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Winning the Blue Sky Battle: Will China’s Energy Transition be Just?

After releasing a policy paper on China's rising climate leadership in a changing world, our team received a letter from Washington. It raised a fundamental question: is China able to take up this role, as climate change is now part of broader political and economic agendas? The authors of the policy paper now respond to this letter and argue that the key to the ultimate success is a just energy transition.

Dear Paul,

We couldn’t agree more that “climate change is no longer a niche issue”. And the success of climate policy absolutely rests on climate change action coming to be seen through a broader lens, and as part of the general push towards sustainable development and greater prosperity. In contrast to the situation you described in the US at present, addressing climate change is now part and parcel of China’s core economic and political strategies – the “energy production and consumption revolution”, “industrial transformation and upgrading”, “ecological civilization”, and “winning the blue sky battle”, to name a few.

To respond to your question of whether China will be able to maintain its promising transition to a low carbon path, despite the need for some players in China to adjust to unfamiliar ways of doing things, we offer here some brief analysis based on our recent study focusing on the energy transition journey.

Can this ambitious transition be a just and ultimately successful one?

Backed by high-level political commitments and building on its success in achieving most of the Millennium Development Goals (MDGs), China’s energy transition and its agenda to implement the Sustainable Development Goals (SDGs) and its Nationally Determined Contribution (NDC) exhibit a relatively high level of ambition and policy alignment – both with regard to specific targets and policies, and the frameworks and roadmaps for achieving them. However, there remain significant gaps and socioeconomic challenges. Human rights are still an issue, with the 2015 ITUC Global Rights Index 2015 awarding China a score of only 5, signifying that its citizens enjoy “no guarantee of rights”. This is a poor performance, given that any score above 5 would have indicated the breakdown of the rule of law. China also ranked 79th out of the 176 countries in the Corruption Perceptions Index (CPI) in 2016 scoring 40 (where 0 is highly corrupt and 100 very clean). Looking more specifically at the energy transition, as coal becomes less profitable, whole communities in China – entire towns and dusty cities – face upheavals, with tens of thousands of people set to lose their jobs in the coal and steel sectors.

As our analysis in the study illustrates, a wide range of actors and interests will need to be accommodated if the energy transition is to succeed in China. Ensuring a just transition process will therefore require efforts that go beyond increasing institutional efficiency and policy synergies, and developing a long-term low emission development plan. It will also be essential to engage the various affected stakeholders, and to more firmly embed labor, social and gender equity principles into policy implementation to ensure greater respect for rights and to strengthen acceptance. Setting up separate dialogue processes for the country’s different regions will also be important to take into account their varying concerns.

The bold new vision for China?

China is also expected to play an important role in driving the just transition agenda internationally, and the bold vision for Chinese foreign policy put forward at the recent 19th national congress of the Communist Party of China showed the country no longer hesitates to accept this new role. Long content to keep a low profile in international affairs, the congress hailed the ascent of China as an “important participant, contributor and torchbearer in the global endeavor for ecological civilization” which “aims to foster a new type of international relations that builds a community with a shared future for mankind”. In his address, President Xi announced the objective to complete the process of “socialist modernization” by 2035, and to become a “great, modern, socialist power” by mid-century. In outlining this vision for China in 2050, Xi built on the words of previous Chinese leaders to say that the country should become “prosperous, strong, democratic, culturally advanced, harmonious and beautiful”, thus signaling the anchoring of climate change action and ecological development within the country’s fundamental economic and political values.

For now, this remains a top down vision, and the true challenge will be whether this “beautiful” new vision can be realized through a just transition process that satisfies the interests of key players at all levels.