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11. China’s National ETS and the Power Market: How the ETS Can Achieve Significant Emission Reductions

Author:
Yan Qin, Alistair Ritchie, and Yi Chen
Publication Date:
10-2022
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China’s newly established national emissions trading system (ETS) is intended to serve as the primary tool in assisting China in meeting its "dual carbon" target of CO2 peaking before 2030 and carbon neutrality by 2060. It is the largest ETS globally, accounting for 40 percent of China's CO2 emissions and more than 10 percent of worldwide emissions, with the potential to double its current size once industrial sectors are added. In its initial phase, it covers the power sector, particularly more than 2,000 enterprises operating coal- and gas-fired power stations. However, some critical challenges need to be overcome before the ETS can fulfill its emissions reduction potential in the power sector by driving fuel switching away from coal and toward renewables and low-carbon fuels through the carbon price. China's National ETS and The Power Market: How the ETS Can Achieve Significant Emission Reductions examines these challenges in relation to both the ETS itself and its interactions with the power market. It also proposes a policy pathway to address these challenges and unlock their potential to drive significant and cost-effective CO2 emissions reductions in the power sector and raise large amounts of revenue to fund the transition to carbon neutrality across the expanding ETS sectors.
Topic:
Climate Change, Markets, Carbon Emissions, and Energy
Political Geography:
China and Asia

12. Catalyzing India’s Climate Ambition

Author:
Patrick Suckling
Publication Date:
06-2021
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China’s recent commitment to reach carbon neutrality before 2060 means that for the first time ever, India is on track to become the world’s largest emitter. At a time that demands urgent action if we are to stay within the goals of the Paris Agreement, this brings into contrast India’s traditionally bifurcated approach that it has used to guard against taking greater action in light of the responsibility of the developed world to lead the way. Nevertheless, in recent decades, a political appetite for climate action has been growing in India, including reinforcing its global leadership credentials at the behest of Prime Minister Narendra Modi. Climate-related disasters have also driven public support for more constructive engagement by Delhi. However, this appetite does not yet match growing international expectations for Indian action, as momentum for global climate action and ambition accelerates rapidly around the world in the lead-up to the COP26 Climate Conference in Glasgow in November 2021. The election of U.S. President Joe Biden and recent commitments to net-zero by other Asian economies such as Japan and Korea underscore the weight of growing expectations on India. A sophisticated and holistic strategy to catalyze climate ambition from India is needed if the world is to succeed and help the country navigate a new low-carbon development model. India’s recent establishment of an Apex Committee on the Implementation of the Paris Agreement and its commitment to produce a long-term strategy to reduce emissions provide two particular openings for this even if signals elsewhere are mooted, including the impact of India’s economic response to COVID-19. And at a geopolitical level, India’s relations with China can help reinforce the need for action, and so too can India’s shifting relations with the G77 group of developing nations. This strategy must involve a mix of both greater political and policy engagement and deeper technical and financial support to help accelerate action — including through helping unlock greater private finance domestically. The recently announced U.S.-India Climate and Clean Energy Agenda 2030 Partnership is an excellent first step in this regard. This Asia Society Policy Institute issue paper, Catalyzing India's Climate Ambition, authored by Senior Fellow and former Australian High Commissioner to India and Ambassador for the Environment Patrick Suckling, sets out how the wider international community should sensitively, constructively, and intelligently now work with India to catalyze greater climate ambition in the lead-up to COP26 and beyond.
Topic:
International Relations, Climate Change, Carbon Emissions, and Decarbonization
Political Geography:
China, South Asia, and India

