This commentary was first published in The Hill.

The future sustainability of the Earth cannot do without the coordinated actions of its two largest carbon polluters — the United States and China.

The most recent highlight in that realm is the U.S.-China Joint Glasgow Declaration on Enhancing Climate Action in the 2020s at the UN climate change conference COP26 in November 2021. The joint statement, which came during a turbulent time in U.S.-China relations, was both surprising and valued. The declaration reaffirms both nations’ commitment to “tackling [climate change] through their respective accelerated actions in the critical decade of the 2020s, as well as through cooperation in multilateral processes.”

The declaration also calls for “concrete actions in the 2020s to reduce emissions aimed at keeping the Paris Agreement-aligned temperature limit within reach,” including in the areas of methane reduction, decarbonization and forest protection. 

While the declaration represents a promising step forward and offers reassurances about new momentum for sustained future cooperation, it offers few details regarding concrete plans, nor the opportunities and challenges to enact and implement those plans.

Last fall, we at Stanford University partnered with Peking University to convene a series of discussions on a broad range of themes around U.S.-China collaboration on climate change, such as global sustainable finance, corporate climate pledges, as well as opportunities and challenges for the acceleration of decarbonization in both countries in general — both nationally and by sector — with particular emphasis on power, transportation and industry. The outcomes and insights were synthesized in a report on how to accelerate decarbonization in China and the United States, in which we highlight two urgent recommendations to facilitate constructive cooperation between both nations as they tackle growing environmental challenges.

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First, we need open-science research and development (R&D) collaboration.

Second, we need to be explicitly cognizant of political and institutional constraints.

This is necessary in order to translate promises into progress while protecting social benefits and their equitable distribution amid the green energy transition. As noted in both the joint declaration and our report, bilateral dialogues so far remain very high-level. We need future discussions and workshops at the sectoral and local levels to develop concrete plans. In enacting and implementing concrete plans, political and institutional constraints can pose real obstacles, as demonstrated by China’s past and ongoing efforts to control air pollution.

Hence, strong support from both national and local governments will be critical. As a first step, we need to gain a good understanding of who the relevant actors are in both policymaking and implementation and the incentives they face.

In this period of transition when there are still regional mismatches between energy supply and demand, it is too easy to let short-term needs push climate mitigation goals to the bottom of the barrel to address regional energy shortages. In both countries policymakers and those charged with implementation face multiple and sometimes conflicting goals. The prioritization of goals is shaped by incentive structures. Fostering incentive structures conducive to decarbonization is particularly important during the transitional period when consensus around goals and priorities is less clear. 

Furthermore, it is time to standardize standards. A recurring theme across our discussions is the need for shared, clearly specified regulatory frameworks and standards across both nations. Harmonizing standards will expedite trade, validation, accounting, climate pledges and environmental, social and corporate governance (ESG) evaluation.

Only if there is standardization can organizations be required to follow unified disclosure practices for making available important information like the amount of carbon emitted. We need to make and implement more legislation to encourage a faster pace of decarbonization, and having unified terminology and standards is conducive to both effective carbon legislation and policy implementation. Common terminology and standards will provide a basis for carbon legislation. Having clearly stipulated standards and procedures can also make implementation easier and more straightforward. 

Last but not least, we are hopeful about the future of U.S.-China cooperation on climate change and believe that universities can play a significant role in the global energy transition. Universities are often the birthplaces of innovative technology, training grounds for talent from across the globe, as well as conveners of bilateral and multilateral dialogues. We hope the governments on both sides of the Pacific will work together to hammer out the needed details to build the momentum and make a real impact in the fight against global climate change. 

Shiran Victoria Shen is the W. Glenn Campbell and Rita Ricardo-Campbell national fellow at Stanford University’s  Hoover Institution, as well as an assistant professor of environmental politics at the University of Virginia. 

Jean C. Oi is the William Haas professor of Chinese politics, senior fellow at the Freeman Spogli Institute of International Studies, as well as the director of Stanford University’s China Program. She is also the Lee Shau Kee director of the Stanford Center at Peking University. 

Yi Cui is the director of Stanford University’s Precourt Institute for Energy, as well as professor of materials science and engineering. He is a senior fellow at the Woods Institute for the Environment, and professor, by courtesy, of Chemistry, Stanford University. 

