府工作报告, May 29, 2020.

[3] Refer to Climate Home News, “China prioritises employment over GDP growth in coronavirus recovery”, May 22, 2020.

[4] President Xi confirmed that China will try to reach carbon-neutrality before 2060 in his speech at a high-level meeting to mark the UN’s 75th anniversary on September 22nd, 2020.

[5] Refer to Global Times, “推动疫后全球经济复苏 中欧领导人视频会晤定目标”, September 15, 2020.

[6] Refer to China Dialogue, “Hopes for EU-China climate deal centre on a green recovery”, June 17, 2020.

[7] Refer to China Dialogue, “中欧气候协议前景如何?”, September 14, 2020.

About the author:

Hao ZhangHao Zhang is a PhD candidate at the International Institute of Social Studies (ISS), Erasmus University Rotterdam (EUR). Before joining ISS, she was a master’s student majoring international affairs at School of Global Policy and Strategy at University of California, San Diego. Her current research focus on policy advocacy of Chinese NGOs in global climate governance. Her research interests lie in Chinese politics, global climate politics and diplomacy.

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