13. The Avoidable War: The Decade of Living Dangerously

Author:
Kevin Rudd
Publication Date:
02-2021
Content Type:
Commentary and Analysis
Institution:
Asia Society
Abstract:
The year 2020 was a devastating one, but also a year of great change and transformation as the world adapted with difficulty to meet challenges largely unprecedented in living memory, and the trends of global power appeared to shift dramatically. And it was a revelatory year — one that pulled the lid off the true extent and meaning of our globalized, interconnected world, revealed dysfunction present in our institutions of national and international governance, and unmasked the real level of structural resentment, rivalry, and risk present in the world’s most critical great power relationship — that between the United States and China. 2020 may well go down in history as a great global inflection point. It is thus worth looking back to examine what happened and why and to reflect on where we may be headed in the decade ahead. The Avoidable War: The Decade of Living Dangerously, the third volume of ASPI’s annual Avoidable War series, does precisely that. It contains selected essays, articles, and speeches by Asia Society and ASPI President the Hon. Kevin Rudd that provide a series of snapshots as events unfolded over the course of 2020 — from the COVID-19 pandemic, through an implosion of multilateral governance, to the impact on China’s domestic political economy. Finally, it concludes with a discussion of the growing challenges the world will face as the escalating contest between the United States and China enters a decisive phase in the 2020s. No matter what strategies the two sides pursue or what events unfold, the tension between the United States and China will grow, and competition will intensify; it is inevitable. The Chinese Communist Party is increasingly confident that by the decade’s end, China’s economy will finally and unambiguously surpass that of the United States as the world’s largest, and this will turbocharge Beijing’s self-confidence, assertiveness, and leverage. Increasingly, this will be a “decade of living dangerously” for us all. War, however, is not inevitable. Rudd argues that it remains possible for the two countries to put in place guardrails that can prevent a catastrophe: a joint framework he calls “managed strategic competition” that would reduce the risk of competition escalating into open conflict.
Topic:
Foreign Policy, Power Politics, Governance, and COVID-19
Political Geography:
China and United States of America

14. Understanding American Voter Attitudes Toward U.S.-China Climate Cooperation

Author:
The Asia Society Policy Institute and Data for Progress
Publication Date:
02-2021
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
After four years of U.S. absence from the global climate stage, a majority of voters—including a plurality of Republican voters—agree the United States should take ambitious actions to address climate change and lead the world in tackling the climate crisis, even if China and other countries do not increase their own ambition. With the exception of nuclear disarmament, a majority of voters see climate change as the most important issue for the United States and China to cooperate on—more so than tackling COVID-19. At the same time, competing with China to become the world leader in the development of clean energy technologies drives up support among voters across the political spectrum for the United States ramping up its own clean energy industry. Similarly, voter support for the United States enhancing its climate ambition increases if China takes additional steps. Despite voters expressing apprehension toward partnering with China on innovation and trade in a number of sectors like automobiles and healthcare, voters are also very receptive to a potential partnership around clean energy development. However, voters want President Biden to also uphold his campaign promise to devise policies that will hold China “accountable” for its climate commitments. Voters support this more than any of Biden’s other proposals for global climate action. With this in mind, voters support the idea of the United States providing competitive financing for renewable energy projects to Belt and Road Initiative countries and instituting a carbon border tax as possible ways to increase pressure on China to do more both at home and abroad. For instance, an overwhelming majority of voters think China should aim to achieve carbon neutrality much sooner than 2060. Notably, a near majority of voters are also supportive of the U.S. military and Chinese military working together even more to assess climate risks and improve disaster preparedness around the world. Though President Biden may face some roadblocks from Republicans who are less supportive of U.S.-China climate cooperation than Democrats and independents, messaging around maintaining U.S. leadership over China on climate action and clean energy development clearly resonates with Republican voters.
Topic:
Foreign Policy, Climate Change, Public Opinion, Voting, and COVID-19
Political Geography:
China and United States of America

15. Nature and Nurture: How the Biden Administration Can Advance Ties With India

Author:
Anubhav Gupta
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Asia Society
Abstract:
The state of the U.S.-India relationship is strong, but two critical developments in 2020 have created a new inflection point for the relationship. Growing apprehension in both New Delhi and Washington about Chinese aggression has created the strategic convergence long sought by a U.S. defense establishment eager to enlist India to balance China. On the other hand, devastated by the Covid-19 global pandemic, the United States and India face challenging economic recoveries amid growing protectionist sentiments at home that could diminish the relationship’s promise. Having won the U.S. presidential election, Joe Biden has an opportunity to consolidate and accelerate the relationship by creating a substantive and broad partnership with India, which can undergird U.S. policy in Asia and support U.S. global interests for decades to come. this paper provides a blueprint for how the Biden administration can actualize what previous presidents have deemed a “natural partnership.”
Topic:
Foreign Policy, Bilateral Relations, Partnerships, COVID-19, and Joe Biden
Political Geography:
China, India, and United States of America

