Transatlantic Climate Action in the Gulf and Great-Power Competition

This piece is part of the series “All About China”—a journey into the history and diverse culture of China through short articles that shed light on the lasting imprint of China’s past encounters with the Islamic world as well as an exploration of the increasingly vibrant and complex dynamics of contemporary Sino-Middle Eastern relations. Read more ...

The cardinal theme of an emerging “Biden Doctrine” — sounded repeatedly by the President since taking office[1] and echoed in the Interim National Strategic Guidance[2] issued in March — is the contest between democracies and autocracies. To prevail in this contest, the Biden administration has crafted an approach centered on marshaling the diplomatic capital and resources of democratic allies and partners to tackle global challenges such as climate change, in the face of a looming threat from China.[3]

President Biden has sought to revitalize the Transatlantic alliance, which, he declared in a speech at the 2021 virtual Munich Security Conference, “is and must remain a cornerstone of all that we hope to accomplish in the 21st century.”[4] His reaffirmation of America’s traditional support for Europe was welcomed with relief. Since then, Transatlantic relations have been on the upswing. The G-7, NATO, and US-EU summits (June 11-15) were a successful reset, promising greater engagement and coordination. Yet, while the diplomatic groundwork has been laid, it remains to be seen whether a more ambitious Transatlantic agenda is possible. Inevitably, this will take more than just artful rhetoric, personal chemistry, and cordial summitry.

Forging an ally-centered partnership to support nationally owned climate action initiatives in developing countries could form part of a new Transatlantic agenda. Focusing some of these initiatives on the MENA region, specifically on the Gulf — where US, European, and Chinese interests intersect — and aligning them with local priorities, though without casting them as part of a zero-sum struggle with Beijing, could contribute to a more resilient and cleaner planet, a more stable region, and a less contentious manifestation of great-power competition in a volatile part of the world. 

The End of Europe’s Honeymoon with China?

In 2020 China overtook the United States to become Europe’s largest trading partner in goods.[5] However, the accelerating growth in China-Europe economic relations has occurred in a time of increasing political friction.[6] In March, the European Union (EU) joined the United States and Canada in imposing sanctions on Chinese officials for human rights abuses in Xinjiang, and Beijing retaliated.[7] The EU-China Comprehensive Agreement on Investment (CAI), seven years in the making and agreed by the European Commission last November is frozen.[8]

Many European leaders have grown skeptical and more critical of China.[9] On April 19, the European Council (EC) approved conclusions on an “EU strategy for cooperation in the Indo-Pacific,” which while not explicitly directed at China nonetheless seeks to support a rules-based multilateralism that Beijing appears intent on reshaping.[10] A recent EU high-level internal report takes a dim view of China and the prospects for cooperation.[11]

Meanwhile, at the national level, the UK has shifted toward a much more sober China policy.[12] The British Government has called for a strategic reorientation of foreign and security policy towards the Indo-Pacific, including an expanded naval presence in the Indian Ocean.[13] After years of viewing China primarily as a lucrative market, Germany, too, is in the process of reassessing its relationship with Beijing.[14] Last September, Berlin announced its intention to play a stronger security role in the Indo-Pacific, though without explicitly referring to China.[15] Italy is now reconsidering its involvement in the Belt and Road Initiative (BRI).[16] Likewise, Stockholm’s relations with Beijing have grown frosty since Swedish authorities ordered the closure of Confucius Institutes and banned Chinese vendors from its 5G rollout.[17] Unmet expectations of economic cooperation, Beijing’s clumsy disinformation campaign during the COVID-19 pandemic, and divisive tactics have created a backlash against China in Central and Eastern Europe as well.[18] 

In addition, misgivings about Beijing have been growing within the European business community.[19] Despite that China remains a significant market for German companies, concern has been building about the problems German firms operating in China have faced, which range from forced technology transfer, failures to protect intellectual property, and arbitrary customs decisions, to state-subsidized takeovers.[20] Meanwhile, last year, KPN, among the Netherlands’ largest mobile phone networks, became one of the first European operators to exclude Huawei from its 5G network.[21] Attitudes toward China are also trending negative at the popular level. Surveys conducted by the Pew Research Center between February 1 and May 26, 2021, in 17 advanced industrial economies found that China’s reputation has dropped markedly.[22]

