Trump Climate and Energy Policy Promises Are a Gift to China
President-elect Trump has promised to again withdraw the U.S. from the Paris Agreement, the international climate accord that promotes national reductions in greenhouse gas emissions through voluntary action plans. Such action requires a year to effectuate under the terms of the Agreement, so if done shortly after Trump takes office means the U.S. will be out after the November 2025 climate meetings to take place in Belem, Brazil. Trump has also promised to claw back unspent federal funding for clean energy technologies and promote fossil fuel production. Insofar as the result is almost certainly greater global warming and risks of exceeding dangerous tipping points, the world and all humanity will be — to use a favorite Trump term — losers. Less obviously and ironically given Trump’s hostility toward China, for several reasons cutting funding for clean energy and withdrawal from the Paris Agreement will be welcomed by the Asian nation.
1. The absence of US leadership creates an opening for China
The annual UN climate negotiations bring together stakeholders from all over the world. The thousands of public and private institutions that attend will provide Chinese state-owned enterprises and private organizations an opportunity to network, collaborate and scale up their initiatives globally, conveniently at a time when its emissions may be peaking. Exiting the Paris climate agreement, former Secretary of State and Biden climate envoy John Kerry notes, “would cede leadership to China, the very thing that [Mr. Trump] says we don’t want to do [and] diminish the ability of the world to be able to respond to this existential crisis.”
2. China will face less pressure to contribute climate finance to developing nations
The major issue at COP29, the Baku climate conference this year, was how much to increase finance for developing nations. The U.S. and EU argued that, consistent with its much greater wealth, China should be included among donors. China resisted, noting its historic and per capita emissions are still well below those of the U.S. and asserting its increasing investment in developing country infrastructure is a form of “voluntary” contribution. This issue was resolved by text effectively accepting China’s position. U.S. withdrawal from the Paris agreement would lessen this political pressure and be welcomed by China.
3. China will derive much greater economic benefits from a focus on renewable energy than the U.S. will from promoting oil and gas
Most energy experts agree Trump’s promise to “drill, baby, drill” is unlikely to achieve much. The U.S. is already the world’s largest producer of oil and gas and production exceeds domestic demand. The global market for oil and gas is also experiencing slow growth and increasing surpluses. The IEA predicts a likely peak by the end of the decade.
While still building coal plants and generating the majority of its electricity from fossil fuels, China has increasingly realized the domestic and international potential for linking its economic future to renewable energy technologies. After installing roughly as much PV capacity as the rest of the world combined in 2022, in 2023 China doubled new solar installations, increased new wind capacity by 66 percent, and almost quadrupled additions of energy storage. One result has been to drive down prices worldwide, making renewable systems much more attractive for poorer countries. A Chinese company, BYD, has become the world’s biggest EV manufacturer selling models for as little as $10,000. These trends are very likely to continue: China has announced plans to invest over US$6 trillion in low-carbon power generation and clean energy technologies.
4. China’s clean energy focus and aid policies will be more attractive to developing nations than the terms offered by the U.S.
The Biden Administration is actively promoting clean energy transitions in developing nations including South Africa, Indonesia, and Vietnam. In contrast, Trump has made clear he opposes foreign aid to countries unless they accept U.S. trade terms and agree to loans with strings attached. Developing countries will find financing and imports of solar and wind power from China increasingly preferable. Fortunately for them, China has also increasingly aligned its investments in developing countries with environmental objectives. Since its 2021 pledge to curb overseas coal financing, its green energy investments under the Belt and Road Initiative have been rising, reaching US$7.9 billion last year for solar and wind energy projects.
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All the world including the Chinese people will suffer if U.S. energy and climate policies under Trump result in greater greenhouse gas emissions and devastating climate change. These consequences will continue long after Trump is gone. At least in the short-term, however, China will benefit politically and economically from his planned withdrawal from the Paris Agreement and reduced support for clean energy technologies.
Addendum: Exxon is among large oil companies opposing U.S. withdrawal from the Paris climate agreement , another indication the issues are not as black and white as Trump statements suggest.