16. ASPI NOTES for the Biden Administration

Author:
Wendy Cutler, Anubhav Gupta, Nathan Levine, Richard Maude, Elina Noor, Jing Qian, Alistair Ritchie, Kevin Rudd, Daniel R. Russel, and Thom Woodroofe
Publication Date:
01-2021
Content Type:
Policy Brief
Institution:
Asia Society
Abstract:
The Asia Society Policy Institute (ASPI) Notes for the Biden Administration is designed to offer creative and practical ideas for how the United States might re-engage in the Asia Pacific, particularly in the critical first six months of the new administration. The administration will immediately face a range of challenges and opportunities in this important region, including on climate change, public health, and the global economy. President-elect Biden and his team have signaled the need for the United States to lean into and deepen its engagement with friends and allies. This will mean leveraging the Asia Pacific’s multilateral architecture as well as using global forums such as the G20 and international organizations. Trade policy will also figure importantly in any effort to renew and expand America’s engagement. Additionally, the U.S.-China relationship will loom large from the outset. Tensions with China will surely linger, whether in the South China Sea or the Taiwan Strait, complicating the task of establishing a new framework of “managed strategic competition” – a combination of each side's "red lines," continued competition, plus agreement on areas of mutually beneficial cooperation. ASPI Notes for the Biden Administration provides a diverse package of 20 actionable proposals to address specific risks or objectives in reconnecting with the Asia Pacific. These notes carefully reflect the views, perspectives, and expectations of the region itself – a hallmark of ASPI’s approach.
Topic:
Foreign Policy, Climate Change, Economy, Trade, Public Health, and Joe Biden
Political Geography:
China, Taiwan, Asia, Asia-Pacific, and United States of America

17. Curbing State-Driven Trade Policies: How to Craft New & Effective Approaches to Counter Distortive Practices

Author:
Wendy Cutler
Publication Date:
07-2020
Content Type:
Policy Brief
Institution:
Asia Society
Abstract:
Much attention has been focused on China’s unfair intellectual property practices and the imbalance in the U.S.-China trade relationship, but equally troubling are large-scale Chinese industrial subsidies, the behavior of state-owned enterprises (SOEs), and in general, the oversized and opaque role of the Chinese state in the economy. While the U.S-China phase one trade deal tackled some important sources of bilateral tension and aimed to boost Chinese purchases of U.S. goods and services, it was silent on industrial subsidies and related matters, leaving them for the next phase of negotiations, the fate of which is now in question. U.S. concerns on these matters are shared by other trading partners including the European Union (EU) and Japan. Yet despite widespread disapproval of such practices, building new global rules to combat subsidies has proven challenging. This is due to several factors, ranging from gridlock at the WTO, differences of views among like-minded countries on the required level of ambition, and uncertainty as to how best to approach the enormous complexities in China’s subsidies and related policies. The Organization for Economic Cooperation and Development (OECD) has sought to unpack this complexity, conducting recent studies of Chinese subsidies in two key sectors: aluminum and semiconductors. Both studies illustrate how Chinese subsidies are not simple cash handouts from the state to protected firms so that they can sell at favorable and distorting prices. The OECD finds subsidies can take various forms, including downstream or upstream help that trickles up or down to the firm that’s intended to benefit. They can take the form of favorable equity or debt purchases or bonds provided at below-market rates. And with interconnected global value chains, subsidies can effectively be granted covertly, intended to benefit one firm that might be several links away along the chain. In China, the problem is compounded by an opaque “party-state” structure that obscures not only the recipients of subsidies, but also the source. According to Mark Wu, a Harvard Law School professor who previously served as the Director for Intellectual Property in the Office of the U.S. Trade Representative, subsidies not only flow directly from government bodies in Beijing, but also indirectly through informal responses to directives — sometimes even left unsaid, but understood — from the Chinese Communist Party. Against this backdrop, the Asia Society Policy Institute (ASPI) convened two roundtables in the fall of 2019 and the spring of 2020 to discuss how best to build a new rules-based infrastructure that might combat such subsidies and prevent trade-distorting results such as unfair competition, market access barriers, and, above all, overcapacity in global markets. Experts from the private sector, think tanks, governments, and academia weighed in with possible solutions, which included: Negotiating new rules in the WTO; Using the WTO dispute settlement system, despite its often-discussed flaws; Forming ad hoc rules-based approaches, where possible, like the U.S-EU-Japan trilateral initiative; Plurilateral negotiations conducted on a sector-by-sector basis; Forming coalitions of like-minded trading partners to establish an alternative model, much in the way that the Trans-Pacific Partnership (TPP) was framed. During the roundtables, most experts agreed that there is no silver bullet that solves the subsidy and related issues on its own. And most agree that, left unaddressed, the problem is likely to deepen. The COVID-19 pandemic might even exacerbate it by leading to more state involvement in economies around the world and making it hard to discipline Beijing’s practices. Recognizing all of these real challenges that the international trade community faces, the roundtables reached the following key conclusions: Transparency on the scope, level, and nature of industrial subsidies is vital; Efforts to publicize the ongoing work in these areas, particularly that being done by the OECD, should accelerate; Turning research into tangible new policies is a key step; and Persuading China to agree to updated rules will be necessary, given that China is a singular contributor to overcapacity.
Topic:
International Trade and Finance, Treaties and Agreements, Trade, Industry, and WTO
Political Geography:
China, Asia, North America, and United States of America