US and European Approaches to China: A Limited Convergence

Yet, US and European approaches to China have not converged as sharply as might be expected given increasingly unfavorable European views of China and even as there is mounting evidence of toughening European policies toward Beijing. Europeans are understandably concerned that they might get caught in the crosscurrents of great-power competition. Their wariness is captured well by EU foreign policy chief Josep Borrell, who, in a European Union External Action (EEAS) blog post a year ago this June remarked: “Amid US-China tensions as the main axis of global politics, the pressures to ‘choose sides’ is increasing.”[23] 

The Biden team is neither unaware nor dismissive of these concerns. Perhaps partly to mollify allies, in his first major address as US Secretary of State Antony Blinken stated: “Our relationship with China will be competitive when it should be, collaborative when it can be, and adversarial when it must be.”[24] Blinken’s language mirrors that of the European Commission (EC), which in 2019 used four terms to identify the different aspects of its relationship with China — labeling the latter as a “global cooperation partner,” a “negotiating partner,” an “economic competitor,” and a “systemic rival.”[25] Indeed, both sides increasingly agree that relations with China are multifaceted and complex, and that China poses significant political, economic, and even security challenges.

The important work of turning this growing agreement on China into a constructive and concrete agenda began in earnest with President Biden’s trip to Europe in June for a series of summits, which produced a joint US-European commitment to work together.[26] At NATO, the Allies agreed to “engage China with a view to defending the security interests of the Alliance” and expand the primarily Transatlantic focus of the Alliance.[27] G-7 leaders pledged to “promote our values, including by calling on China to respect human rights and fundamental freedoms …”[28] They also agreed to develop a democratic alternative to China’s Belt and Road Initiative — the Build Back Better World (B3W) Partnership — that would offer low- and middle-income countries “transparent” options for their infrastructure needs.[29]

Yet, these encouraging mutual pledges and the strong solidarity reflected in the language of the summits’ final communiqués nonetheless mask divergent outlooks regarding China policy. To be sure, the EU has expressed interest in working with the Biden administration on matters related to China, but an overtly anti-China coalition is unappealing and decoupling unrealistic.[30] Many Europeans do not view China, as their American counterparts do, through a “great power rivalry” lens. Prior to the recent summits, Berlin and Paris had seemed reluctant to join a Biden-led campaign to confront China[31] — and still are. At Cornwall, French President Emmanuel Macron declared “the G-7 is not a club hostile to China.”[32] German Chancellor Angela Merkel, while conceding that China is a “rival in many questions” was careful to acknowledge the reality that China is a “partner in many aspects.”[33] Prominent members of the European business community, while urging EU leaders to take a tougher line on Beijing, fear calls for decoupling from China.[34]

How, then, to translate the broadly compatible US-European views regarding China into concrete efforts to advance the values and interests that define Transatlantic relations?

The US-EU-China Triangle: Finding Common Ground in Climate Action

Climate change is among several global challenges that the United States and its European allies regard as requiring urgently needed collective action. It is also an area where the US, Europe, and China might find common ground. Three-way collaboration on climate change adaptation, energy security, and clean energy with third countries could serve as a form of “cooperative leadership” that leverages the Transatlantic partnership while helping manage the US-China strategic rivalry at a lower level of intensity.[35]

Within the complicated US-EU-China triangle, bilateral channels for exploring new avenues for cooperation on climate action and clean energy already exist. The EU-China Partnership on Climate has provided a high-level political framework for cooperation and dialogue since 2005.[36] At the most recent EU-China summit, in July 2018, the two sides reaffirmed their commitment to advance the implementation of the Paris Agreement and intensify their cooperation on climate change and clean energy.[37]

Multiple channels for Sino-American cooperation on climate and energy also exist, such as the Sino-US Energy Cooperation Forum, the China-US Climate Change Working Group, and the US–China Clean Energy Forum. In the US-China Joint Statement Addressing the Climate Crisis issued in April, the American and Chinese sides “committed to cooperating with each other and with other countries to tackle the climate crisis, which must be addressed with the seriousness and urgency that it demands.”[38]

Importantly, the joint communiqué issued at the conclusion of the US-EU summit the previous month explicitly identified climate change as an area for constructive engagement with China, committed to establish a US-EU High-Level Climate Action Group, and welcomed G7 discussions to orient development finance tools toward the range of challenges faced by developing countries, including in resilient infrastructure and technologies, addressing the impact of climate change.[39] [Italics added.]

