A blessing or a curse: China’s Arctic involvement and its environmental policy to prevent further climatic change and pollution

doi:10.21203/rs.3.rs-3116054/v1

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A blessing or a curse: China’s Arctic involvement and its environmental policy to prevent further climatic change and pollution

https://doi.org/10.21203/rs.3.rs-3116054/v1

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published 16 Aug, 2023

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The protection and sustainable use of environmental resources is one of the most salient tasks in Arctic regional governance, given that the region is a particularly fragile zone threatened by global warning and polar pollution. In recent years, as the People’s Republic of China has significantly increased its economic presence in the High North, whether and how Beijing’s Arctic engagement has influenced its efforts to prevent further climatic change associated with global warming and the accumulation of toxic substances are particularly important questions in the study of Arctic politics and global environmental governance. Borrowing insights from the costly signalling literature, this article presents an investigation of these questions. Contrary to the popular “Western-based” perspective that Beijing’s Arctic involvement will inevitably exaggerate human-induced environmental hazards, I argue that China’s pursuit to integrate itself into Arctic affairs and foster a responsible great power image actually incentivize it to pledge more ambitious environmental policies as a costly signal to demonstrate that the rising power is willing to adhere to the Arctic’s existing norms and rules instead of challenging the status quo. Thus, China’s engagement can contribute to environmental governance and sustainable development in the Arctic region. Relying on a set of time-series error correction models and ordinary least-square regression models, the analysis shows that China’s Arctic engagement is positively correlated with its environmental policy stringency. Taken together, these findings advance our understanding on the implications of under-studied state actors for Arctic sustainable development and environmental governance, suggesting that the international community can benefit from accepting China into the Arctic instead of pushing it away from the circle.

Arctic environmental governance

sustainable development

climate change

global warming

Chinese foreign policy

costly signalling

Ever since the new millennium, Arctic environmental governance has become an increasingly hotly-discussed topic in both scholarly and policymaking circles. In a human civilization whose history, continuation, and flourishing are made possible by fossil fuels, the Arctic region and Eurasia which possess vast reserves of commercially valuable mineral resources naturally become the focus of a large number of nation-states, international organizations, multinational corporations, development banks, indigenous peoples, along with other political and societal entities (Ambrosio et. al. 2022; Filimonova et. al. 2023; Libman and Obydenkova 2013 2018; Obydenkova 2022a). Importantly, the Arctic supplies the global market with roughly 10 percent of petroleum and 25 percent of natural gas, primarily from its onshore sources (Chen 2017). According to a 2008 U.S. Geological Survey, it is claimed that “the total mean undiscovered conventional oil and gas resources of the Arctic are estimated to be approximately 90 billion barrels of oil, 1,669 trillion cubic feet of natural gas, and 44 billion barrels of natural gas liquids” (U.S. Geological Survey, 2008). Concurrently, the Arctic happens to be a particularly vulnerable zone threatened by climate change and polar pollution. The ongoing increase in average air temperatures near the surface of Earth manifests the Arctic three to four times faster compared to other parts of the world (Rantanen et al. 2022). Summer-time Arctic ice is currently melting at an unprecedented speed and is estimated to disappear completely in ten years from today (Mead 2022). The polar ecosystem which are mostly composed of barrens, tundra, and waters, is extremely delicate with longer recovery span (Pietikäinen 2018). Over the past several decades, consequences of economic development including the unprecedentedly rapid rise of global average temperature, increasingly frequent extreme weather events, the unregulated release of pollutants into the air and the ocean, have caused significant detrimental effects on the Arctic’s ecosystem health and biodiversity, resulting in catastrophic environmental issues such as Arctic amplification and polar ice melting (Canosa et al. 2020; Ford et al. 2021).

