A Partnership Of Rivals Links The Climate Fates Of China And The West

Integrating carbon trading markets is an embryonic step toward planetary realism.

Tara Hardy for Noema Magazine

Nathan Gardels is the editor-in-chief of Noema Magazine.

In 1950, French Foreign Minister Robert Schuman proposed the visionary idea of a European Coal and Steel Community (ECSC) that would create a common market for coal and steel among powers that had only recently been at war. As he put it, the aim was to make war “not only unthinkable, but materially impossible” through regional integration. The ECSC was formally established in 1951 by the Treaty of Paris. Nearly three-quarters of a century later, the even deeper integration of the European Union following this early idea has effectively banished the possibility of war on the continent. 

A similarly imaginative concept stands behind another embryonic project in 2021 when accelerating climate change threatens the planet’s habitable biosphere. Its aim is to preemptively dampen hostilities between China and the West by integrating carbon-emission trading markets, thus structurally linking the climate fates of strategic competitors. By creating a core pillar of common intent among geopolitical rivals, the overarching shadow of distrust that paves a path to any future war can be diminished. 

The pilot project of this endeavor is being spearheaded by the University of California and Tsinghua University through the California-China Climate Institute chaired by former California Governor Jerry Brown in partnership with China’s top climate envoy, Xie Zhenhua. It is funded in part by the Berggruen Institute and its 21st Century Council’s partner in Beijing, the China Institute for Innovation and Development Strategy (CIIDS). 

China has adopted the template of California’s long-standing carbon market program, in which polluters are required to purchase offset permits from clean industries or carbon-reducing projects. The increasing cost of these permits, which sets an ever-higher price on carbon, incentivizes sectors from manufacturing to transportation to reduce their emissions. To the extent the measurement of emissions and scope of regulatory reach to key polluting industries can be standardized across these markets, trading of permits among them can take place. Once such standards are set, a more expansive integration would be possible with the U.S. as a whole and the European Union, which also has a large common trading market. 

The kick-off meeting of the joint research project to lay the ground for market integration took place last week. He Jiankun, the chairman of the National Expert Panel on Climate Change, led the Chinese team. Mary Nichols, who, over the past four decades, pioneered California’s environmental policies as head of the state’s powerful Air Resources Board, led the California team. 

Opening the session, CIIDS Vice-Chairman Feng Wei made the essential point: “Climate change bears on the future of all countries across the globe and is one of the foremost areas where the interests of China and the U.S. converge,” he said. “And in a time when other conversations between China and the U.S. are becoming difficult, it’s all the more important to maintain a bridge of cooperation and dialogue and to keep open avenues of understanding between us. We hope that through this joint research project, both countries could engage in mutual learning, draw on each other’s experience and make contributions to addressing the climate challenge and achieving carbon reduction and neutrality.” 

For the Berggruen Institute, this activated “partnership of rivals” is the practical manifestation of the planetary realism we believe must ultimately supplant the old geopolitical paradigm driven by narrow definitions of national interest that inhibit cooperation on the primary existential concern for all of humanity. 

Just as the ECSC grew from an embryo to a supranational reality, the hope is that the planetary imperative will drive a new era that structurally binds the climate fates of all nations while lessening the prospect of a world divided into hostile blocs.