The joint statement released following the 20th EU-China Summit in 2018, mentioned earlier, envisages “possibilities for triangular cooperation on promoting sustainable energy access, energy efficiency and low greenhouse gas emission development in other developing countries and assist them to increase the capacities in combating climate change, with particular focus on least developed countries, small island developing states and African countries.”[40] [Italics added.]

Thus, there appears to be scope not just for greater Transatlantic cooperation but also for an intensified trilateral dialogue on supporting climate action in developing countries — including countries in the Middle East and North Africa.

Climate Action in the Gulf: An Opportunity for an Ally-Centered Agenda 

The Middle East and North Africa (MENA) faces enormous sustainability challenges. Extreme droughts and heat waves, coupled with population growth and water scarcity, pose significant risks for countries across the MENA.[41] The Gulf sub-region in particular — an area where US, European, and Chinese interests intersect — is highly exposed to the effects of climate change and environmental degradation. Gulf states and societies face threats ranging from rising sea levels and extreme weather events to the impact on already-fragile ecosystems, along with a shift toward a decarbonized world economy that might depress global oil demand.

As a result, Gulf countries are under pressure to take climate action[42] — and there are some encouraging signs that they are doing so.[43] Indeed, Saudi Arabia and the United Arab Emirates are moving fast to develop projects that tackle climate change and accelerate the transition to more renewable sources of energy. The Saudi and Emirati “vision” schemes, like those of the other GCC countries, incorporate environmental sustainability as a key pillar. According to the International Renewable Energy Agency (IRENA), the Gulf States have made “striking gains” in renewable energy deployment in recent years.[44] Saudi Arabia and the UAE, as well as Bahrain and Oman, have set ambitious renewable generation goals.[45] Even during the pandemic, Gulf renewable companies have forged ahead with international and local projects.[46]

In addition, Gulf countries have been exploiting the commercial opportunities associated with climate action by investing overseas in renewable energy projects. UAE has devoted roughly $16.8 billion to renewable energy projects in 70 countries.[47] Gulf companies, notably Abu Dhabi’s Masdar and Saudi Arabia’s ACWA Power, have been building global clean energy portfolios.[48] Meanwhile, Gulf national oil companies such as Saudi Aramco and Abu Dhabi National Oil Company (ADNOC) are pushing to decarbonize their operations.[49]

In recent years, GCC countries’ attitudes and positions regarding global climate action have evolved from obstruction to constructive engagement.[50] Gulf countries have become more active and relevant actors in climate diplomacy. In 2014, Qatar hosted COP18 and advocated for greater cooperation in research and knowledge production. In April this year, the UAE hosted the Regional Dialogue for Climate Action Summit, which provided a platform for participating countries to collaborate in their responses to climate change. The summit concluded with commitments to work collectively to adapt to climate impacts and mobilize climate finance.[51] The same month, Saudi Arabia and UAE took part in the US Leaders Summit on Climate.[52] Ahead of the summit, Crown Prince Mohammed bin Salman announced the Saudi Green Initiative and the Middle East Green Initiative[53] — extensions of Saudi Vision 2030 that will place the Kingdom at the center of regional efforts to address environmental degradation and climate change.

Like Saudi Arabia, UAE has made climate action a pillar of its domestic and foreign policy and national economic strategy. Abu Dhabi is lobbying to host the Council of Parties (COP28) global climate summit in November 2023.[54] Meanwhile, Qatar has joined Saudi Arabia in co-founding (with Norway and Canada) the new Net Zero Producers Forum, launched with an agenda to tackle methane and carbon emissions in the oil and gas sector. carbon capture, usage, and storage (CCUS).

The Biden administration seems keen to harness the Gulf countries’ recognition of and increasing efforts to realize co-benefits of economic diversification and emission reductions to its own ambitious global climate agenda. Washington has used its convening power and is seeking other ways to catalyze and support such efforts. On the occasion of Special Presidential Envoy for Climate John Kerry’s visit in June, the US and Saudi Arabia affirmed their intention to engage bilaterally to advance efforts under the Net-Zero Producer’s Forum, unleash the potential of clean hydrogen, accelerate the deployment of renewable energy and low-emissions power systems, and enhance climate mitigation and adaptation research.[55] Thus, the new US administration has begun to sketch the rough outlines of what could be scaled up and molded into a “Transatlantic-Gulf States Climate Action Partnership.”