In the context of global environmental changes and the urgent task to protect the Arctic region from worsening climate conditions, the rise of China and its increasing economic presence in the High North are one of the most popularly-debated issue surrounding Arctic regional governance today. As a younger, less-known, but salient non-Arctic state, the implications of the PRC’s Northern outreach on Arctic international security and great power politics have become the focus of countless op eds in major media outlets like the New York Times, the Washington Post, and the Wall Street Journal (Sengupta and Myers 2019; Morello 2019; Dou 2018). Meanwhile, the challenges of sustainable development and the role of different actors (nation-states and international organizations such as the European Union or the Arctic Council, for example) are also the focus of a considerable amount of growing academic research (Izotov and Obydenkova 2021; Nazarov and Obydenkova 2022; Lanteigne and Ping 2015; Mišić and Obydenkova 2022). However, despite it is widely acknowledged among scientists that human industrial operations profoundly affect the world’s environmental and meteorological systems, from little to no scholarly works have been conducted to empirically examine whether and how China’s active engagement in the Arctic influences its environmental policy practices. In other words, does Beijing’s pursuit to integrate into Arctic regional governance promote or undermine its commitment and effort to sustainable development and environmental protection? Given that the prevention of further global warming and the sustainable use of environmental resources are one of the most important issues in both Arctic regional governance and Chinese foreign policy, these questions remain surprisingly overlooked by scholars. Importantly, if the Asian power’s attempt to integrate itself into Arctic affairs motivates it to direct more resources into the international collaboration which aims to tackle the ongoing climate crisis, the Arctic can benefit from encompassing more actors despite their heterogeneous political institutions. Moreover, environmental collaboration can consolidate and foster diplomatic, political, and entrepreneurial networking, augment understanding and trust across different actors. If, however, the oppositive proves to be true, there may be increasing confrontation in this already fragile icy-land due to the perils of prioritizing economic development and economic benefits over global environmental values (GEV). Nevertheless, we presently have no indication of how China’s massive Arctic outreach influenced its commitment to sustainable development, in particular its environmental policy-making.

To engage with this research gap, I borrow insights from the costly signaling literature to propose a theoretical explanation for how Beijing’s expanding presence in the Arctic region can promote its efforts to facilitate environmental protection and sustainable development. Geographically, as a rising power which locates in the East Asian region, China does not have any territorial jurisdiction in the Arctic circle. Hence, notwithstanding Beijing accrediting itself as a “near-Arctic state” (近北极国家) as well as an “important stakeholder in Arctic affairs” (北极事务的重要利益攸关方), its participation in Arctic regional affairs can only be achieved through cooperating with conventional Arctic states such as Russia, Canada, Norway, Finland, along with other stakeholders. As such, it is unlikely that the Chinese government would intentionally seek to antagonize these conventional Arctic states by attempting to induce a profound shift in the status quo. Instead, a more plausible strategy is that the PRC seeks to consolidate itself into the existing Arctic regional governance structure through adapting to the existing rules and norms, despite these are typically Western-established and -centered. Concomitantly, China’s willingly adaption to the Arctic region’s current system/order/rule/norm may incur some non-trivial costs for itself. Such costs stem from the fact that most (if not all) conventional Arctic countries are skeptical about whether the rising power harbors ill-meaning intentions behind its Northern outreach. For this reason, what the Chinese government needs is an approach to demonstrate that it does not seek to unilaterally exploit conventional Arctic countries by taking away their natural resources for its own economic and security interests, leaving those states to face human-induced environmental deteriorations on their own. In reality, a pivotal strategy employed by the PRC to fulfil this function is to raise its level of environmental policy stringency, a costly move to signal that its promise to pledge more ambitious environmental targets and policy actions is truly sincere.

