6 steps democracies must take to match China on climate action

Prof. Syed Munir Khasru

South China Morning Post
October 12, 2025

https://www.scmp.com/opinion/world-opinion/article/3328334/6-steps-democracies-must-take-match-china-climate-action

Global energy investment is projected to reach US$3.3 trillion this year, with some US$2.2 trillion directed towards clean technologies, double the amount flowing into fossil fuels. Yet beneath these impressive figures, a crisis of confidence is unfolding.

During the first half of this year alone, companies cancelled or scaled back more than US$22 billion in clean energy projects in the United States. These included high-profile battery facilities, storage systems and electric vehicle factories, resulting in about 16,500 job losses.

Major investors are retreating from net-zero alliances, and energy companies such as Equinor are writing down hundreds of millions in offshore wind investments because of regulatory uncertainty. The culprit isn’t technological inadequacy or lack of capital – it’s politics. The erosion of political will driven by populist pressures is reshaping climate policy across the world.

Leaders are walking back commitments, framing climate action as incompatible with affordability and energy security. The most significant threat to net-zero ambitions today isn’t engineering challenges but the systematic dismantling of policy frameworks that made the transition viable.

Populism offers simple narratives for complex problems. Climate policy, with its deferred benefits and immediate costs, presents an ideal target. Across the world, politicians under electoral pressure are rolling back carbon pricing, weakening emissions targets and promoting fossil fuel expansion as economic salvation.

The political logic is ruthlessly straightforward. Carbon taxes and emissions regulations impose visible costs today while climate benefits remain abstract and distant. Populist leaders exploit this disconnect, positioning themselves as defenders of ordinary people against elite environmental agendas.

The US exemplifies this dynamic. Tax credits and subsidies that drove clean energy deployment now face existential threats. The Department of Energy has cancelled clean energy grants, offshore wind permits have been reversed and investments have been frozen after regulatory reviews. Companies cite policy instability as the primary reason for project cancellations. The International Energy Agency has already trimmed its projections for US renewable capacity growth due to early phase-outs of tax credits.

This isn’t mere policy adjustment; it’s systematic dismantling framed as common sense. Populist rhetoric casts climate action as elitist and harmful to working people, exploiting anxieties about jobs and energy costs. Fossil fuel expansion gets repackaged as “energy security”. British Columbia’s carbon tax, long celebrated as a model, was repealed in April, demonstrating how even established frameworks can collapse under populist pressure.

The result is paralysis masquerading as pragmatism. Developing nations, already struggling with infrastructure and capital mobilisation, watch wealthy countries retreat and lose confidence in the transition’s viability. Policy instability drives capital towards safer jurisdictions, deepening global inequalities in transition capacity.

In China, in the first quarter of 2025, emissions fell by about 1.6 per cent even as energy demand rose, because additions in wind, solar and nuclear power grew faster than electricity consumption. By March, China’s renewable capacity had reached nearly 1,500 gigawatts, with renewables supplying roughly 36 per cent of electricity generation.

This progress stems partly from governance structures that insulate climate policy from electoral volatility. China’s five-year plans and renewable energy targets create institutional stability that survives leadership transitions. Long-term planning horizons allow China to absorb short-term transition costs that other countries struggle to manage.

Even so, China’s approach contains contradictions. Despite renewable capacity growth and Beijing’s 2021 pledge to halt overseas coal financing, large-scale coal plant construction continues domestically and previously committed international projects are still moving forward. China’s climate consistency reflects not pure environmental commitment but alignment between decarbonisation and strategic state objectives around industrial competitiveness. When those priorities shift, climate policy could follow.

The contrast with China forces an uncomfortable reckoning: authoritarian systems possess structural advantages for implementing policies requiring sustained commitment despite short-term costs. Democracies must develop stronger mechanisms to protect climate policy from political cycles if they are to remain competitive in the transition.

The solution isn’t abandoning democratic accountability but constructing frameworks that protect climate commitments from populist erosion.

First, independent climate institutions should be established with statutory authority to set binding targets and impose political costs for backsliding, regardless of which party holds power, reducing policy volatility.

Second, link climate policies directly to tangible social protections targeting affected workers and communities, retraining programmes, income support and regional development initiatives. When people experience concrete benefits, populist rhetoric loses resonance. Current approaches, where costs are visible and localised while benefits remain abstract, guarantee a political backlash.

Third, implement stable carbon pricing with revenues recycled directly to households through dividends or targeted support. Price signals drive decarbonisation while revenue recycling maintains public consent.

Fourth, deploy de-risking financial mechanisms addressing investment uncertainty. Long-term power purchase agreements, government guarantees and blended finance structures provide the stability investors require. When regulatory changes can wipe out billions in value overnight, clean energy investment risks becoming untenable.

Fifth, evolve international frameworks towards enforceable obligations with trade-related consequences. Carbon border adjustments create incentives for global policy alignment while protecting domestic industries. When climate policy becomes economically advantageous, political calculations shift fundamentally.

Finally, confront inequity directly. Climate policies perceived as unfair or burdening low-income, rural or industrial communities risk a populist backlash. Transition policies must prioritise equity as a political necessity.

The challenge isn’t whether we can achieve net zero but whether democratic systems can sustain commitment long enough to deploy technology and capital at the necessary scale. Only by understanding how populism exploits climate policy vulnerabilities and building institutional resilience can democracies overcome the political derailment of climate ambitions. The clock is ticking, and political time is running out faster than planetary time.