18. U.S. and China Climate Goals: Scenarios for 2030 and Mid-Century

Author:
Asia Society Policy Institute and Climate Analytics
Publication Date:
11-2020
Content Type:
Special Report
Institution:
Asia Society
Abstract:
In September 2020, President Xi Jinping announced new goals for China to reach carbon neutrality before 2060, as well as to strengthen its existing 2030 commitments under the Paris Agreement. With these announcements, China has signaled a move to join the European Union—as well as the United States under a Biden administration—in leading long-term climate action among the big emitters. Our analysis demonstrates that if China’s new long-term goal covers all greenhouse gas (GHG) emissions, and not just carbon dioxide (CO₂), this could bring the country within reach of the emissions reductions required by mid-century for its actions to be in line with the Paris Agreement’s long-term goal of limiting average global temperature increases to 1.5°C. However, if President Xi’s announcement is only meant to cover CO₂, then China would need to achieve carbon neutrality around 2050 for this to be compatible with the Paris Agreement.1 Either way, China’s short-term actions will also need to be quickly brought into line with its new long-term trajectory. This includes doing more than simply peaking CO₂ emissions before 2030 as President Xi foreshadowed. Instead, our analysis demonstrates that China would need to peak its emissions by 2025 and rapidly reduce these thereafter to be compatible with the Paris Agreement. This also implies a need for significant adjustments to the other quantifiable targets identified in China’s existing Nationally Determined Contribution (NDC) under the Paris Agreement and the ramping up of action to achieve these. Reducing coal-fired power generation quickly and phasing it out entirely by 2040 would be an important step toward achieving this early peak and rapid reductions. Under the Trump administration, the United States has reneged on past climate action promises and rolled back existing policies resulting in an increase in emissions compared with the Obama administration. As a result, this report highlights that even under a Biden administration, the United States is likely to miss its previous 2025 target under the Paris Agreement. However, a Biden administration means that the United States now has the potential to reverse the Trump administration’s rollbacks and make a significant contribution to closing the Paris Agreement’s ambition gap in a new 2030 NDC. Indeed, by taking the initiative to reboot U.S. action in line with the Energy and Climate Package touted by President-elect Biden during his campaign, including its goal to reach net-zero emissions by 2050, U.S. emissions could be reduced substantially by 2030.2 For example, our analysis indicates that if the Biden campaign’s policies were to be fully implemented with the support of Congress (see below), and continue to be supported by strong subnational action, they could bridge more than half of the U.S. share of the global ambition gap by 2030 through reducing emissions by up to 38%–54% below 2005 levels (GHGs, including land use, land-use change and forestry)3. This would also reduce estimates for average global temperature increases in 2100 by 0.1°C, on top of the 0.2°C–0.3°C reduction achieved by China’s recent announcement. As this report shows, President-elect Biden’s plan to decarbonize the U.S. electricity system by 2035 would represent by far the biggest contribution to this effort and is in line with the Paris Agreement temperature goal. It would result in savings of ~1,350 MtCO₂ out of a total abatement potential of ~1,810 MtCO₂e [1,630–2,100] in 2030 across his Energy and Climate Package. However, this report also estimates that potentially only half of this potential could still be achieved through Executive Authority in the event of Congress not supporting action, although this estimate carries a large degree of uncertainty. We also outline how additional emissions reductions could come from action in other areas, including freight transport and industry—with the electrification of end-use sectors and green hydrogen important opportunities to achieve this. If the United States and China fully implement these ambitious goals and are able to achieve net-zero GHG emissions around mid-century, it would be a monumental step forward toward bringing the Paris Agreement goals within reach. It would also mean that for the first time more than 60% of the world’s emissions are in countries with a clear pathway to decarbonize their economies. However, achieving the goals will require bold action in all sectors of the economy, with an early coal phaseout being paramount for both countries.
Topic:
Climate Change, Carbon Emissions, Paris Agreement, and Decarbonization
Political Geography:
China, Asia, North America, and United States of America