This research makes two major contributions. First and foremost, it suggests that in order to manage the ongoing environmental crisis in the Arctic circle, what is urgently required is not merely a development in meteorological and atmospheric science, but also a solid improvement in the international community’s joint effort to implement global environmental values. Specifically, while there is a large and vibrant body of scientific research on the relationship between climatic change and the fragile Arctic ecological system, existing scholarly works fall short of combining science with real-world international relations, struggling to provide a clear political proposal for nation-state actors involved in the Arctic to tackle sustainable development challenges. Importantly, preventing irreversible environmental change is a fundamental public good that governments are entitled to provide to citizens, and the provision of such public good is not simply a scientific issue, but also a policy issue. At present, China has become a significant political actor in Arctic regional governance through its massive commercial activities and vast investments in Arctic scientific research, and this Eastern power happens to be the world’s largest emitter of greenhouse gas, producing nearly 30 percent of global greenhouse gases and 27 percent of world’s carbon dioxide as of 2022 (World Bank Group 2022). Apparently, a discussion on Arctic sustainable development and environmental protection without accounting for China’s critical role would be incomplete. For this purpose, the article aims to provide a pragmatic political proposal for conventional Arctic states to engage with the PRC and utilize its economic wealth to advance the transnational effort to prevent further Arctic climatic change.

Second, this article presents a not-Western, Chinese perspective on challenges and opportunities in Arctic environmental governance. Presently, despite there are some excellent Western scholars such as Maurizio Marinelli (2018) who speak in favor of China’s environmental efforts, the mainstream view is that Chinese activities in the High North are essentially less environment-friendly and are always associated with escalating man-made ecological crises, and therefore a more combative policy to surveil and curtail the PRC’s Arctic presence is urgently in need. Here, I posit that the narrative which politicizes Chinese engagement as something linked to pollution, contamination, and global warming can arguable be criticized as ideologically driven. However, I shall also make clear that the priority of this article is not to condemn these popular yet biased misperceptions, but rather, it strives to explain how Chinese stakeholders perceive China’s role in Arctic environmental governance, and through what mechanisms they attempt to assure other states that the PRC can contribute to prevent further environmental catastrophes in the region.

The rest of this paper proceeds as follows. First, it expounds upon Beijing’s increasing engagement in the High North and the Western-based realist-driven concerns surrounding these activities. Next, I postulate a costly signaling mechanism to articulate how the PRC seeks to assure conventional Arctic actors that its vow to act as a responsible great power, particularly its commitment to prevent further climatic change, global warming, and pollution in the polar region is truly genuine. The following section discusses results from my empirical analyses, which utilize a set of times-series econometric models. Last, this article highlights important findings and conclude remarks. Critically, my research has important implications for both scholars and policymakers.

While the first wave of scholarly research exploring China’s Arctic policy has only started in recent decades, the Eastern power’s outreach toward the High North is by no means a new phenomenon. Historically, as early as in the 1920s, the former Republic of China (中华民国政府) has officially engaged in Arctic governance by signing the Svalbard Treaty which regulates the de-militarization of the Arctic archipelago of Spitsbergen. During the period between the Second World War and China’s Reforms and Opening-Up in the late 20th. century, Beijing’s activities in the Arctic region were scarce. However, starting from the 1990s, in consequence of the collapse of the Soviet Union and the meteoric rise of the PRC itself, China has placed the Arctic circle on its official diplomatic agenda and has dramatically increased its presence in the region (Wu 2022). In December 2001, Beijing was formally accepted into the World Trade Organization, allowing the Eastern power to collaborate with an array of Western trading partners and better incorporate itself into the global market. Three years later, in July 2014, the Chinese government established its first scientific research station, namely, the Yellow River Station (黄河站), at the Norwegian Svalbard Islands capital Longyearbyen. In February 2013, despite security concerns raised by the United States legislators, Canadian regulators approved its oil and gas company Nexen Inc. to be taken over by Chinese state-owned oil enterprise China National Offshore Oil Corp. (CNOOC Ltd.) at the price of 15.1 billion U.S. dollars – this constitutes the largest ever foreign company takeover in the history of China (Rocha 2013). A few months later, China was admitted to be included in the Arctic Council as an observer member, along with India, Japan, South Korea, Italy, and Singapore. In June 2017, the Chinese government released an official document titled Vision for Maritime Cooperation under the Belt and Road Initiative (“一带一路”建设海上合作设想). The Initiative incorporated the Arctic region into Beijing’s “Belt and Road Initiative” (BRI) for the first time, announcing that China seeks to participate in Arctic regional governance with other nation-state actors, specifically in “conducting scientific surveys of navigational routes, setting up land-based monitoring stations, carrying out research on climatic and environmental changes in the Arctic, as well as providing navigational forecasting services” (National Development and Reform Commission 2017). In the following year, the Chinese government published its first comprehensive White Paper on China’s Arctic policy (中国的北极政策白皮书), introducing its proposal to construct a Polar Silk Road (PSR). Importantly, Beijing’s 2018 Arctic White Paper is considered as “a historic step for China’s Arctic engagement” (Tillman et al. 2018). In October 2022, the United States’ House Foreign Affairs Committee estimated that the Eastern power has spent roughly 90 billion U.S. dollars’ worth of foreign direct investments in the Arctic circle (House Foreign Affairs Committee 2022).

