China’sinternationalroleinnavigatingtheclimate–tradenexusLeiBianandLucieQianXiaPolicyinsightOctober2022TheGranthamResearchInstituteonClimateChangeandtheEnvironmentwasestablishedin2008attheLondonSchoolofEconomicsandPoliticalScience.TheInstitutebringstogetherinternationalexpertiseoneconomics,aswellasfinance,geography,theenvironment,internationaldevelopmentandpoliticaleconomytoestablishaworld-leadingcentreforpolicy-relevantresearch,teachingandtraininginclimatechangeandtheenvironment.ItisfundedbytheGranthamFoundationfortheProtectionoftheEnvironment,whichalsofundstheGranthamInstitute–ClimateChangeandEnvironmentatImperialCollegeLondon.www.lse.ac.uk/granthaminstituteEnergyFoundationChinaisaprofessionalgrant-makingcharitableorganisationregisteredinCalifornia,UnitedStates.ItstartedworkinginChinain1999andisdedicatedtoChina’ssustainableenergydevelopment.Thefoundation’sChinarepresentativeofficeisregisteredwiththeBeijingMunicipalPublicSecurityBureauandsupervisedbytheNationalDevelopmentandReformCommissionofChina.Itsvisionistoachieveprosperityandasafeclimatethroughsustainableenergy.http://www.efchina.org/Front-Page-eAbouttheauthorsAbouttheauthorsLei(Alice)BianisaPolicyFellow(BeltandRoadInitiative)attheGranthamResearchInstituteonClimateChangeandtheEnvironment.LucieQianXiaisaChinaPolicyFellowattheGranthamResearchInstituteonClimateChangeandtheEnvironment.AcknowledgementsTheauthorswouldliketothankChunpingXie,DanaeKyriakopoulou,RobertaPierfederici,RobertHamwey,JamesRoafandElizabethRobinsonfortheirhelpfulcommentsonthispaper,andBobWardandNicholasSternfortheirinsightfulinputintotheproject.ThereporthasalsobenefitedfromthefruitfuldiscussionsfromtheLSEGRIChinaSeries,andtheauthorswouldespeciallyliketothankthespeakersandparticipantsoftheChinaSeriesHigh-Levellaunchevent‘TheClimate-TradeNexusandChina’sClimateAction’.NataliePearsonandGeorginaKyriacoucopy-editedthereport.Theauthorshavenorelevantfinancialornon-financialintereststodisclose.TheauthorsdeclarefinancialsupportfromtheEnergyFoundationChina,theUKDepartmentforBusiness,EnergyandIndustrialStrategy,theGranthamFoundationfortheProtectionoftheEnvironmentandtheLondonSchoolofEconomicsandPoliticalScienceforthesubmittedwork.Theviewsexpressedinthisreportrepresentthoseoftheauthorsanddonotnecessarilyrepresentthoseofthereviewers,hostinstitutionsorfunders.ThispaperwasfirstpublishedinOctober2022bytheGranthamResearchInstituteonClimateChangeandtheEnvironment.©Theauthors,2022PermissionsrequestsshouldbedirectedtotheGranthamResearchInstitute.Suggestedcitation:BianL,XiaLQ(2022)China’sinternationalroleinnavigatingtheclimate–tradenexus.London:GranthamResearchInstituteonClimateChangeandtheEnvironment,LondonSchoolofEconomicsandPoliticalScience.0ContentsListofabbreviations1Summary31.Introduction72.Negotiatingtheclimate–tradenexusandChina’sdiplomacy93.Movingforwardwiththeinternationalcarbonpricingagenda174.FosteringajustenergytransitionthroughtheBeltandRoadInitiative295.FormulatinganinternationalClimateClubthroughG20–G7cooperation396.Conclusionandpolicyrecommendations49References501ListofabbreviationsADB-AsianDevelopmentBankAfCFTA–AfricanContinentalFreeTradeAreaAfDB-AfricanDevelopmentBankAIIB–AsianInfrastructureInvestmentBankASEAN–AssociationofSoutheastAsianNationsBRI–BeltandRoadInitiativeCAI–EU-ChinaComprehensiveAgreementonInvestmentCBAM–CarbonBorderA...