China is not obligated to provide financial aid but has pledged to “make available’ $3.1bn to other developing countries
The delivery of a multi-billion climate fund pledged by China nearly eight years ago to support the Global South remains “unclear”, experts have told Climate Home News.
Some experts suggested that China has “only delivered 10%” of the China South-South Climate Cooperation fund since it was announced eight years ago, calling the pace “quite slow”.
Others said it would be “hard to tell” how much of the pledge has been fulfilled due to a lack of official updates.
Li Shuo, senior global policy advisor at Greenpeace East Asia, described the fund’s details as “confusing” but believed that China “has not delivered as much as it promised”.
In 2015, China’s President Xi Jinping announced the fund during a state visit to the USA, months before unprecedented US-Chinese climate cooperation helped the world agree to the Paris agreement.
Xi Jinping and Barack Obama in California in 2015
At the time, Xi said that China would “make available” 20 billion yuan ($3.1 billion) to help other developing countries tackle climate change. But he did not set a deadline for the fund’s delivery.
Delivery ‘not as promising’
China’s climate envoy Xie Zhenhua said at Cop27 that China had provided 2 billion yuan ($310 million) to other developing countries, which are otherwise known as the Global South, to reduce their emissions and adapt to climate change.
Xie did not give more information about the figure. But E3G, a thinktank focused on climate change policy, interpreted Xie’s words as an update on the China South-South Climate Cooperation Fund.
It said in a recent analysis that China’s climate finance to the Global South “falls short” of its own pledge because the nation has delivered just one-tenth in seven years.
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Byford Tsang, senior policy advisor at E3G, told Climate Home News that “at the current pace, I think it would take quite a long time [for China] to fulfil its pledge”. But he acknowledged that, as a developing country, China is not obliged to provide any formal climate finance.
Although it is possible that Beijing would give “an injection” to the fund to accelerate its delivery, “based on what has been achieved so far, it was not as promising as people were thinking during the start”, Tsang continued.
Institutional challenges
Tsang of E3G pointed to “institutional challenges” as reasons for the fund’s sluggish progress because it is managed by different ministries, which makes it complicated to disperse.
According to a study published by China’s National Centre for Climate Change Strategy and International Cooperation (NCSC), an affiliation to the Ministry of Ecology and Environment “multiple departments” are “involved” in China’s south-south cooperation on climate change.
“Apart from the newly established Ministry of Ecology and Environment (established in 2018), it also involves China International Development Cooperation Agency, the ministries of commerce, finance and foreign affairs, as well as the National Development and Reform Commission,” the study said.
It added that the China South-South Climate Cooperation had yet to be set up for various reasons, including lack of coordination – a fact that “had affected the progress of the south-south climate change cooperation and international reputation” of China.
“A common understanding is that the promised amount would need to be distributed by the fund. If the fund has not been established, then its delivery is an open question,” Li of Greenpeace East Asia told Climate Home News.
He said the overall situation is “unclear” because China has not reported the fund’s progress regularly. “On the other hand, China is not obliged to give such reports internationally,” he added.
Duan Hongbo is a professor at the School of Economics and Management at the University of Chinese Academy of Sciences. He said that the politics and attitude of potential recipient countries – most of which are the least developed in the world – also play a role. For example, some countries constantly change their points of contact and others “are more interested in projects that would boost their economy than combat climate change.” The Covid-19 pandemic also delayed global cooperation, he said.
But some observers urge China to make bigger strides. Belinda Schäpe, policy adviser at E3G, told Climate Home News: “China hasn’t put a timeline on the fund. But for it to actually have an impact, it should happen faster.”
As China sees the south-south climate cooperation as a way to “portray itself as the responsible leader power”, to keep that leadership of the developing world and its credibility as the climate leader, accelerating the delivery of its climate fund is the “rational next step”, she added.
Ten-hundred-thousand
The Chinese government has not specified how the fund would be spent, but experts from a Chinese state-affiliated thinktank NCSC said China has been funnelling it through the so-called “Ten-Hundred-Thousand” projects announced by President Xi at the opening ceremony of the 2015 Paris climate talks.
Xi said that from 2016, China would “launch cooperation projects to set up 10 pilot low-carbon industrial parks and start 100 [emissions reduction] and [adapting to climate change] programs in other developing countries and provide them with 1,000 training opportunities on climate change”.
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Xi’s statement clarified the scope of the fund, wrote Li Yan, an NCSC analyst, in a 2020 report.
China said in its most recent climate change “white paper” that by July 2022, it had signed 43 agreements on climate change cooperation with 38 developing countries, agreed to build low-carbon industrial parks in Laos, Cambodia and Seychelles, and carried out 40 emissions reduction and adaptating to climate change projects in more than 30 nations.
The paper said China had allocated 1.2 billion yuan ($170 million) to the south-south climate change cooperation by last July but did not explain whether the money had been dispersed through the fund. It also remains unclear if Xie’s statement was an update for this figure.
A fund ‘out of goodwill’
Developed countries – including the US, Canada, Australia, Japan and much of Western Europe — have been condemned for failing to live up to their long-standing promise of providing $100 billion a year to developing countries by 2020 to help the latter reduce and adapt to the impact of climate change.
The pledge was made in 2009 to reflect wealthy nations’ historical responsibility for causing climate change during their industrialisation. They are responsible for half of all historical carbon dioxide (CO2) emissions globally despite always being a small minority of its population.
As China is considered a developing country, it is not obliged to provide climate finance, according to the principle of the United Nations Framework Convention on Climate Change, the foundation of international climate negotiations which was set up in 1992.
In theory, it is also eligible to receive aid from developed countries. But at the Copenhagen climate talks in 2009, China said that small island states, the least developed countries and African nations should be “prioritised” in receiving financial support, indicating that it would not fight for climate finance shelled out by developed countries.
Furthermore, China launched its South-South Cooperation on Climate Change mechanism in 2011 to support other developing countries. Since then, it has provided aid mainly through donating materials, sharing knowledge and offering training programmes.
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Duan told Climate Home News that it was “crucial” for any evaluation of the fund to understand that China’s position and obligations are different from that of developed countries.
“China is not responsible for providing any climate finance to developing countries,” Duan said. “Its commitment is completely voluntary and out of goodwill. Therefore, any contribution [from China] should be viewed as a positive impact.”
Regarding the “confusing accounts” of climate finance, Duan said that “not only China, but the entire global climate community” is facing this problem.
“There are different ways to calculate climate finance depending on how a country defines its scope and how much pressure it is under to deliver it,” he explained.