The rising power’s expanding commercial and scientific activities in the High North, coupled with its assertive rhetoric to ascribe itself as a “near-Arctic state” (近北极国家) and an “important stakeholder in Arctic affairs” (北极事务的重要利益攸关方), have not gone overlooked by conventional Arctic nation-states and regional organizations, and have in fact elicited extensive discourse on how China’s involvement will influence Arctic regional security and environmental governance (Dong 2017). Among Western-based observers, the dominant view of Beijing’s Arctic outreach is grounded in realist thoughts, leading the perceptions of Chinese engagement intent to be aligned with suspicion and vigilance, or to put differently, a “China Threat” judgement. To date, extensive scholarly literature and published government documents contend that the rising power may possess a strategic interest in challenging and shifting the current Arctic regional norms, warning that “China is now strong enough to be a ‘norm maker’ or even a ‘shaper’ in Arctic affairs” (Stephen 2019). For example, Marc Lanteigne (2017) asserts that many traditional Arctic stakeholders are wary that “a strategy of revisionism in the region was being tacitly but steadily constructed by Beijing”. In a similarly-motivated analysis, Rebecca Pincus (2020) alarms that Beijing’s cooperation with Conventional Arctic states “has the potential to pose the most direct threat to the United States”. Byers and Covey (2019) argue that China’s rapidly developing capacities in the Arctic requires concerns as these capacities may be susceptible to a security dilemma. In May 2019, at the Arctic Council, former U.S. Secretary of State Mike Pompeo bashed Chinese investment in the Arctic and called upon conventional Arctic states to prioritize on the “China Threat” issue over global warming which “may or may not occur in 100 years” (Morello 2019).

Consistent with such security-oriented criticisms, a much smaller but important body of studies have expressed significant concerns over the implications of Chinese activities on the Arctic’s fragile environment, emphasizing that further human-induced climatic disasters may occur if the rising power continues to expand its Northern outreach. In a 2019 interview with High North News, Timo Koivurova, a Finnish scholar in Arctic law and government, alleged that Beijing’s increasing presence “contributes a lot to the environmental problems of the Arctic” (Stephen 2019). In 2021, the Brookings Institute published a report titled Northern Expedition: China’s Arctic activities and Ambitions, in which it condemns Chinese companies for causing an environmental disaster in a mining project at Yukon, Canada (Doshi, Huang and Zhang 2021). In a similar setting, Pavel Devyatkin, Senior Associate of the Arctic institute, notes, “China’s rise as an industrial power has produced black carbon emissions that have played a significant role in the warming Arctic”. In a recent published article, Versen, Mnatsakanyan, and Urpelainen (2022) contend that “China’s interest in the Arctic is largely economic in nature” such that its engagement has “little to do with maintaining the Arctic environment”.

As such, it is unambiguous that among some Western-based scholars and pundits the prevailing view tends to default China as an ill-meaning actor whose Northern outreach has been jeopardizing the already problematic Arctic environmental conditions. With respect to those environmentalist criticisms, I do not attempt to claim that China’s presence does not have implications on Arctic environment, because scientists generally do acknowledge that industrial operations, particularly those in mineral extraction and infrastructure-building sectors, can result in negative consequences on Arctic ecological system – this is true for China as well as for any other country. However, I shall point out that the existence of environmental externalities should not be treated as the basis for one to speculate that Chinese engagement cannot have any positive influence on Arctic environmental protection and sustainable development, or that Chinese activities can only be linked to pollutions and climatic disasters. To put differently, the fact that a policy issue has ramifications does not naturally imply that it cannot generate beneficial effects. Critically, as a non-Arctic state which is enthusiastic about consolidating itself into the region, it is also plausible that the rising power inclines to make contributions to alleviate the ongoing climate change crisis instead of to escalate it. Theoretically, these positive effects may eventually offset and potentially overcome the negative impacts in the long run. Notwithstanding this reasoning is logically rational, from little to no research to date has been conducted to examine this proposition.

