What is behind the US-China climate deal?

The US and China reached a landmark climate change deal to cut greenhouse gases on November 12. The agreement is a groundbreaking departure from the two countries’ reluctance to commit to aggressive emission reduction targets and highlights the increased importance of climate change on the national agenda in both countries. The deal is also a strong indicator of the world’s two largest polluters’ support for an international climate change agreement.

China’s pledge to reach peak emissions by 2030 as part of the agreement has been criticized as simply continuing existing emissions reduction schedules. However, analysis from Nan Zhou et al. at the Lawrence Berkeley National Laboratory shows that this may actually lock in the boldest of several possible scenarios [See Figure 1].

Figure 1 – For emissions to peak by 2030 as promised, China would likely have to reduce their reliance on coal significantly Source: Nan Zhou et al.
Figure 1 – For emissions to peak by 2030 as promised, China would likely have to reduce their reliance on coal significantly.
Source: Nan Zhou et al.

Alternatively, China’s emissions in the more conservative “continued improvement scenario” would peak around 2035 and include an additional 86 billion tons of CO2 emissions by 2050. To put this in perspective, this is equivalent to about a decade of emissions at current rates as China released 8.5 billion tons of CO2 in 2012 (Energy Information Agency). To reach this new target, China has promised 20% of their energy from renewable sources by 2030, which will also likely require a significant reduction in their reliance on coal.

While both countries are greatly exposed to climate change hazards, ND-GAIN’s ranking of countries based on vulnerability and readiness for climate change shows China lags in ‘readiness,’ where it is ranked #79 against #11 for the United-States. Readiness ratings assess a country’s ability to effectively manage and implement resilience investments and effectively implement adaptation projects.

Historic precipitation changes in China are predicted to be exacerbated due to climate change Source: Nature
Historic precipitation changes in China are predicted to be exacerbated due to climate change.
Source: Nature

Climate change is predicted to cause vast and differing shifts in climate patterns in China, with centers of commerce particularly vulnerable. Historical precipitation trends and IPCC predictions forecast increased flooding, erosion, and outbreaks of diseases such as malaria in some areas, with increased drought and desertification in others. Much of China’s industry and economic value is concentrated in the increasingly extreme weather- and flood-prone southeast [See Figure 2].

Figure 2 – China’s southeast is the main center of economic wealth as well as the most vulnerable to extreme weather from climate change Source: Wikipedia according to 2012 National Bureau of Statistics figures
Figure 2 – China’s southeast is the main center of economic wealth as well as the most vulnerable to extreme weather from climate change.
Source: Wikipedia according to 2012 National Bureau of Statistics figures

Guangzhou and Shanghai, located in this region, are considered two of the most vulnerable cities in Asia in terms of total value of assets at risk (IPCC). Exemplary of the regional nature of climate change impacts in China, droughts in the northeast are predicted to cause $1.7 billion in losses by 2030.

With emissions representing nearly 1/3 of global totals, China’s new pledge to cut greenhouse gas emissions may help limit future climate change impacts, especially assuming a global effort follows. However, China has recognized the extreme economic risks they are already facing, acknowledging an estimated $32.8 billion in losses due to climate change since 1990. China has been gradually implementing broad adaptation policy measures since 2007 to guide and fund coastal protection, extreme weather forecasting and response, and water management, which culminated in a comprehensive adaptation plan released in 2013. Although adaptation helps to mitigate climate change impacts, greater risk from increased frequency and severity of environmental disasters is unavoidable.

International trade and supply chain interdependencies turn local climate change vulnerability to global business risk. Source: Visual News
International trade and supply chain interdependencies turn local climate change vulnerability to global business risk.
Source: Visual News

As a significant source of global manufacturing and consumption, more frequent disruptions to China’s economy due to climate change could also have substantial impacts on the US economy through supply chain and imports/exports, as well as the global economy at large. Placing itself squarely in the center of the global economic network, China surpassed the US to become the world’s largest trader in goods in 2013. Although the trade balance is uneven, both economies are inextricably linked as the US exported $121 billion in goods to China last year, while China exported $440 billion to the US. This relationship gives both sides great incentive to keep the flow of trade moving. Global climate change adaptation efforts are essential to limiting future losses and cascading impacts to global trade and supply chains, but none are as critical as China’s.

Although global interdependencies can cause major trade flow disruptions as climate change impacts continue to worsen, the same interdependencies are also a strong catalyst for international cooperation. Now that China and the US sit on the same side of climate negotiations, hopes are that this new tone will set the stage for an international treaty on climate change at the 2015 UN COP in Paris.

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