Trump's ascension could see China taking lead in green diplomacy

China's 'responsible leadership' on climate is aligned with global economic competitive advantage

As Chinese president Xi Jinping became the first ever Chinese head of state to attend and open the World Economic Forum and Donald Trump takes over as the US president on Friday, China appears to be heading for a more important role globally. 

Analysts believe China’s "responsible leadership" on climate is closely aligned with global economic competitive advantage and the US is now poised to cede control of the global renewables market to China, which already has a significant lead.

In his address at Davos, Xi urged all signatories to climate deal in Paris last year to stick to the agreement. The statement is in contrast to what Trump has been saying. Trump has opening supported coal and natural gas while calling climate change concerns as a “hoax”. Analysts said this could mean US slipping in the race to secure a larger share of the booming clean energy market

Pete Ogden, Senior Fellow, Centre for American Progress, said, “Just a few days later, Donald Trump will be inaugurated President of the United States, and it is imperative that he does not forfeit America's position as a world leader -- and essential global partner -- in the fight against climate change." Ogden, who was also US chief of staff at Copenhagen and Obama’s climate advisor for two years, said over the last few years, the US and China have taken historic steps to drive domestic and international progress on growing the clean energy economy and combating climate change - efforts that culminated in the international Paris Climate Agreement. 

The US is world’s largest renewable energy investor with $87.8 billion investment in 2016, 31% of the global total. But this seems to be changing.

Chinese companies dominate the global renewable energy market - the world’s largest wind energy company and five of the top six solar firms are Chinese.

China’s foreign investment in renewables in 2016 included 11 deals that were each worth more than $1 billion, with a total value of $32 billion - a 60% increase on the previous year. China on January 5 announced it will invest $361 billion in renewable power by 2020 and has invested more than the US in renewable energy each year since 2012.

The US and China have been cooperating over recent years on climate change issues in contrast to their stand on the broader geopolitical agenda (e.g. South China Sea dispute, tension around creation of  the AIIB...etc), pointed out one analyst.

Sam Geall, associate fellow with Chatham House and executive editor, China Dialogue & research fellow at the Science Policy Research Unit (SPRU) at University of Sussex, said: "With Trump hostile to environmental regulation and a divided Europe, observers were hoping Xi Jinping illustrates China’s growing leadership role by highlighting the need for action on climate change. The Chinese leadership has shown it understands not only the climate and air pollution downsides of reliance on fossil fuels, but also the opportunities in the low-carbon economy, including greater efficiency, energy security and resilience."  

Given policy uncertainty in the United States, Chinese firms are increasingly well positioned to benefit from the commercial opportunities in store as the world shifts away from fossil fuels, he said.