As COP28 kicks off in Dubai, there is a pressing need for global leaders to set aside geopolitical differences in order to collaborate effectively on climate action. As such, a recent US-China deal to work jointly to address the climate crisis is widely seen as a significant development in climate diplomacy.
Under the “Sunnylands deal” – named after the California estate at which the US and China’s special envoys for climate action John Kerry and Xie Zhenhua met on 14 November – both countries committed to “accelerating renewable energy deployment in their respective economies”. This is to support global efforts to triple renewable energy capacity by 2030 and “accelerate the substitution for coal, oil and gas generation”.
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China and the US also reaffirmed their commitment to reaching the Paris Agreement goal of limiting global warming to below 2°C above pre-industrial levels, and ideally 1.5°C; supported the new global goal of tripling renewable energy capacity globally by 2030; and pledged to ensure that COP28’s Global Stocktake decision text “sends signals” on the role that fossil fuels and renewables should play in the energy transition (it does not say anything more explicit than this on fossil fuels).
“[This sends a] positive signal on the energy transition,” said Alden Meyer, a senior associate at think tank E3G at a recent press briefing. However, he noted that the deal’s language on coal “is rather tortured”, as it omits any firm commitment to “sharply reduce coal emissions in both countries between now and 2030”. The deal is also “silent on the need to phase down oil and gas emissions globally over the next five to ten years – one of the biggest sticking points [of COP28]”.
Speaking to Energy Monitor, Qi Qin, a China analyst at the non-profit Centre for Research on Energy and Clean Air (CREA), said: “The significance of this deal, particularly from China’s perspective, is multifaceted. [Among other things, it marks a] positive development for Chinese manufacturing exports, as it opens up new avenues for trade and collaboration in the renewable energy sector.”
US-China climate deal: Stocktake on renewables
When it comes to the rapid expansion of renewables, no country can compete with China, which overtook the US in terms of built wind and solar capacity as far back as 2013.
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By GlobalDataWith a combined onshore and offshore wind capacity of more than 310GW, China’s total wind capacity is roughly equal to that of the other top seven countries globally, according to a June 2023 analysis by the non-profit Global Energy Monitor. In addition, China is on track to double its renewable capacity by 2030, according to new projections by the climate think tank Ember.
Ember’s projections are based on both explicit national renewables targets set out in public policy documents and proxy, or ‘implicit’ targets based on national support packages for renewables and net-zero targets.
The think tank estimates that China will reach 2,461GW of installed renewables capacity by 2030, although the country is already on track to install at least 26% more renewables in 2023 than it would need to install on average annually to meet this forecast.
As China’s clean energy deployment "continues to exceed expectations” – the country hit its 2025 target of renewables exceeding 50% of total installed electricity generation capacity in June 2023 – it has the ability to deliver "substantially more" than existing forecasts, says Ember.
Ember finds that China has been increasing its renewable additions at a compound annual growth rate (CAGR) of 12% since 2015. Meanwhile, the CAGR for the US was 8% for this period. Taking into account current growth rates, the US is "not yet deploying renewables at the pace required" to triple renewables capacity by 2030, according to Ember.
According to the think tank, current US policy sets the country on course for 938GW of renewable capacity by 2030 (468GW of solar, 334GW of onshore wind and 35GW of offshore wind), or a 59% share of renewable electricity. This is 2.7 times 2022 levels.
The US has no official target for renewables, but Ember’s projections take into account the various support policies for clean power implemented by the US in recent years, especially the Inflation Reduction Act, whose significant federal tax credits for clean energy projects had an “overnight” effect, and the Bipartisan Infrastructure Law.
Calling time on methane…
In addition to supporting global efforts on renewables, the US-China climate deal includes a pledge by China to include gases beyond CO₂ – notably methane – in its next climate action plan.
Meyer describes this commitment, first discussed by Kerry and Xie over the summer, as a “breakthrough”, given that China is not currently a signatory to a global methane pledge to reduce methane emissions by 30% by 2030, despite being the world’s largest methane polluter. China accounts for 10% of global methane emissions, according to Carbon Brief.
According to a Chinese Methane Emission Control Action Plan published in November, China will now attempt to control methane emissions from energy, agriculture and waste “in a scientific, rational and orderly manner”.
… but not fossil fuels
However, beyond the commitments on renewables, methane and a Global Stocktake text that endorses the energy transition, the US and China failed to commit to anything more substantive on fossil fuels.
In 2022, fossil fuels still accounted for 64% of China’s electricity generation, with coal making up 61% of that, according to the Statistical Review of World Energy 2023 (formerly produced by bp).
While the US has moved away from coal in recent years, the share of fossil fuels in its electricity mix also remains high, with 60% of US electricity coming from fossil fuels in 2022, of which the largest single source (40%) was natural gas.
At COP28, a handful of countries and many civil society groups will be campaigning for a formal agreement on phasing out fossil fuels, although some countries are pushing to phase them “down” rather than “out”.
While the US is expected to push for an immediate end to new permitting of coal-fired power plants (not hugely significant for the country given its lack of reliance on the fuel), recent comments from Xie, arguing that a global fossil fuel phase-out is unrealistic, have dampened hopes that such an agreement will be forthcoming at COP28.
Keep up with Energy Monitor: Subscribe to our weekly newsletterIndeed, China’s extraordinary progress on building out renewables risks being undermined by its continued dependence on fossil fuels, warns a new assessment of China’s climate action progress from CREA and the Heinrich Böll Foundation, a think tank affiliated with the green party in Germany.
The researchers note that although China has successfully shifted its economy towards greener growth, with construction plummeting and clean energy manufacturing and deployment becoming "a key economic driver", the country’s lack of firm emissions targets and continued investment in coal power "keep China’s emission outlook uncertain".
In part due to low hydropower output caused by droughts, China's CO₂ emissions rebounded this year, and CREA expects they will increase by at least 4% in 2023, although "record clean energy additions have nevertheless brought the emissions peak closer".
The think tank finds that China is "badly off track" when it comes to curbing coal-fired capacity and meeting national energy intensity targets for 2025, given it has granted permits for 152GW of new coal power since the start of 2022, starting construction on 92GW, with total capacity on track to rise 23% by 2030.
Despite the strong signals at Sunnylands, CREA’s Qi says: “It is important to note that such cooperation isn't simply a matter of signing an agreement. It requires gradual steps in building connections, establishing trust and opening communication channels.”
The US-China climate deal builds on several months of attempts to ease diplomatic tensions between the two countries, including a recent summit in November, where US President Joe Biden summarised his talks with China's President Xi Jinping as “among the most constructive and productive” to date.
Qi hopes that the Sunnylands deal “marks the beginning of a journey towards complementary and mutually beneficial relations in the renewable energy sector [between China and the US]".
"The hope is that this partnership will lead to a synergy where both countries leverage their respective advantages for a more sustainable future,” she sums up. The next opportunity for both countries to build on these foundations is at COP28 in Dubai.
