The phrase “Only Nixon could go to China” crops up in unusual places, such is its ability to describe a unique set of political circumstances. One place is in my diploma dissertation, but perhaps even more unusual is when it’s quoted by Ambassador Spock as an “old Vulcan proverb” in the movie “Star Trek VI: The Undiscovered Country.”
Originally, it was an askance comment on U.S. President Richard Nixon’s 1972 visit to China, where he met with Chairman Mao Zedong. The U.S. and China had been foes since Mao came to power in 1949, and Nixon’s visit was a turning point in relations. It took a president with unassailable hard-line anti-communist credentials to boldly go where no president had gone before without alienating voters on either side of the aisle.
Only Nixon could go to China and only China, the world’s industrial hardliner and its largest emitter of carbon dioxide, can take the lead on climate change.
President Xi Jinping, the country’s most powerful leader since Mao, promised in 2020 that CO2 emissions would peak by 2030 but that China’s entire economy will be carbon neutral by 2060.
The country currently emits more than 10 billion metric tons per year of CO2. The primary source is fossil fuels, most notably burning coal to generate electricity and fire industrial boilers. In 2019, about 60% of total energy production in China came from coal.
It is unlikely that Xi has suddenly become enthral of Greta Thunberg, so the question is, why is China doing this?
Part of the reason could be using high-profile pledges on climate change as an effective tool to build China’s reputation as a responsible global actor on other fronts.
For evidence of this paradigm shift, detractors could look at current policy on prioritizing climate change over construction of new chemical factories for the first time. Work on the world’s largest coal chemical plant in Shaanxi province was cancelled a few days ago. The €16.4 billion project had already been suspended in July when it failed to pass an official energy-saving evaluation.
Until recently, coal chemistry had experienced something of a renaissance in China but is now under fire from Chinese climate change activists. Converting coal in chemicals is a high-intensity CO2 processes – 10-20 times higher than the national average per unit of gross domestic product in 2019, according to Chinese media.
A coal-to-ethylene glycol project with planned capacity of 1.2 million metric tons per year under construction by a subsidiary of Tongkun Holding Group in the coastal province of Zhejiang was also recently cancelled without replacement.
No company is immune to the low-carbon wave. China’s leading refiner Sinopec cancelled the expansion of its Maoming site in the southern province of Guangdong. The company, which is also one of the top-10 global lubricant manufacturers, recently established a calculation and evaluation method to calculate the carbon footprint of four oil products, including lubricant base oil.
Beijing is pressuring provincial governments to respect previously set caps on energy consumption. This is happening in the wake of these ambitious national CO2 pledges. Large-scale coal chemical projects are thus becoming subject to increasingly stringent energy controls.
Let’s not forget that the National Energy Administration, China’s energy regulator, previously ordered the shutdown of more than 100 coal-fired power plants in 11 provinces.
Large-scale chemical projects in particular – both coal- and oil-based – will have a much harder time getting the necessary permits in China from now on than ever before. It may make these types of projects too unviable to even get off the drawing board.
Other economic drivers include a huge deflation in the cost of solar and wind energy, largely thanks to the scale of manufacturing in China and also commercial opportunities as firms start to move into these increasingly profitable and dynamic sectors. In the past year, four of the top-five global renewable energy deals were made by Chinese companies, and five of the top-six solar panel companies were Chinese.
China has committed to investing $360 billion in renewable energy projects and says 13 million green jobs will be created, the state says.
If Xi wants to position China as a technology leader, especially in supplying low-carbon products to the rest of the world, it needs to restructure its economy away from heavy industry toward technology innovation and services, following the well-established trajectory of economies in the West.
Added pressure on China’s entire economy becoming carbon neutral by 2060 also comes from a growing and increasingly vocal middle class that is concerned about air pollution and other environmental problems.
“Only Nixon could go to China” and “only China could lead the change of climate.”
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