UN climate talks aren’t over yet but Australia has already chosen to sit out the biggest economic opportunity of our time. 

As week one of COP26 came to a close, heads of state had announced US$130 trillion in private funding for net zero, a 190 country and organisations pledge to phase out coal, a global methane reduction initiative and a 123-nation commitment to end deforestation.

To all of these major initiatives and the economic opportunities they present, Australia’s Prime Minister Scott Morrison’s answer was a firm “no thanks”.

On returning home, President Joe Biden went a step further and announced that the US and EU will negotiate the world’s first green trade agreement on steel and aluminium, preferencing their countries over those not taking equal levels of climate action. Hello Australia! 

UPDATE 11 November 2021: in a further update overnight, the US and China announced they would collaborate to tackle climate change, including by reducing methane emissions, protecting forests and phasing out coal.

“Xie described climate change as an ‘existential crisis’ and said agreement between the US and China on how to deal with global warming far outweighed their differences on the issue,” The Sydney Morning Herald reported in a statement that also points to a thawing on the testy relations between the two countries in recent years.

In the run up to COP, heads of state, economists and business leaders have all stated the immense size of the economic opportunity that is the global transformation to low and no carbon. The World Bank said the world will need to mobilise US$90 trillion for infrastructure to assist the economy to decarbonise by 2030. UN advisor and former Bank of England head Mark Carney said, “We now have the essential plumbing in place to move climate change from the fringes to the forefront of finance so that every financial decision takes climate change into account.” 

Blackrock’s Larry Fink said that the next 1000 billion dollar startups will be in climate tech.” Climate Bonds Initiative CEO, Australian Sean Kidney, said “There is money pouring out of our ears looking for green.” If you’re interested in making money, it seems, climate change is the place to be. Once again…Hello Australia! 

Prior to heading to COP26 Prime Minister Scott Morrison announced a long-awaited net zero by 2050 commitment with no 2030 interim targets and dependent on technology that currently haven’t been developed. It’s been called “a joke” by the Climate Council, a “scam” by Australian Labor, and “symbolic” by Bloomberg. 

Arriving at COP in Glasgow, Morrison was met with French President Macron accusing him of being a liar. Stories of Morrison leaking emails to counter the liar moniker left him looking foolish, out of his depth and politically damaged. 

By contrast, the leader of the nation that emits more carbon than the United States, India and the European Union combined — China — deciding to skip the climate conference was met with curiosity, intrigue and a bit of “how could you?” 

For China and President Xi Jinping, that’s politics as usual. Perhaps it’s about maintaining COVID protocols, or is he still smarting from the new nuclear submarine deal between the US and Australia? For whatever reason, President Xi limited his COP presence to a video link.

Importantly for Australia, whose biggest importing nation is China, Xi’s physical absence at the summit should not be mistaken for inaction on climate change. 

Besides a commitment to check national increases in greenhouse gas emissions in 2030 and reach net zero by 2060, China has quietly put together an extraordinarily comprehensive 37-point climate plan. 

In the weeks before COP, Chinese officials held briefings around the world, primarily for business partners, explaining not merely how they will combat climate change but how they will finance the process. 

Officials were remarkably candid about how they expect climate action to bolster China’s global “soft power” efforts. 

It’s worth noting that, in addition to China, India, the UK and Europe are well into the technical and financial details of their own comprehensive approaches to the global climate crisis. And on 6 November, the US finally passed a $1 trillion infrastructure bill that includes extensive investment in climate innovation and extreme weather resilience. 

In China, the official goal is to ensure that the country delivers on Xi Jinping’s pledge to be net zero by 2060. To that end, the country announced before COP that it will accelerate its efforts to control peak carbon emissions and reduce overall carbon intensity before 2030. 

But the Chinese are not just about tweaking rules to make up numbers. What’s most compelling about their approach is that climate action has been elevated to a singular level of national prominence reminiscent of truly historic Chinese Communist Party campaigns. 

During a climate conference in Kunming in early October, Xi announced: “We shall take the development of an ecological civilization as our guide to coordinate the relationship between man and nature.” 

Xi went on to exhort that the grand objective for China is to “live within planetary boundaries and build a green, low-carbon circular economy.” That’s a worthy goal for the whole world to keep in mind if he can deliver it. At his direction, it’s pretty clear that all of China is likely hard at work setting practical targets for that ecological civilization, planetary boundaries notwithstanding.

From the tone of Chinese officials, it’s clear the country sees an emerging green economy as the ticket to future domestic prosperity and global economic dominance. “We embrace a green world economy,” said one Chinese senior finance official, who described it as “digitally-driven and market-based.” 

In other words, expect Xi and the Chinese Communist Party to want to make “green” a critical element of all future financing, investing and trading with the aim to make China the world’s dominant player in eco and climate-related products and services. Chinese officials see green finance as having a “multiplier effect that will accelerate green financial innovation and scale a green economy”. 

The centerpiece of China’s efforts is a new carbon trading market that opened in July with little global attention. Immediately it became the world’s largest carbon trading scheme by volume and emissions. 

Officials said Chinese banks will be encouraged to offer green credit, a new generation of wealth managers will be selling green retail financial products and efforts will be accelerated to build a vibrant green capital market complete with derivative futures, swaps and options. 

The country’s officials are clear-eyed and serious about developing –– and dominating –– a global climate economy. Sustainable development, they say, will be a tangible factor in any escalating geopolitical competition. They made reference to economic tensions likely to intensify, particularly with the US. There is specific concern about President Joe Biden’s recent decision to order a strategic review of battery supply chains, and labeling lithium and cobalt as critical materials.

The glaring blemish on China’s green ambitions and something critically important to Australian exporters, is its massive use of coal. While Xi has said he will not backtrack on climate commitments by pursuing new coal and that he will end financing new coal abroad, he currently has no plans to end existing coal-fired power, which accounts for more than 60 per cent of the country’s energy supply. 

With 80 per cent of all global energy derived from fossil fuels, Chinese officials stress the need to balance new and traditional energy. “The dominance of traditional energies won’t be changed overnight given new energies are still toddling along,” said one official.  

China also hopes to use climate policy to bolster its soft power ambitions with much of the developing world including the Pacific. This means, Chinese officials say, balancing decarbonisation with “survival” and “development”.

 Any drastic reduction of carbon emissions cannot come at the expense of economic progress for developing countries. “Decarbonisation will threaten survival,” they say. 

The question now is how China’s private sector will live up to Xi’s new climate ambition. “We really have no idea how we will meet these climate goals,” one official said. “But at least we know what to do.”  

There is still much work for China ahead. But Australia would do well to recognise that China’s empty chair at the COP doesn’t mean the country isn’t stepping up to lead global climate action. Unlike Australia, the country seems to not only have a detailed climate plan but is looking to climate change as the way to make this century China’s century. 

Blair Palese is a climate change expert and managing editor of international outlet Climate & Capital Media. She founded 350.org Australia and was CEO for ten years. She was head of PR for The Body Shop and head of communications for Greenpeace International and Greenpeace USA.

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  1. Well, that was the nicest Sino spin piece I have EVER read. After a few opening jibes shaming Australia (after Morrison went to COP26 with an official Net-zero 2050 undertaking), the author launches into lauding China and the CCP, as they promise to net-zero carbon by 2060. In the mean time, they will continue to INCREASE their emissions for another 10 years using more and more coal, whilst Australia and the west continue to reduce their emissions and their use of cheap coal. An excellent Orwellian ‘doublespeak’ article.