Liang Min is managing director of the Bits & Watts Initiative of the Precourt Institute for Energy at Stanford University. 

China and the United States are the two biggest carbon-emitting countries in the world. Decarbonization in these two countries will have material impacts on a global scale and is timelier than ever, according to a recent report from Stanford University’s Precourt Institute for Energy, Stanford Center at Peking University, APARC's China Program, and Peking University’s Institute of Energy.

The report is the product of a roundtable series, held in October 2021 that brought together leading American and Chinese current and former officials, and experts in the public and private sectors working on energy, climate, the environment, industry, transportation, and finance. The roundtables promoted discussion around how China and the United States can accelerate decarbonization and cooperate with one another to meet their carbon neutrality goals by mid-century.

The thematic areas of the roundtables included U.S.- China collaboration on climate change, global sustainable finance, corporate climate pledges, and the opportunities and challenges for the acceleration of decarbonization in both countries in general, as well as specifically for the power, transportation, and industry sectors.

The resultant report reviews the key themes and takeaways that emerged from the closed-door discussions. It builds on the “U.S.-China Joint Statement Addressing the Climate Crisis” released by the U.S. Department of State on April 17, 2021 and shares some common themes with the “U.S.-China Joint Glasgow Declaration on Enhancing Climate Action in the 2020s” released on November 10, 2021. Shiran Victoria Shen of the Hoover Institution authored the report, with contributions by Yi Cui of the Precourt Institute for Energy, Zhijun Jin of the Institute of Energy and Jean Oi, Director of APARC's China Program. 

The report suggests that tensions in U.S.-China relations have hindered the acceleration of decarbonization and that open science in fundamental research areas must be encouraged. Universities can educate future leaders, advance knowledge, and foster U.S.-China collaboration on open-science R&D, regardless of the political environment. The report argues that the most promising strategy to decarbonize energy is to electrify consumption now served by fossil fuels as much as possible while decarbonizing electricity generation. 

The roundtables identified six areas where the U.S. and China could collaborate: global green finance, carbon capture and storage, low-carbon agriculture and food processing, methane leak reduction, grid integration and greater use of intermittent renewables, and governance, including at the subnational level. The report further identifies more concrete and additional promising areas for accelerated decarbonization and bilateral collaboration, as well as the obstacles to be tackled, including institutional, political, and financial constraints. 

On January 27, 2021, the China Program at Shorenstein APARC hosted Professor Hau L. Lee, The Thoma Professor of Operations, Information & Technology at the Stanford Graduate School of Business for the virtual program “The Pandemic, U.S-China Tensions and Redesigning the Global Supply Chain.” Professor Jean Oi, William Haas Professor of Chinese Politics and director of the APARC China Program, moderated the event.

Professor Lee focused on an important question that has only become more pressing due to the COVID-19 pandemic: How, if at all, should businesses redesign their supply chains? Since the beginning of the pandemic, explains Lee, there has been an increase in calls for “redundancy” in supply chains in order to protect them from the problems they faced early in the pandemic, when China was first hit by shut downs and slowed productivity. Advice has been varied, ranging from the “China Plus One” strategy in which businesses simply add a secondary production location, to completely domesticating supply chains.

Lee warns, however, of the perils of overreaction. There are numerous risks that come along with a fully domestic supply chain, not least the danger of “having all of your eggs in one basket.” Instead, says Lee, businesses should move cautiously and, instead of fully divesting from China, should use the country intelligently. 

Professor Lee’s “In and Out Design” encourages businesses to work from the inside out, securing and strengthening their supply chains by starting at home. Companies must first build “internal supply chain excellence,” after which they can move on to making sure their strategic partners are equally strong and can work to their advantage. Eventually, companies can move on to strengthening the extended value chain and, ultimately, their entire ecosystem. Using strategies like dual response, leveraging “lubricants,” and bolstering capacity-building capabilities, businesses can create a more stable future. 

The session concluded with a fruitful Q&A between Professor Lee and the audience, moderated by Professor Oi.

A video recording of this program is available upon request. Please contact Callista Wells, China Program Coordinator at cvwells@stanford.edu with any inquiries.