19. Weaponizing the Belt and Road Initiative

Author:
Daniel R. Russel and Blake Berger
Publication Date:
09-2020
Content Type:
Working Paper
Institution:
Asia Society
Abstract:
China’s Belt and Road Initiative (BRI), launched by President Xi Jinping in 2013, is a massive international infrastructure program involving nearly 140 countries with over an estimated $1 trillion in projects related to energy, transportation, digital networks, and trade. Chinese leaders frame the BRI as “win-win” cooperation focused solely on development and connectivity. Beijing has gone to great lengths to minimize BRI’s links to the People’s Liberation Army and to downplay the initiative’s geostrategic overtones. Nevertheless, many governments have become worried about ulterior motives behind BRI projects, many of which have dual-use commercial-military capabilities and are increasingly connected to Chinese digital technologies and networks and satellite systems. The Asia Society Policy Institute’s – Weaponizing the Belt and Road Initiative – examines key BRI projects in the Indo-Pacific and explores relevant Chinese doctrine, the involvement of the People’s Liberation Army with BRI, and assesses the potential military and geostrategic advantages to China from BRI ports and other projects. This project is led by ASPI Vice President for International Security and Diplomacy Daniel Russel, with support from ASPI Senior Program Officer Blake Berger. The project and the report benefitted from advisement from experts and officials in Singapore, Australia, Japan, Vietnam, China, and the United States as well as to the expert advisory group whose distinguished members generously shared their time and wisdom to support this effort.
Topic:
Development, Geopolitics, Belt and Road Initiative (BRI), and Strategic Competition
Political Geography:
China and Asia

20. Reengaging the Asia-Pacific on Trade: A TPP Roadmap for the Next U.S. Administration

Author:
Wendy Cutler
Publication Date:
09-2020
Content Type:
Special Report
Institution:
Asia Society
Abstract:
In the aftermath of a presidential election, it’s not unusual for an incoming administration to revisit policy choices made by the previous administration or, in the case of reelection, during the first term. One decision that strongly merits another look after November is the U.S. withdrawal from the Trans-Pacific Partnership (TPP), a regional trade agreement that the United States signed with 11 other countries in 2016. FULL REPORT Download In recent years, the case for U.S. participation in the TPP has only become more compelling as the political and economic importance of the Asia-Pacific region has grown and concerns about Beijing’s economic model have mounted. But is there a path for the United States to return to the TPP or to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the 11 remaining countries finalized without the United States? This report by ASPI Vice President Wendy Cutler, Reengaging the Asia-Pacific on Trade: A TPP Roadmap for the Next U.S. Administration, examines the options that the next administration would have for reengaging the CPTPP countries on trade in light of domestic considerations and developments, as well as input from the CPTPP countries. The report concludes with a road map that offers concrete recommendations for how the next administration, Democrat or Republican, could proceed, including advocating a narrower trade negotiation as a first step to rebuilding trust and to lay the groundwork for pursuing a full-fledged CPTPP re-entry.
Topic:
Trans-Pacific Partnership and Trade
Political Geography:
China, Asia-Pacific, and United States of America