Yellen Believes US and China Should Lead Fight Against Climate Change

US Treasury Secretary Janet Yellen was on official tour to China from 6 to 9 July 2023. During her visit, she met with Premier Li Qiang, Vice Premier He Lifeng, as well as Finance Minister Li Kun and PBoC Party Secretary Pan Gongsheng. She also met with former VIce Premier Liu He and PBoC Governor Zhou Xiaochuan.

As the world top two emitters at the moment, the US and China have definitely a large role to play on the global climate agenda. Without active participation or even leadership from these two economic giants, all efforts towards controlling global warming would turn out to be futile.

As opposed to the visit by her colleague Blinken, US Treasury Secretary Yellen seems to develop a cordial rapport with Chinese Premier Li Qiang. The gaffe by President Biden when he publicly qualified Xi Jinping an “autocrat” while Blinken was doing his best to reset ties did not actually help. So Yellen is following up and hopes to mend ties using a feminine touch.

In preparation to the visit, Yellen publicly declared that it would be difficult for US to decouple from China, putting her in the good books with China. Here focus on #ClimateChange is motivated by the belief that this is one area where both sides can see in the same direction and partnerships can develop intensely.

Yellen urged China to join in multilateral climate institutions such as the Green Climate Fund or Climate Investment Funds along other countries. Developing countries have been clamoring for developed nations to make good on their promises for financing mitigation and adaptation measures. Therefore, if China were to lend its support to the initiative, it would certainly give it a much needed booster shot.

During Obama’s presidential tenure, US pledged USD 3 billion to the Green Climate Fund, which is a UN program targeted at supporting developing countries fight #ClimateChange. So far, US has only contributed USD 2 billion and Republicans have attempted to block any green financing in Congress.

On its side, China pledged USD 3.1 billion but only delivered 10% of the amount to date. China points out that it is already financing some #ClimateChange programs under the South-South Cooperation Framework. Under the UN, China is still considered a developing country and should be at the receiving end of Climate Funds. However, China is the world factory with a huge manufacturing base which makes China one of the carbon emitters globally.

As a matter of fact, the Chinese Climate Envoy XIE Zhenhua once declared: ” It is not the obligation of China to provide support under the current UN Climate Rules.”

At the G20, the US and China are already working closely together by co-leading the Sustainable Finance Working Group. US Climate Envoy and former President John Kerry plans to visit China later in July 2023 to specifically discuss items on the Climate Agenda. Next week, President Biden will soon be in London to attend conference in London centered around #ClimateFinance.

China is installing solar power at an amazing rate and even expanding its network of nuclear power plants in order to reduce its footprint. It is also aggressively pushing the manufacturing and adoption of Electric Vehicles (#EV) to reduce carbon emissions. At the same time, China has been continuing to build new coal-fired thermal power stations. Its goal to achieve #NetZero by 2060 is good but some believe China could do much better.

At the end of the visit, the Chinese Ministry of Finance issued a statement about the talks with US Treasury Yellen. The Chinese side expressed concerns about the raised tariff barriers and export controls, sanctions on certain Chinese companies, tighter restrictions on US ODI into China, and bans on products from Xinjiang.

On her side, Secretary Yellen proposed China to buy more of US Treasury Bonds. However, no immediate agreement was reached and the Chinese feel that without ‘normalization and fair competition’, it would be difficult to proceed. However, US Climate Envoy John Kerry is expected in the Beijing very soon to carry forward the Climate talks.