Competition and cooperation: India and China in the global climate regime

WRITTEN BY MIRIAM PRYS-HANSEN AND SIMON KAACK

9 August 2022

Preventing the dangerous effects of climate change requires global cooperation. However, climate policy — like all policy fields — does not happen in a vacuum. Tensions in the border region of China and India, for example, affect all other areas of cooperation between the two states. Territorial conflicts have been present since the start of the postcolonial era and peaked again in 2020 during deadly skirmishes in the Galwan Valley. China’s increasing infrastructure build-up in the area poses a threat to Indian interests, as does the Belt and Road Initiative and the extended relations with Pakistan that come with it.

This growing polarisation of mutual security interests has strengthened India’s resolve to also engage in alliances with members who share a common interest in containing China. These include the Quad (Quadrilateral Security Dialogue), but also bilateral arrangements with partner states and the European Union. At the same time, India and China are both members of BRICS, in which they have jointly argued for significant reform of multilateral institutions — further to setting up new ones. An alignment of interests across multiple dimensions has also led to both China and India abstaining from voting at the United Nations Security Council and General Assembly regarding Ukraine-related resolutions. It is a central feature of the current global order that cooperation and conflict among state (and probably other) actors must go hand in hand.

India and China — shared climate vulnerability

The two Asian giants are among the most important actors for global climate cooperation, not only in terms of their position as the largest (China) and third-largest (India) emitters of contemporary climate gases, but also in their vulnerability to climate change. This shared fate has become even more visible in the past few months — for example, with a heat wave in India since March 2022, and widespread flooding in southern China in June 2022. The International Panel on Climate Change (IPCC) estimates that four billion people (nearly half of whom live in India and China) will live under conditions of severe water scarcity for at least one month per year, making these areas uninhabitable. Correspondingly, the pressure on local politicians to act on climate change and implement adaptation measures is rising.

The need to cooperate in matters of climate change requires partnerships among states, such as India and China, that in other contexts are competitors — if not rivals. This simultaneity of cooperation and competition is one of the key features of the emerging multipolar order and should take centre stage in both policy and academic research.

India and China also share important aspects of their climate diplomacy. This includes, for instance, a historically strong investment in the 1992 UN Framework Convention on Climate Change (UNFCCC) core norm of ‘Common but Differentiated Responsibilities’. The Convention shields developing countries from binding commitments to reduce CO2 emissions. In the run-up to COP21, China and India published a joint statement committing to more far-reaching measures by announcing cooperation on new technologies and ambitious nationally determined contributions (NDCs). Their concerted action aided the conclusion of the Paris Agreement signed a year later. Their potential for cooperation was also demonstrated at COP26 when both countries ensured that instead of committing to a coal phase-out, a reference to a coal phase-down was included in the final documents.

Mutual rhetoric-versus-action gap in climate policy

Both India and China have been lauded for their domestic climate efforts, as well as their leadership in South-South climate cooperation. Visible international achievements include Indian Prime Minister Narendra Modi’s commitment to making India net-zero by 2070 at COP26. It was the first time that India had made a concrete commitment to such a goal. Domestically, China’s 14th Five-Year Plan (published in March 2021) included key points on energy conservation and emissions reduction. Similarly, the Plan announced more ambitious NDCs for achieving the UN’s 2030 Agenda, as well as faster and deeper decarbonisation thereafter. Yet, when it comes to actually taking action on climate promises, both states have cast some doubt on whether they will fulfil their domestic commitments.

India is currently in last place on the Environment Performance Index (EPI). This evaluation mostly rests on the categories ‘Air Quality’ and ‘Biodiversity & Habitat’ — in which India ranks second to last out of 180 countries. A similar gap can be observed in China; one recent example of which is their ‘no overseas coal pledge’, announced in September 2021. This pledge has led to the cancellation of 15 pre-construction projects on coal plants abroad, holding a capacity of 12.8 GW already. At the same time, 18 other power plants with a total capacity of 19.2 GW are likely still to be built abroad, as they have already been approved and are thus in a ‘grey zone’.