To start this section, let us first consider an often-raised question in political science research domains: how can leaders demonstrate to their audiences that the signals they send are sincere?

In international relations, political actors frequently interact with each other through sending signals. Signals are intended to convey certain information. For example, a politician can promise that she will “introduce legislations to cut CO₂ emissions once elected”, or “distribute environment aid to foreign governments to improve their economic conditions within the framework of sustainable development”, or threaten to “impose harsh sanctions against countries which fail to meet their international climate obligations”. Indeed, leaders make all sorts of claims all the time, yet in absence of any significant punishment in case they renege on their words, such costless communications would carry little weight and therefore are essentially inconsequential (Jervis 1989). Importantly, “cheap talks” are not only be futile, but can also yield severe deleterious consequences, the latter is particularly true when leaders intentionally convey faulty information to hide their aggressive motivations, a commonly used foreign policy tactic to exploit other players. In crisis bargaining models, for example, states that misrepresent private information usually benefit from their counterparts’ credulity (Achen and Snidal 1989).

Consistent with the broader signaling literature, the “cheap talk” dilemma lies at the heart of the Western-based discourse on whether the rising power is genuinely inclined to contribute to Arctic environment and security governance. As Tom Schelling (1966) puts it famously, “the hardest part is communicating our own intentions”. Is it perhaps the case that China simply seeks to exploit Arctic mineral resources for its selfish economic benefit at the cost of environmental sustainability – after all, the PRC itself is not an Arctic country so any environmental damage left behind would have to be taken care of by conventional Arctic states? Indeed, not only traditional Western states share such realist-driven concerns, even Russia, which has established a bilateral Comprehensive Strategic Partnership of Coordination (全面战略协作伙伴关系) with Beijing since 2014, has also been cautious and alarmed that China “could present an economic rival in the Arctic region” (Chater, 2016). While Beijing has consistently promised that it “will actively respond to climate change in the Arctic, protect its unique natural environment and ecological system, promote its own climatic, environmental and ecological resilience”, how can other actors distinguish the message China conveys as credible or deceptive (Ministry of Foreign Affairs of the People’s Republic of China 2018)?

Within the rationalist field of research, a generally-acknowledged solution to the credibility problem is costly signaling. Normatively, costly signaling refer to the mechanism that political actors actively impose some non-trivial costs on themselves when conveying messages, and therefore strive to assure their audiences that the signal they send does not come with a catch. The logic here is that an ill-meaning actor should continue to send misleading messages so long as the communication is costless, whereas if the sender is not hesitant to attach non-trivial costs (money, reputation, personal political future, transaction costs, etc.) to the signal, it is likely that the signal can be trustworthy. Deborah Larson (2000) famously notes, “Policymakers are more likely to infer that another state’s concession is a sincere sign of a desire to improve relations if the concession is relatively costly”.

