At the United Nations General Assembly on Tuesday, Chinese President Xi Jinping declared China would achieve “carbon neutrality before 2060,” after reaching peak carbon emissions “before 2030.”
The targets have yet to be padded out with details, but Xi’s vague goal-setting was heralded as a bold step in advancing international action on climate change—a move forward while the U.S. continues to turn inward.
Even without providing details of the plan, Xi’s announcement asserted China as a global leader in the fight against climate change, signifying that the country is willing to take drastic action to keep global warming to a minimum. But China’s bold moves are likely driven by an ulterior motive—that, as the world’s leading producer of green energy tech, China stands to emerge as a global powerhouse in the post-oil world.
Always have Paris
This year, the U.S. officially will withdraw from the landmark Paris Agreement, inked in 2015 under the leadership of President Xi and President Barack Obama. In his address to the U.N., delivered minutes before Xi’s, President Donald Trump continued to rail against the accord.
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“China’s carbon emissions are nearly twice what the U.S. has, and it’s rising fast. By contrast, after I withdrew from the one-sided Paris climate accord, last year America reduced its carbon emissions by more than any country in the agreement,” Trump said. His statement is true only because U.S. power stations switched from coal to natural gas—a cheaper fossil fuel. Some energy firms and governments praise natural gas as a cleaner hydrocarbon fuel that will help the world transition to a zero-carbon economy, but it is still a fossil fuel.
With the U.S. removing itself from the global conversation about a greener future, China is set to not only assume the political lead in the worldwide shift to carbon-neutral power, but the market lead too.
“China [is] the biggest energy financier and biggest market, so its decisions play a major role in shaping how the rest of the world progresses with its transition away from the fossil fuels that cause climate change,” said Richard Black, director of the Energy and Climate Intelligence Unit (ECIU).
A developing power
China is the world’s largest producer of solar panels and wind turbines, dominating roughly 70% of the global market for the former. And, while currently third, China is set to surpass the U.S. as the world’s largest producer of power from nuclear energy by 2030, too. With a tighter target for reducing carbon emissions, investment in alternative energy is likely to swell.
Despite its advances in green tech, China, for now, continues to focus overseas investment on fossil fuel. In 2017 China announced a new “green” core tenet to its Belt and Road Initiative (BRI)—Xi’s landmark policy for overseas infrastructure investment. The green track pledged more funds for green energy projects, but BRI financing continues to primarily fund fossil fuels. In 2018, over 40% of BRI funding went to coal alone.
Still, China’s investment in green energy projects is still increasing. In Myanmar, for example, Chinese firms were awarded contracts at 29 out of 30 sites recently put to tender for development as solar power farms. China’s hydroelectric giant, China Three Gorges (CTG), already operates in 47 countries and controls 14 of Brazil’s total 48 hydro-plants.
Safety switch
Undoubtedly, security concerns will present an issue for China’s ascent as a global green-energy powerhouse. In 2016, the U.K. government awarded construction contracts for a nuclear power plant at Hinkley Point, in southwest England, to a state-owned Chinese firm. Security advisers warned it could give China the ability to “shut down Britain’s energy productions at will.” The nuclear plant is still under development; it’s approved but over budget.
China’s other attempts to export its most advanced technology have been halted by national security concerns, too. The U.S. and Australia, for example, have banned Shenzhen-based Huawei Technologies—the undisputed leader in 5G technology—from participating in the rollout of national 5G networks, citing national security concerns. The telecom-equipment maker continues to face scrutiny in the EU, Canada, and other states.
As it happens, Huawei is also a significant player in China’s solar industry; it is the world’s largest manufacturer of inverters, which convert the direct current generated by solar panels into alternating current so that it can be introduced to the grid.
Last year U.S. senators flagged Huawei inverters as a national security concern, too, and requested the Department of Energy ban them from the grid. But the U.S. ban on Huawei as a supplier of telecoms tech revealed one thing: that America has no domestic alternative to champion.
More must-read international coverage from Fortune:
- Europe’s leaders want to create a “new Bauhaus” as part of its Green Deal. But what does that even mean?
- Trump’s prolonged assault on WTO means its ruling against Chinese tariffs is essentially moot
- China’s controversial emergency-use program for COVID vaccines is going global
- One country is now paying citizens to exercise with their Apple Watch
- Microsoft hails success of its undersea data center experiment—and says it could have implications on dry land, too
