China plans to transform its carbon policies, from controlling carbon intensities to introducing caps on total emissions by 2030, Liu Zhenmin, China's special envoy for climate change told state media outlet China News Service in an interview published Nov. 30.

Imposing a cap on total emissions could pave the way for China to transform its national compliance emission trading scheme, or ETS, into a cap-and-trade system. Meanwhile, after establishing this cap, China may develop policies for Article 6 implementation, indicating how it plans to use this new, UN-backed carbon market, according to market experts.

In China's current carbon policies, targets are established based on carbon intensities, such as setting the maximum emissions permitted for each megawatt-hour of coal-fired power generated or each ton of crude steel produced. Consequently, total emissions from each sector may continue to rise, as companies are permitted to emit more when their production outputs increase.

"After China reaches its carbon peak before 2030, it will enter a new stage where the primary focus will be total carbon emission control, and carbon intensity control will be supplementary," Liu told CNS.

Liu said China will submit its new nationally determined contributions (NDCs) in 2025 to set climate targets up to 2035. He said the new NDCs would be more ambitious and cover all economic sectors and types of greenhouse gases.

China's delegation did not hold a press conference during the 29th UN Climate Change Conference in Baku, Azerbaijan. This interview might represent the most comprehensive COP29 response from China's climate envoy. CNS is China's second-largest state media outlet after Xinhua.

NCQG disappointment

Setting a new collective quantified goal (NCQG) on global climate finance was widely recognized as the most crucial agenda item for COP29. Liu expressed alignment with the disappointment felt by many developing countries regarding the final agreement.

He said climate finance can be delivered through two approaches: provision and mobilization. Provision refers to the obligation of developed countries to provide financial support to developing countries. Mobilization, on the other hand, refers to a more diverse finance pool, including contributions from the private sector.

He emphasized that NCQG should focus on the provision approach.

"Projects such as climate change adaptation struggle to attract private capital due to the lack of direct, short-term returns, so large amounts of public funds must be invested. Therefore, developing countries initially expected developed countries to make a clear commitment on how much public funds would be available under the provision approach, but the final commitment remained vague."

He firmly opposed the proposal to reclassify developing countries based on income standards, a suggestion put forward by some developed countries during the COP29 negotiation, urging China to contribute to climate finance.

He noted that although China has contributed more than half of the global renewable generation capacities, its energy system is still dominated by fossil fuels. Overhauling the existing system and building a renewable-dominant system would necessitate substantial investments.

"Therefore, China must first solve its own problems in its own energy transition and then provide voluntary support to our brothers in the developing world to an extent that's within our capabilities," he said.

US-China collaboration

Another significant concern for the Chinese delegation at COP29 was determining how to sustain the US-China climate collaboration following the recently concluded US election.

"During COP29, I have been telling representatives from the US that the trend of the global energy transition is irreversible, and no country can survive alone," Liu said.

"Officials from the US Department of Energy also expressed the hope that future US-China cooperation in energy industries, such as geothermal, energy efficiency, and CCUS [carbon capture, utilization and storage], will not be completely interrupted."

He said, in the past four years, climate cooperation has benefited industries and companies in both countries. "Hence, even if the federal-level climate policies are reversed during Trump 2.0, I am still cautiously optimistic about US-China climate cooperation, especially cooperation with US state governments and companies."

Liu also criticized remarks from some developed countries that urged China to demonstrate stronger climate leadership if the US were to exit the Paris Agreement. "This is a narrative that excessively 'praises' China. The Western world puts a huge hat on us."

He said that the outcomes of COP29, particularly regarding the NCQG, indicated a lack of mutual trust between the Global North and Global South. "This issue is more serious than merely 'how much money to offer'."