In the context of China’s Arctic engagement, I posit that Beijing has undertaken a costly signaling strategy to cope with the mounting suspicions among conventional Arctic states. The central proposition I make here is that the Chinese government’s attempt to further participate in Arctic regional governance incentivizes it to advance its effort to combat the ongoing environmental crises such as global warming and pollutions – such effort serves as the cost China chooses to bear in its signaling process. Here, one might be curious about why China wants to focus on the environmental dimension? I offer two plausible explanations. First, conventional Arctic states are deeply disturbed by climatic change. Across 9 million square miles at the Northern end of the Earth, the Arctic permafrost is melting gradually yet more rapidly than previously predicted, which in turn damages the villages, railways, hospitals, along with other infrastructures building on it (United Nations 2022). Scientists now estimate that for each unit increase in the planet’s average temperature, the permafrost will produce four to six years-worth of greenhouse gases that fuel global warming (Welchj 2019). Unambiguously, the ramifications of Arctic warming are global rather than regional. However, the eight conventional Arctic countries are the main victims – as Arctic climatic change is approximately three times faster than the global average, 1C degree rise elsewhere means 3-4C degrees warming in the High North. Concurrently, China is the world’s largest emitter of greenhouse gas, releasing 11.47 billion metric tons of carbon dioxide emissions in year 2021 (Daniels 2022). China’s unique role in the international combat against global warming, intertwined with Arctic countries’ desperate desire to tackle climatic change, offers the rising power a well-grounded justification to get involved in Arctic regional governance. Second, while climatic crisis is catastrophic, it is ironically less sensitive in comparison to traditional power-oriented security issues, at least as perceived by many Western policymakers. As discussed in the previous section, the tradition Western view of China’s Arctic involvement is realist-driven, subscribing the interaction with Beijing as a zero-sum game. Nevertheless, most Western politicians can agree that the international cooperation tackling global warming to secure sustainable development is a positive-sum game. This perception is well-illustrated in a recent RAND publication which claims, “in the Arctic, as in the rest of the world, the United States sees China as a potentially destabilizing force, with the economic and military power to try to bend the established order to its liking”, but also declares that “there are opportunities to cooperate—on climate change, for example, or pollution control” (Rand Review 2022). Therefore, a costly signal in the environmental dimension is less likely to be mis-interpreted by Western audiences as malicious and strategic.

As such, China has strived to adopt a series of environmental-protection and restoration measures, signaling its endorsement of global environmental values. At the legislation level, the Chinese government passed several laws and signed international agreements to take a more prominent leadership in the global commitment to tackle climate change. For example, Chinese lawmakers explicitly uses rhetoric of global environmental values and included references for sustainable development in the Beijing-based Asian Infrastructure Investment Bank (AIIB) (Hall, et. al. 2022; Filimonova et. al. 2023; Obydenkova 2022b). In April 2017, China and Finland signed Joint Declaration between the People’s Republic of China and the Republic of Finland on Establishing and Promoting the Future-oriented New-type Cooperative Partnership (中国和芬兰关于建立和推进面向未来的新型合作伙伴关系的联合声明) at Helsinki, which underlines the agenda to “deepen cooperation on circular economy, resource utilization efficiency and sustainable development”, highlighting that the two nations will promote cooperation on “waste management, renewable energy, utilization of biomass energy, sustainable water resources management, carry out information exchange in environmental protection, air quality and environment monitoring technology” (Ministry of Foreign Affairs of the People’s Republic of China 2017). In June 2021, China signed an agreement with the United States, Denmark, Norway, and a number of other countries to prevent unregulated fishing in the High Seas of the Central Arctic Ocean (Danilov 2021). In September 2020, Chinese President Xi Jinping delivered an impressive speech at the United Nations general assembly by announcing that China will reduce carbon emissions to zero by year 2060 – this announcement is considered by many global environmental activists as “the most important step in tackling the climate crisis since the Paris Climate Agreement” (Ambrose 2020).

In accordance with these legislations and public vows, the Chinese government has undertaken critical measures at the policy implementation level. As early as in 1999, 50 Chinese polar researchers participated in China’s first Arctic expedition, which was perceived to have “fully demonstrated the Chinese scientists' strong sense of responsibility for the global changes and environmental problems and their positive contributions to scientific understanding of the North Pole” (China 1999). To 2021, China has conducted twelve times of scientific expedition at the Arctic, addressing key environmental issues including ocean de-acidification, synthetic radionuclide, and marine plastic litter (Xinhua 2021). Concomitantly, China’s renewable development such as its cumulative installed wind capacity and solar capacity now ranks the global highest, reaching the world’s share of 39 percent and 36 percent, respectively (Xie 2022). According to a Science article, China’s coals consumption, the primary source of its greenhouse gases, has decline continuously since 2014 such that “China can lead on climate change” (Wang and Wang 2017).

