A migrant worker listens to radio on his tricycle cart parked next to a billboard promoting environment protection with the slogan "Environment protection starts from you and me" on display at the Central Business District of Beijing, June 5, 2017.
A migrant worker listens to radio on his tricycle cart parked next to a billboard promoting environment protection with the slogan "Environment protection starts from you and me" on display at the Central Business District of Beijing, June 5, 2017.

China may appear set to seize the global leadership on climate change due to the U.S. pull out of the Paris agreement, but it will have to pay a heavy cost for such a move as Washington’s withdrawal would result in a sharp reduction of available funds for environmental projects, and Beijing may have to fill some of the gap.

Shortly after U.S. President Donald Trump announced his decision to withdraw from the Paris climate agreement, China reiterated its commitment to the deal and issued a joint statement with the European Union saying the pursuit of clean energy “will become a main pillar of their bilateral partnership." That prompted widespread speculation that China could replace the United States as the world leader in reducing harmful carbon emissions.

But some environmental activists say China will find it difficult to establish global leadership in a situation where Chinese companies are investing in polluting mines and industries under the Belt and Road program.

The challenge for Beijing is to revamp its program of shifting industrial overcapacity to other countries and stop Chinese companies from exporting polluting factories to less developed countries that have lax environmental laws.

“Our concern is that those investments that China is making abroad are in line with both the local environmental regulations, but also the Paris agreement,” said Greenpeace Global Policy Advisor Li Shuo. “What is indeed part of the concern, we are talking about exporting, for example, coal power plants, then it is almost unavoidable that the pollution that is associated with such a project will be translated into other countries as well.”

Concerns about the financial challenge thrown up by the Trump administration's decision was also voiced by the Chinese foreign ministry. "Developed countries should fulfill their obligations under the UNFCCC (United Nations Framework on Climate Change) and Paris agreement to offer financial support to developing countries through the green climate fund and mechanism," said ministry spokesperson Hua Chunying.

Li praised China for its remarkable success in stalling the rise in carbon emissions for three successive years. But said emerging as a global leader may be difficult.

“This is not a black or white situation. I think (on the issue of) Chinese advancing on international climate action, there are indeed a lot of setbacks in other fields,” he said.

He pointed out that Chinese cities still suffered from heavy smog, and Chinese companies were investing in polluting businesses abroad.

Power grid stand against the residential and offic
Power grid stand against the residential and office buildings in Beijing as the capital of China is shrouded by mild pollution haze on June 5, 2017.

The Chinese economy is held down by tremendous overcapacity in traditional sectors like coal, steel, and cement, and most of them are extremely polluting. China faces the prospects of laying off millions of workers to reduce overcapacity. Transferring overcapacity to other countries was one reason why the Belt and Road program was formulated.

But Beijing may be forced to sacrifice a part of the ambitious program if it wants to take moral leadership on the climate change issue, analysts said.

The only gain for Chinese President Xi Jinping from the Trump decision will be in the form of rhetoric, Simon Baptist, chief economist, Asia at The Economist Intelligence Unit (The EIU) said.

“This gives Xi Jinping an opportunity to pursue his agenda of increasing China's soft power. I mean he will certainly give some rhetoric about being a leader on climate change,” Baptist told VOA. “(But) China is far from being an environmental leader in a way a country like, maybe Denmark or Sweden could be considered to be. I mean it is quite a carbon intensive economy.”

China's environmental activists are extremely uneasy because they fear a sharp reduction in funds for green projects. They also fear U.S.-based companies may cut their investments in emission reduction programs. American companies like Apple and Coca-Cola have emerged as role models in the task of establishing environmentally friendly production and distribution systems.

Office workers wearing face masks walk on a street
Office workers wearing face masks walk on a street as Beijing is hit by polluted air and sandstorm, May 4, 2017.

Ma Jun, director of the Institute of Public and Environmental Affairs in Beijing, said there was some uncertainty about whether the Trump administration's decision would mean less fund allocation by World Bank and Asian Development Bank on green projects.

“That is part of the uncertainties. We all know that they (World Bank and Asian Development Bank) can be much impacted by America. ...I hope that they will continue to support the fight against climate change,” Ma told VOA. “I (also) heard from some of the American NGO partners that they are having difficulty to get the government (funds).”

Ma even appealed to U.S. states and multinational companies to differ from Washington and express their commitment to climate change goals.

FILE - A man wears a face mask as he walks across
A man wears a face mask as he walks across a pedestrian bridge during a dust and sand storm in Beijing, May 4, 2017.

Several states and large corporations have said they intend to move forward with U.S. commitments to the Paris agreement.

Governor Jerry Brown, who heads the largest state of California, was in Beijing this week to sign an agreement with the Chinese president on reducing emissions.

One day before the decision, Chinese Premier Li Keqiang told his German counterpart, Angela Merkel, that his government will remain committed to the Paris deal, and "with tremendous efforts, China will move towards the 2030 goal step-by-step steadfastly."