In the meantime, America’s European allies are forging ahead with bold climate action initiatives of their own. As an extension of the European Green Deal, the EU is endeavoring to apply the Team Europe concept — of pooling efforts and organizing emergency assistance for partner countries hard-hit by COVID-19 — to climate and green recovery beyond Europe’s borders.[56] Supporting developing countries in this manner is clearly a good thing. But a joint US-EU mechanism arguably would be even better.

Acting together, the United States and Europe could synergize efforts that both influence and lend support to Gulf countries’ drive for a sustainable future. There are numerous ways the US and Europe could contribute to the Gulf’s green transition — some that would ensure the field is not left vacant for China to occupy and others that might complement Chinese activities or be enhanced by Chinese participation.

The US and Europe could partner with Gulf countries to facilitate access to green finance for less affluent regional countries, which would reduce the likelihood that China would fill the gap. There are ample opportunities for American and European firms to compete in the growing Gulf renewables market as most Chinese renewables players in it are private sector entities that receive less support from export-import banks than state-backed firms.[57]

The US and Europe could coordinate activities designed to provide sectoral and technical support for Nationally Determined Contributions (NDC) implementation. Other potential avenues for Transatlantic cooperation in advancing the Gulf’s green transition include climate adaptation measures such as drought and flash flood preparedness, capacity-building to support disaster risk management, and measures to strengthen rural communities’ resilience. Steps could be taken to forge partnerships with Gulf countries in the development and deployment of mitigation and adaptation technologies, including clean fuels such as hydrogen, energy storage, clean desalination, and carbon capture. Gulf countries are also strong candidates for investment and other forms of support for water-energy-food (WEF) nexus initiatives aimed at reducing the economy’s dependence on water and at anticipating climate’s effects.

Additionally, Transatlantic efforts could focus on the “soft” elements of the green transition; that is, on helping Gulf states increase public climate change knowledge and drive wider adoption of eco-friendly practices in their own societies as well as regionwide. In some of these endeavors, the US and Europe could widen the circle of ally-partners to include Japan, South Korea, and perhaps India. All this need not be aimed at countering or excluding China. Neither would such efforts in all instances be in direct competition with China’s. A trilateral dialogue linked to a Transatlantic climate action partnership with the Gulf States could lead to climate-beneficial projects throughout the Gulf and wider MENA region.  

Conclusion

Reflexive anti-China views appear to have taken hold in Washington. The Biden administration seems determined to build a united front against China. But a full-spectrum antagonistic policy toward China is unlikely to be embraced by America’s European partners. As The Economist put it: “By framing the relationship as a zero-sum contest, he [President Biden] is presenting them with a Manichean struggle between democracy and autocracy, rather than the search for co-existence.”[58] An approach cast in a manner that is aimed at undermining China’s efforts to overturn the international order instead runs the risk of undermining the Transatlantic partnership while failing to capitalize on its combined strengths and advantages. Far better for the US to meet its European partners where they are than try to drag them where they refuse to go.

The United States, Europe, and China already coexist — on a planet hurtling dangerously toward cascading climate crises. This is a reality that is becoming ever clearer in the MENA, where across the region there is mounting evidence of acute climate-related risks. In the face of heightening climate risks, growing economic diversification pressures, and looming peak oil demand, Gulf petrostates have pivoted from obstructive to constructive approaches to decarbonization. They have accelerated efforts to decarbonize at source and to shift to renewables as a means of creating new revenue streams while reducing domestic use of oil/gas to enhance export revenues. 

US-European commercial and security interests and green ambitions overlap with several national sustainable development strategies throughout the MENA region. So also do China’s. These circumstances supply the Biden administration with an opportunity to shape an ally-centered Transatlantic climate action agenda for the Middle East and North Africa, anchored in partnerships with the Gulf States — a strategic investment with an affirmative message that is less fixated on China and more focused on building a cleaner, more resilient world and a more stable and prosperous region. The current spate of extreme weather events around the world, coupled with the momentum likely to be generated by COP26 in Glasgow in November, might serve as a springboard to galvanize action.