The Stanford Center at Peking University (SCPKU), the Center on Democracy, Development and the Rule of Law (CDDRL), and the APARC China Program jointly hosted a workshop on China’s Belt and Road Initiative (BRI) in early March. The workshop, held on March 2 and 3, welcomed researchers from around the world with expertise in the Initiative. Unfortunately, because of the rapidly developing health emergency related to the coronavirus, participants from not only China, but also Japan, were prevented from attending. As described by Professor Jean Oi, founding director of SCPKU and the China Program, and Professor Francis Fukuyama, director of CDDRL and the Ford Dorsey Master's in International Policy, who co-chaired the workshop, the meeting aimed to provide a global perspective on the BRI, consolidate knowledge on this opaque topic, and determine the best method and resources for future research.  

The workshop began with presentations from several of the invited guests. Dr. Atif Ansar from the University of Oxford’s Saïd Business School kicked off the first day by describing not only the tremendous opportunity that the BRI presents to developing economies, but also the serious pitfalls that often accompany colossal infrastructure projects. Pointing out the poor returns on investment of mega infrastructure projects, Ansar examined the frequest cost and schedule overruns, random disasters, and environmental degradation that outweigh the minimal benefits that they generally yield. China’s own track record from domestic infrastructure projects does little to mitigate fear of these risks, Ansar claimed. In response, he urged professional management of BRI investments, institutional reforms, and intensified deployment of technology in BRI projects. Dr. Ansar was followed by Dr. Xue Gong of the S. Rajaratnam School of International Studies, Nanyang Technological University, Singapore. Dr. Gong’s analysis centered on the extent to which China’s geopolitical motivations influenced its outward foreign direct investments (OFDI). Although her research was still in the early stages, her empirical analysis of China’s OFDI inflows into fifty BRI recipient countries from 2007-2018 nevertheless revealed that geopolitical factors often outweigh economic factors when it comes to China’s OFDI destinations.

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Professor Curtis J. Milhaupt and Scholar-in-Residence Jeffrey Ball, both at Stanford Law School, followed with individual presentations on the role of State-Owned Enterprises (SOEs) in the BRI and the emissions impact of the BRI on climate change, respectively. Professor Milhaupt  characterized Chinese SOEs as both geopolitical and commercial actors, simultaneously charged with implementing Party policies and attaining corporate profits. Chinese SOEs are major undertakers of significant overseas BRI projects, acting not only as builders but also as investors, partners, and operators. This situation, Milhaupt asserted, carries significant risks for SOEs because these megaprojects often provide dismal returns, have high default rates, and can trigger political backlash in their localities. Milhaupt highlighted the importance of gathering firm-level data on businesses actually engaged in BRI projects to better infer geostrategic, financial, or other motivations. Jeffrey Ball turned the discussion to carbon emissions from BRI projects and presented preliminary findings from his four-country case studies. He concluded that, on aggregate, the emissions impact of the BRI is still “more brown than green.” Twenty-eight percent of global carbon emissions may be accounted for by BRI projects, Ball asserted, underscoring the importance of the BRI to the future of global climate change.

The day concluded with presentations by  Michael Bennon, Managing Director at the Stanford Global Projects Center, and Professor David M. Lampton, Oksenberg-Rohlen Fellow at the Freeman Spogli Institute for International Studies. Bennon first presented findings from two empirical case studies of BRI projects and then went on to describe how the BRI is now practically the “only game in town” for infrastructure funding for developing countries. Lengthy environmental review processes at Western multilateral banks have turned the World Bank, for example, from a lending bank into a “knowledge bank,” he argued. He also highlighted that, in general, economic returns on BRI projects for China are very poor, even though recipient countries may accrue macroeconomic benefits from these projects. Finally, Professor Lampton turned the discussion back to Southeast Asia, where China is currently undertaking massive cross-border high-speed rail projects through eight ASEAN countries. He described how each host country had varying capacity to negotiate against its giant neighbor, and how the sequential implementation of these cross-border rail projects also had varying impacts on the negotiating positions of these host countries. BRI played out differently in each country, in other words, eliciting different reactions, push-backs and negotiated terms.

The second day of the workshop was dedicated to working toward a collaborative approach to future BRI research. The group discussed the key gaps in the existing research, including how to know what China’s true intentions are, how to measure those intentions, who the main players and their interests in both China and the host countries are, and even what the BRI is, exactly. Some cautioned that high-profile projects may not be representative of the whole. Participants brainstormed about existing and future sources of data, and stressed the importance of diversifying studies and seeking empirical evidence.