Potential energy triangle between China, India, and the EU

To put it simply: if India and China join forces, the realisation of at least some global climate goals is more likely. In the absence of their mutual cooperation, meanwhile, global climate cooperation is certain to fail. A complex set of drivers may shape the actual relationship, and may also offer some leeway for third-party actors (including the European Union) to have an impact on the resulting climate policies. The issue of energy transitions is one of those policy fields in which complex drivers interact, and in which the EU has both economic and environmental interests in keeping everyone on board. While China is the largest solar manufacturer worldwide, India has ambitious solar targets in its national energy sourcing.

Both countries have built up their own industrial value chains in the sector, but Chinese companies dominate the market while India continues to source many components from abroad. In response to growing tensions in the Galwan Valley (and the COVID-19 pandemic), the Indian government started to promote the principle of AatmaNirbhar Bharat, which stipulates that there should be national independence in key industries and consequently a reduction in Chinese imports. Another vehicle for this can be found in the International Solar Alliance (ISA), which aims to mobilise USD 1 trillion in investment for solar energy solutions by 2030. China has not yet made a clear step towards joining the ISA — likely due to India’s dominant position within the alliance, which limits the former’s overall claim to global leadership in multilateral organisations.

However, solar is not the only energy field in which the two rivals are pursuing diverging goals with global implications. Interest and investment in green hydrogen as an energy source are increasing. In response, India launched the National Hydrogen Mission (NHM) in August 2021, which aims to develop the country into a global hub for hydrogen and fuel cell technology and will play a major role in helping to reach India’s target of energy independence by 2047. The People’s Republic also established a hydrogen forum — the China Hydrogen Alliance. In March 2022, China announced a target of producing up to 200,000 tonnes of carbon-free green hydrogen by 2025. Hydrogen in China is currently still produced from around 80 per cent fossil fuels, which increases the pressure for a rapid shift towards green hydrogen.

This race illustrates a new field of climate competition in which states vie for resources and financing, as well as international prestige. Both China and India have a key role to play here, although the current geopolitical situation seems more favourable to India’s ambitions. Following the Russian invasion of Ukraine, the EU is keen to achieve energy independence and forge new climate and energy partnerships. This is where India — as a formally democratic state with common strategic interests — comes in. A sign of this is the agreement on German-Indian hydrogen cooperation, reached during Modi’s visit to Germany in early May 2022. As part of a multilateral climate policy aimed at comprehensive decarbonisation (but also to bind countries of the Global South closer to Western industrialised nations), the G7 countries agreed at the recent summit in Elmau (Germany) to start negotiations on further ‘Just Energy Transition Partnerships’ with India and other actors. These include energy-policy reforms, as well as billions of US dollars in financial aid to reduce carbon intensity.

One of the next opportunities to turn energy partnerships into real climate-policy action is COP27, which will take place in November 2022 in Egypt. Recent developments in the Ukraine conflict have shown that, for instance, India is by no means willing to merely be a collaborator in EU interests. While the EU promotes ambitious climate goals, it also needs to take into account the specific ambitions and interests of its partners, including India. The EU is also well advised to balance its own interests with those of the other major emitters (especially from the Global South), and to keep dialogue formats open in order not to run into comparative cost disadvantages with its own climate goals — despite, for instance, major divergences with China on values.

Considering the urgency of global cooperation on climate change, it is important that major emitters find ways to cooperate in working towards a climate-safe future. Yet, strategic interests often undermine this need. This entails the danger of a new bloc forming in the UNFCCC — one which has less to do with climate-policy goals and more so with geostrategic considerations. Likely coalitions here would be the Western industrialised nations on the one hand, and China and Russia — both still heavily reliant on fossil fuels — on the other. The effect of this on global climate cooperation at large is potentially troubling indeed.

A longer version of the text can be found in GIGA Focus Asia No. 4.

DISCLAIMER: All views expressed are those of the writer and do not necessarily represent that of the 9DASHLINE.com platform.

Author biographies

Miriam Prys-Hansen is a Lead Research Fellow and Head of Research Programme 4: Global Orders and Foreign Policies at the German Institute for Global and Area Studies. Her research interests include climate diplomacy, BRICS, and especially India’s role as a global and regional power.

Simon Kaack is a research assistant at the German Institute for Global and Area Studies and is pursuing his master’s degree in Human Rights Studies at Lund University, Sweden. Image credit: Flickr/Ryan Adams.