China is the world’s most populous country and the largest emitter of carbon. If it can meet its vast potential for emission reduction, it will play an enormous role in tackling global climate change. The signs have been good. After suffering severe smog in 2011, the product of years of rising coal consumption, the Chinese government initiated a massive national action plan: halting the growth of coal consumption, improving air quality and helping the country limit emissions overall.
However, the economic slowdown and worsening trade war are risking a relapse. Some smog-stricken regions in China were found to have relaxed tight controls on polluting industries such as steel and cement in the second half of 2018, contributing to a rebound of smog last winter. The carbon market, the government’s primary climate-action plan, has been significantly downsized while coal consumption picked up again last year.
So what can China do now to stem emissions and remain a leader in the fight against climate change, while also maintaining socioeconomic development? Tap into the power of the market, from the bottom up.
As the world’s manufacturing hub, China is in a unique position to change the course of global emissions. In most industrial sectors, 75% of greenhouse-gas emissions are produced from the supply chains. In a globalized world, this means China’s emissions are generated to meet more than just its own rising demand. Research conducted by the Carbon Trust found that China is the world’s largest emitter in the apparel sector, but 72% of those emissions are essentially the responsibility of companies overseas where the products are exported and sold.
Responsibility for this division between manufacturing and products comes down to the private sector. In 2018, we at the Institute of Public and Environmental Affairs (IPE) examined the climate actions of 118 IT and textile-industry brands sourcing from China to rank them by how green their supply-chain practices are. Apple and Nike tied for first place, and Chinese brands Lenovo and Huawei reached the top 30, but most brands did not take supply-chain carbon footprints into consideration. Barely any set supply-chain emission-reduction targets. Consequently, most of the top global brands may not be able to meet their climate commitments.
Thankfully, things are already changing. As China has expanded environmental transparency, some 70 multinational and local brands have applied the monitoring data compiled by IPE to motivate more than 8,000 suppliers to address regulatory violations. The country’s commitment to environmental transparency can incentivize companies to mitigate supply-chain emissions. Open carbon data not only enables businesses to set effective targets but also permits the public and investors to identify which are using best practices and which are racking up regulatory violations. To hold companies accountable, the state must also instigate high penalties for failing to disclose or falsifying this information.
But those leading brands demonstrating responsible oversight of their supply chains show that the private sector can make significant contributions, even without those systems in place. As climate change worsens, government and businesses will need to work in tandem to break the global community out of its “business as usual” mind-set.