Consequently, Beijing’s commitment and effort to combat global warming and contribute to Arctic environmental governance have not gone unnoticed among Western-based scholars and pundits. For example, in a recently published paper, Filimonova, Obydenkova, and Vieira (2023) argue that the PRC has signaled to the international community about it “willingness to fight actively against global warming”. In a similarly-motivated analysis, Anastassia Obydenkova (2022a) suggests that China clearly seeks to foster a positive global image of environmental-friendly and benevolent. Another comparative study demonstrates the importance of people and public environmental actions in China that usually supported by local and regional political elites in PRC (e.g., Demchuk et. al. 2022). A different set of studies unveil China’s active involvement and contribution to high-level forums on energy governance (Tosun and Shyrokykh 2022; Obydenkova 2022c). In a 2019 interview, Sanna Kopra, a senior fellow at The Arctic Institute, claims that taking a stronger leadership role in international cooperation against global warming significant mitigates the prevailing “China Threat” sentiment and generates affinity and trust for the rising power among conventional Arctic states and eventually, “help China to legitimize its stronger engagement in Arctic regional affairs” (Stephen 2019).

Based on the above discussion, I hypothesize that the PRC’s proactive attempt to engage in Arctic region affairs advances its commitment and effort on environmental protection and sustainable development.

4.1 Data and variables

In order to substantiate the theoretical claim I postulated above, this section utilizes time-series yearly data on the PRC’s Arctic engagement and its determination to prevent environmental damages. The data I use started from 1990 to 2020.

My dependent variable of interest is the costly signal China sends to its international audiences, particularly conventional Arctic states, to demonstrate its environmental protection and restoration commitment and effort. Consistent with some existing works, the dependent variable I construct is environmental policy stringency, a multi-dimensional index of country-specific environmental laws and regulations (Mavisakalyan, Otrachshenko and Popova 2023). The index is developed and presented by the Organization for Economic Co-operation and Development (OECD), and aims to measure how stringent a nation-state actor’s regulation is in terms of penalizing behaviors that damages its environment (e.g., air and ocean pollution, extra-legal releases of greenhouse gases, burring and dumping toxic substances). According to the OECD library, environmental policy can be defined as “the degree to which environmental policies put an explicit or implicit price on polluting or environmentally harmful behavior” (https://www.oecd-ilibrary.org/environment/data/oecd-environment-statistics/environmental-policy-stringency-index_2bc0bb80-en). The index ranges from 0 to 6, lower values suggest higher levels of state tolerance of human-induced environmental harming, and vice versa. Methodologically, there are two reasons for why I use China’s environmental policy stringency to capture its costly signals. First, for a message to express some political information, it must be made visible to the target audience. Critically, an increase of China’s environmental policy stringency indicates that the rising power has actively undertaken a series of environmental protection policies, such as raising pollutants tax rates and increasing governmental spendings to develop renewable energy. Logically, these policy changes can be directly observed by foreign actors. Second, increases in environmental policy stringency incurs significant costs on economic interests, and therefore operates the “costly” function. Extensive literature has demonstrated that higher levels of environmental policy stringency reduce major pollutants emissions (e.g., CO2, NOx, and SOx) in the long run at the expense of domestic firms and consumers’ economic benefits – more strict environmental policy inevitably raises the costs for buyers and suppliers in terms of productivity and competitiveness (Galeotti, Salini and Verdolini 2020; Yirong 2022). As such, these necessary but non-trivial costs should attach some weights on Beijing’s signal and renders it “costly”.

