Master of Arts / Department of Economics / Wayne Nafziger / Although the ozone layer is vital to life on Earth, as a common resource it has been the subject of rational exploitation. With ozone depletion a global (rather than merely regional) problem, measures to address it have necessarily been international efforts. The international treaty that addressed ozone depletion, the Montreal Protocol (with its subsequent amendments), has widely been hailed as a success. However, the triumphs of the Montreal Protocol are inseparable from its Multilateral Fund, whose creation was a prerequisite for developing nations, including juggernauts China and India, to ratify the Protocol. Since its inception the Fund has supplied over $2.5 billion to initiatives that support the phase-out of ozone-depleting chemicals in developing nations. These projects have increasingly employed market mechanisms to achieve efficient results, and have generated positive profits for participating firms. Funded initiatives have included upgrading capital, educating maintenance workers, production buyouts, public awareness, and institutional strengthening. Aside from ensuring the success of the overall Protocol, this last item will likely be the Multilateral Fund’s most enduring legacy, as inherent shortcomings of the Fund have largely been attributed to its status as a pioneering financial mechanism. The Multilateral Fund has broken new ground in international environmental regulation and shown that success on ecological issues is indeed possible at the global level, leading many to hope that the Fund will serve as a model for future mechanisms to address climate change. While the more complex chemistry and economics of climate change make such a ready duplication of the Multilateral Fund’s success unlikely, the Fund’s role in strengthening institutions that address ecological concerns has undoubtedly smoothed the way for future international environmental action.

Maintaining rapid economic growth and protecting national sovereignty have been immovable national aims expressed in Chinese foreign policy behaviour since economic reforms were introduced in the late 1970s. Climate change, for its part, is a global concern and monetarily expensive issue which necessitates collective action. At face value, encouraging economic expansion and guarding national sovereignty could easily be viewed as conditions which oppose national actions to mitigate climate change and its potential effects. However in recent years, China has adopted a positive foreign policy tone expressing interest in mitigating climate change through the multilateral United Nations (UN) climate regime. Hence, China is a curious and perhaps contradictory participant in the UNFCCC regime’s institutions. This thesis seeks to answer the following research question: “Why is Chinese foreign policy able to balance supporting national economic development objectives and protect its sovereignty while also increasing UNFCCC multilateral cooperation to abate climate change?” In the course of answering this question, China’s foreign policy motivations in the climate regime are scrutinized using economic nationalism. Briefly, economic nationalism is applied here as an economically oriented ideological construct which incorporates sovereignty and national interests together with diverse economic policies, including interdependence. Supporting this thesis’ research is the three-fold argument which remarks that: First, China’s multilateral climate change engagement is consistent with established foreign policy goals to sustain national economic development and preserve national sovereignty. Second, China has redefined its foreign policy to accommodate the ideological construct of economic nationalism, embodied in the course of its international economic and image-status benefits. Third, as a consequence, comprehending Chinese climate foreign policy consistency will contribute to improving general knowledge and understanding of the climate regime and the methods it uses to encourage developing countries to increase their respective participation in mitigating climate change. This thesis studies China’s strategic cooperation with the climate regime using three climate-related cases, as well as a contrast case which compares contemporary climate mitigation with the abatement of ozone depleting substances (ODS), a precursor environmental issue to climate change. The four cases include: the Global Environment Facility (GEF), the Multilateral Fund (MLF), the Clean Development Mechanism (CDM), and the Group of 77 (G77). On the first, the GEF is the climate regime’s original redistributive funding mechanism and China receives the largest quantity of GEF funding. Moreover, China’s experience with the GEF on climate change is contrasted with its earlier experience in combating ODS using the MLF financial redistributive mechanism. Second, the CDM is the foremost financial redistributive mechanism to pay for climate mitigation and clean development projects in developing countries. China, for its part, is host for the largest share CDM projects and the economically valuable GHG Certified Emission Reductions (CERs) they issue. Third, China is the de facto leader for developing countries in climate negotiations through the G77 negotiating bloc. The conclusions reached show that while China’s tone has changed through increased openness and participation, fundamentally, Chinese climate policy is based upon maintaining the continuity of its national interests. Modern economic nationalist ideology has deepened China’s foreign policy engagement on climate change by reconceptualising the global environmental issue as an economic development and image-status growth opportunity. Essentially, for China which is a country that prides itself on high rates of economic growth and whose foreign policy staunchly defends its national sovereignty, embracing forces of globalization through the act of multilaterally engaging on climate change is by no means a contradiction and is rather fully consistent with supporting its longstanding foreign policy objectives.