Karin Costa Vazquez

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Jul 19, 2021

How are global trade and investments in energy likely to be impacted by China’s pledge to reach carbon dioxide neutrality before 2060? How will countries need to respond to stay ahead of the game, or simply not to miss trade and investment opportunities with a net zero carbon China? This paper argues that the impacts of China’s decarbonization in energy trade and investments will be felt differently across the globe depending on countries’ environmental performance, the profile of their energy exports to China, and the availability of decarbonization plans domestically. Countries that have already started to roll out their decarbonization and are supplying non-fossil fuels to China are more likely to level up their bilateral engagement. Countries that have not yet started to roll out their decarbonization plans and are supplying fossil fuels to China are more likely to restrain, if not phase out, their economic relations with the Asian giant. This paper concludes that China’s proposal to achieve net zero emissions by 2060 could be the turning point for fossil fuel markets and the global energy transition, creating a future of mutual adaptation for China and its sources of energy supply.

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