China challenges Europe's climate change leadership

Europe has positioned itself as the global leader in the combat against climate change. The EU, banking on its key role in sustaining the Kyoto Protocol, its own policies to tackle climate change and advanced clean-energy technologies is expected to gain both soft power and commercial profit.

China is challenging this leadership. Not only is it criticizing the EU for not doing enough in the run-up to the Copenhagen Summit in December, it is also catching up with its own clean energy technologies and policies, in spite of a much lower development level.

China too sees itself as a global leader on climate change, and once more demonstrates to the EU that even soft power must be founded on hard capabilities. If Europe wishes to receive international esteem or turn clean energy into a new source of economic growth, it should put its money where its mouth is.

In spite of the stated aim of embracing climate change as a key area for advancing the faltering EU-China partnership, Beijing has been highly sceptical of the EU's role. It finds Brussels' objective of a 20 percent reduction in greenhouse gas emissions by 2020 ridiculously low and is asking for 20 percent extra.

China is accusing Europe of using environmental concerns to keep developing countries down, and argues that if it wants to prove otherwise Europe should provide more aid and transfer its precious know-how for free.

This critique stems from both genuine disappointment about Europe's commitments and the tough bargaining tactics it uses extract the maximum concessions possible. Even by the most cautious estimates, Europe's spending on clean energy falls behind China's annual budget that ranges between €30 billion and €40 billion.

The People's Republic is boosting its solar and wind energy capacity much faster than the EU. It is investing more in clean coal technologies than the 27 European member states together. In the past few years, Beijing has recognized that the development of alternative and efficient energy technologies is a matter of national survival. Dependence on foreign energy supplies is growing and undermines national security, and climate change threatens long-term social stability.

China now wants to get the technical knowledge it needs as fast and as cheaply as possible. The transfer of technologies from Europe could accelerate this process. China argues that the West should provide its technology for free to compensate for its historical contribution to global warming.

"In the past centuries, the Europeans have created most of the current problem, then they relocated their dirty industries to Asia, and now we have to pay them for cleaning it up," a leading Chinese expert has said, "this is not how we see collective responsibility."

For Europe the room to accede to China's demands is limited. Member states fear that tougher emissions targets will affect their industries and no one wants to pay that price in times of economic uncertainty. They are even less confident of the potential commercial gains of working with China.

True, the Chinese clean energy sector has enormous potential, but protectionist policies discriminate against foreign companies. In 2008, exports of goods related to wind and solar energy amounted to only €150 million. For each €100 of clean energy exports to China, Europe already gives about €85 million of aid in the same sector.

European companies are forced to produce most of the content of their goods within China. If they set up plants, they are obliged to form joint ventures and risk IPR (Intellectual Property Rights) theft. Beijing is able to get away with such practices not only by emphasising the historical pollution of Europe, but also by playing different European member states off against one another and pitting European investors against Japanese, Canadian or Australian peers.

One cannot blame the Chinese for hard bargaining. In fact, it is a wake-up call for the Europeans. Given Europe's dwindling international status and economic competitiveness, green energy is one of the few sectors where it has real strength.

But sustaining this will require a much more robust strategy with more ambitious targets for emissions, energy efficiency and technological innovation. A more determined and better coordinated policy in Europe will ensure that while countries like China benefit from technology transfer, economic reciprocity allows cooperation to broaden and be sustained.

The writers are research fellows at the Brussels Institute of Contemporary China Studies (BICCS). This comment is based on a more extensive study, which is available at www.vub.ac.be/biccs