Sino US Climate Pact: Context, text and subtext

The United States and China signed a Memorandum of Understanding (MoU) on bilateral cooperation on energy, climate change and environment during their recently concluded strategic and economic dialogue (SED). This MoU follows from a previous agreement, the Framework for Ten Year Cooperation of Energy and Environment (TYF) that was signed during the 2008 round of the SED. The TYF had noted that initial understanding and exploration of mutual interests could lead to a bilateral arrangement for cooperation in the area of climate change and energy by the 2009 SED, and it appears that the two sides have achieved this objective.

Though the MoU is not an action plan, it is important because it signals a certain convergence of interest between the two countries. Hitherto, both sides had disagreed on who begins first and who does how much on the pollution front. This was what had caused the near derailment of the Kyoto process, as the two biggest emitters had stopped short of binding commitments. Over the last couple of years though, both sides have taken small but firm steps that have been mutually appreciated leading to the dialogue on the issue of climate change. Beijing has been doing the painful work of closing polluting factories, especially around its major cities. It has also done some work on greening, and has created more space for non-governmental activism on environment which is seen as a sign of expansion of the democratic space in the country. Washington, for its part, has recently passed the Climate Bill in the House of Representatives which shows the Obama administration’s sincerity about action on climate change.

The MoU takes the areas of mutual cooperation to ten by merging TYF’s five areas of cooperation with the five initial task forces, and thus there is nothing significantly new. But at another level, if the TYF was an attempt towards exploring mutual interests, the present MoU is about turning these interests into cooperation. However, the MoU is a statement of the desirable situation. And in order make agreement possible, it did not discuss any specifics nor does it touch upon any contentious issues – perfectly understandable given the infancy of the bilateral climate dialogue. Thus, there is no emphasis on the quantity of reduction, no mention of binding deadline for emission cuts, or any mention of the possible and controversial carbon taxation of Chinese goods by the US, and so on.

By agreeing to cooperate with China on the issue, the US gets a share in China’s cleaner development initiative which is a huge market for the American technology sector especially in areas like carbon capturing and sequestration, sustainable transportation, and so on. However, it will still have to go through other hurdles relating to technology transfer to China including issues like intellectual property and pricing of technology. Similarly, China can claim a stake in American efforts towards efficiency in areas like the modernisation of electricity grids which is going to be a costly affair for the US. Thus, both sides have space to gain from each others’ expertise and needs. For China, the MoU also legitimises the seriousness of its efforts on the domestic front which have so far been criticised as inadequate.

One can look at this MoU from two different perspectives. One, that the two biggest emitters have recognised the issue and are willing to cooperate, following which one can hope that at Copenhagen they will no more be stumbling blocks in the way of the multilateral process. The second is the fear that the Sino-US bonhomie can strangulate the multilateral process on climate change by asserting the superiority of the bilateral process in which they could work on the basis of less stringent and more watered down norms governing emissions control. This agreement could be used along with the excuse of economic recovery to keep away from binding regulations.

When Secretary of State Hillary Clinton visited India in July, there was some talk of a similar agreement between India and the US. But it did not happen because of divergent views of the two sides on respective responsibilities. While India points to historical responsibilities, American representatives note the growth in carbon emissions in which India and China lead. Also, Prime Minister Manmohan Singh had to face serious criticism after he chose to agree to the 2 degree Celsius cap on temperature rise, without any assurance of technological or financial assistance from the West, during the G8 meeting. On the other hand, what China has done by getting into a bilateral understanding with the United States is that it has used its emissions and underdevelopment as a bargaining chip to get technology and resources that it needs. One will have to wait and see if this common interest between the two major players leads to a joint Sino-American perspective on climate change, since one part of the MoU also read that it “… should promote successful international negotiations on climate change”.