By Dan Murtaugh, John Ainger, and Alfred Cang
If China can go to the moon, asked the European Union’s climate commissioner in September, why isn’t it paying more toward climate action? Wopke Hoekstra’s quip laid bare a point of contention that will loom over November’s United Nations climate summit in Baku, Azerbaijan: How can the world’s second-largest economy be simultaneously “developed”—at the cutting edge of science and technology—yet still be officially classed as “developing”—allowed concessions on emissions and access to global funds? China likes to think of itself as a hybrid superpower, a compromise description that serves its diplomatic goals.
In climate finance, though, the position is untenable. If a nation is considered developed, it’s expected to pay into a $100 billion-a-year UN pot. For the US, this meant an estimated $9.5 billion in 2023. Developing nations not only have no such obligation but can also use the money to mitigate the impact of hotter summers and more frequent storms.
A key target in Baku is to agree on a post-2025 goal for climate finance. Developing nations—including China—want an enormous increase, to more than $1 trillion a year. For rich countries, already struggling to meet the current goal, it’s paramount to add more donor nations. And they’re looking to China.
US and European leaders will push for the country to join their ranks and begin paying up. But Beijing is set on defending its developing-nation status, which allows it to spend formidable amounts of money to advance global climate goals but on its own terms.
The case for classifying the economic and political powerhouse as developed is compelling. China is the biggest source of greenhouse gas emissions. It has more steel mills and oil refineries than any other nation, an expanding nuclear weapons arsenal and, as Hoekstra noted, a major space exploration program. The US House of Representatives last year voted unanimously that China should no longer be allowed to call itself developing.
The case for China remaining, on paper, as a developing country is no less persuasive, though. Despite steady increases in recent decades, its median income still falls below the threshold for developed countries. While the glittering skylines of megacities such as Shanghai and Shenzhen are home to some of the world’s wealthiest people, the country still has hundreds of millions living below the poverty line.
But the real disagreement here isn’t economic—it’s political. Since the Cold War, China has tried to carve out an identity as a champion of the emerging world. Even as its wealth has grown, the country has continued to push back against a world order dominated by Western powers. “It’s increasingly not about the development status of China, its per capita GDP or emissions,” says Li Shuo, director of the China Climate Hub at the Asia Society Policy Institute in Washington. “It’s really more about this deeply rooted lack of trust. Not just in global climate politics, the unfulfilled promises made by the global north, but then, on top of that, the ongoing tension between the US and China—leading to China trying to foster any opportunities to smear mud on the face of the other side.”
The climate finance debate dates to the 2009 Copenhagen climate summit. There it was agreed that developed nations, which had benefited from decades of polluting industries, should contribute $100 billion a year by 2020 to support climate action in developing nations, a goal not reached until 2022. With that target expiring in 2025, nations in November must come up with a new figure. The UN estimates the developing world needs $500 billion annually to enact its climate plans. Other analysts put the figure at anywhere from $1 trillion to $6 trillion.
“We recognize our responsibility,” says Jennifer Morgan, Germany’s special envoy for climate. “We just think that others that also have wealth and contributed emissions historically should also do the same.” Western nations will struggle to get China to edge toward adding to the global piggy bank. Climate diplomats who’ve spoken to their Beijing counterparts this year have said the country will not shift its position. Instead, Chinese envoys offer commitments that the country won’t draw from the fund, leaving money for poorer countries, and say it will boost its climate financing through other channels. “Instead of putting money into this big pot that it has little control over, it would rather spend the money in a way that it has a lot more say in,” says Yao Zhe, global policy adviser for Greenpeace East Asia in Beijing. But that leaves China to figure out a way to persuade wealthy nations to raise the funding target—without its help. To get there, Beijing may need to prove it’s paying its fair share in its own way, says Shuang Liu, China finance director at the World Resources Institute, an environmental think tank in New York.
