As global clean energy champion, China has ‘responsibility’ to lead at COP28: IEA

China did the world “a big favour” by bringing down the cost of clean technologies like solar panels, said Fatih Birol, the chief of the International Energy Agency (IEA). But with increased economic clout also comes responsibility, he told Euractiv ahead of the COP28 international climate summit in Dubai.

The COP28 summit is expected to open with a pledge on Saturday (2 December) to triple the world’s installed renewable energy capacity and double energy efficiency by 2030, relative to 2022 levels.

If it materialises, that target will owe a lot to China, which made clean technologies like solar panels more affordable across the world, said Birol, the IEA’s executive director.

“China is the champion of clean energy. They are the world’s number one in solar, in electric cars, nuclear, hydropower – everything,” Birol told Euractiv in an exclusive interview ahead of COP28.

For Beijing, it is the story of a rise to global dominance in clean technology manufacturing, which started with solar panels more than a decade ago.

“Europe was a leader on solar 20 years ago but it dropped the ball and China took it over. And today 80% of the solar panels in the world are manufactured in China,” Birol said.

From the EU’s perspective, the risk is that this gets repeated in other sectors like electric vehicles and wind turbines, where Chinese manufacturers are gaining market share due to cheaper labour costs and access to abundant raw materials.

In September, EU Commission chief Ursula von der Leyen announced an anti-subsidy investigation into electric vehicles coming from China, saying prices of Chinese products were being kept “artificially low by huge state subsidies”.

A similar investigation is now being prepared for wind turbines, where Chinese maker Goldwind is rising to global dominance, undercutting European manufacturers.

According to Birol, there are lessons to be learned for Europe.

“Developing clean energy technologies is like running a marathon. The gold medal goes to the athlete who crosses the finish line after running 42 kilometres, not to the one who runs the first 10 kilometres the fastest.”

“I’m saying this because Europe now is a leader in heat pumps, in electrolysers, in offshore wind technologies. This time, Europe should be careful not to drop out of the race after the first 10 kilometres,” he told Euractiv.

China’s ‘responsibility’

But China’s growing economic clout – and its position as the world’s largest emitter of greenhouse gases – also gives Beijing new responsibilities to address the climate crisis and peak its emissions faster.

This means making a substantial contribution to international climate finance, such as the loss and damage fund that countries are expected to establish during the first day of COP28.

“China, like other countries that have the financial muscle, has a responsibility to develop clean energy at home and complement it with support to the lower income countries in other parts of the world,” Birol said.

Aid to poor countries will be one of the keys to success at COP28. With more cash for clean energy, developing countries will be more inclined to agree higher climate mitigation goals and quit fossil fuels earlier.

And according to Birol, there is an emergency.

Clean energy investments surged to $1.8 trillion this year across the world but “almost all the increase came from advanced economies and China” while investments were “flat” in emerging and developing countries where most of the growth in greenhouse gas emissions is expected to come over the next decades.

“I think clean energy financing in developing countries is the fault line of all the climate change issues in the world today,” Birol said.

“In Africa today, every second person does not have access to electricity, despite the huge potential for solar power there. To give you an idea, the total amount of solar electricity generated in entire Africa is half the amount of solar generated in the Netherlands. So this is a big injustice and something to be urgently addressed, in my view.”

Clean energy finance

Addressing this will require a lot of financial firepower, though, making Beijing’s contribution more essential than ever, Birol said – if only because of China’s economic weight.

According to the IEA chief, this should translate into more clean energy finance coming from multilateral financial institutions like the World Bank, the International Monetary Fund, the African Development Bank, the Asian Development Bank, and the European Investment Bank.

“We should find credible mechanisms to support the financing of the transition in emerging and developing countries,” Birol told Euractiv.

“If you want to build a solar plant in Africa, the cost of investment will be three to four times higher than in Europe because investors see Africa as risky business.”

“Therefore, there should be some de-risking mechanism coming from the World Bank and others in order to provide assurances to investors that they will get a return on their investment. And this mechanism needs to be solid enough,” he said.

For Europe, his proposal is to finance clean cooking programmes in Africa so that families there stop using primitive cooking stoves running on wood, which cause health issues and exacerbate deforestation.

“Fixing this problem once and forever would cost four billion euros. And today, total European ODA [official development assistance] to Africa is 25 billion euros,” Birol remarked, suggesting this was a low-hanging fruit for Europe.

Stopping coal

In Dubai, the EU and the US will also attempt to convince China and other emerging economies to stop fuelling climate change and “stop building new unabated coal power plants” – a point highlighted by US climate envoy John Kerry in a recent op-ed co-signed with Birol.

The IEA chief admitted that a deal to phase out coal would be difficult to reach at COP28 given the reluctance of developing countries and China to stifle their growth prospects.

“I think this will not be easy at all. But if countries agree with the Paris Agreement, there is no way not to reduce the fossil fuel use and still be in line with the Paris Agreement – they have to choose.”

Yet, Birol believes a solution can be found. “With some good conditions and good formulation around fossil fuel decline, we may get many countries on board, including China and India”.

“I am hopeful, but it is definitely a difficult area of discussion among countries.”

In any case, the IEA chief believes fossil fuels are doomed, whether or not a deal is found to phase out coal at COP28.

“I think fossil fuel use will decline around the world, including in China and India, in a few years’ time, regardless of the Paris Agreement, just based on economics and technological development.”

“I very much hope and expect that China’s coal consumption will start to peak soon and decline,” he said.

[Edited by Zoran Radosavljevic]

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