The core independent variable of interest is China’s proactive attempts to engagement Arctic regional governance as an important actor. Empirically, as these attempts are expected to cause significant impacts on the Eastern power’s environmental policy stringency, such attempts must be major events rather than ordinary involvement moves. Accordingly, I employ three separate explanatory variables to capture China’s major Arctic outreach events. All these variables are constructed as binary. Specifically, the first explanatory variable is Chinese Polar Research Institute’s 2003 establishment of China’s first research base in the High North the Yellow River Station - this critical step is evaluated by some conventional Arctic states as “PRC’s first major play in the Arctic” (House Foreign Affairs Committee 2022). Second, I consider China’s admission to the Arctic Council (AC) as another major involvement into the North. Despite observer members in the AC are not entitled voting privileges, the status nevertheless allows presentation of perspective, and therefore essentially signifies China’s formal participation in the most important international organization in the region. This variable is lagged one unit to account for the dynamic that China’s engagement attempt should logically occur prior to its formal observer status admission. The last key independent variable is the 2018 publication of China’s first Arctic White Book. This variable is included because it is widely viewed by Chinese stakeholders as “a historic step for China’s Arctic engagement” (Tillman, Yang and Nielsson 2018).

In addition to the core explanatory variables, I also construct and include a number of control variables in the model. While controlling for confounders is certainly necessary, it is worth notifying that the time-series yearly dataset I compiled in this research has a total of 31 observations. Hence, overfitting problem stands out as a major concern. Methodologically, while social scientists do frequently use small samples to make statistical inferences, it is worth notifying that including excessive variables in a small sample analysis would render the regression coefficients representing more statistical noises than valuable information. In their landmark political science quantitative analysis paper, Keele, Linn, and Webb contend that 10 observations are required for each single parameter if the data in use is independent and identically distributed (Keele, Linn and Webb 2016). As for time-series data, it is obvious that this criterion shall reasonably rise to at least 15. Concurrently, controlling for a laundry list of variables can induce severe multicollinearity problem which would biases the t value downwards, particularly in cases where those variables are inter-correlated (Slinker and Glantz 1985). To that end, I strive to include an parsimonious number of confounders and avoid to place potentially inter-correlated variables in the same models.

As such, two potential confounders are considered in the model specification. Specifically, economic conditions have clear relationships with governments’ environmental policy (Raymond 2004; Requate 2005). Simultaneously, China’s economic development can theoretically be correlated with its Arctic outreach. That is, wealth can fuel the rising power’s motivation to expand its commercial activities to other regions of the world. To that end, I first control for one macroeconomic indicator, GDP Growth. Second, I control for one microeconomic indicator, GDP Per Capita Growth. Date for these variables is sourced from the World Bank Database (https://data.worldbank.org/).

4.2 Results and discussions

For hypothesis testing, I utilize two different types of time-series regression models, namely, the generalized error correction (EC) models and ordinal least square (OLS) regression models. Mathematically, the basic form of the generalized EC can be expressed as the follows:

𝛥𝑌𝑡=𝛼₀+𝛼^∗₁𝑌𝑡−1+𝛽^∗₀𝛥𝑋𝑡+𝛽^∗₁𝑋𝑡−1+𝜖_𝑡

Here, 𝛥𝑌𝑡 stands for the difference of the outcome variable, 𝑌_𝑡−1 is the lagged version of the outcome variable, followed by differenced and lagged independent variables. For the past several decades, error correction models are universally used in different fields of studies as a valuable method modelling time-series data (Akram et al. 2008; Uddin 2008; Liu and Shumway 2006). Empirically, while generalized ECs are traditionally used when a long-run common stochastic trend is present in the time series, recent developments in political science research has now demonstrated that the method can provide sufficiently accurate results for both stationary and integrated time series, regardless of whether unit roots and cointegration exist (De Boef and Keele 2008; Christakis and Fowler 2013; Haber and Menaldo 2011; Volscho and Kelly 2012). Therefore, I estimate three groups of models using generalized EC method. Each group of models focuses on one key explanatory variable. Here, I do not place all three core independent variables in one model in order to avoid multicollinearity problem – clearly the three major events in China’s Arctic outreach can be inter-related. The analytical results are presented in Table 1 to 3.

Table 1

China’s major Arctic outreach (Yellow River Station) and its environmental policy stringency Notes: Standard errors presented in parentheses. * p < 0.1, ** p < 0.05, *** p < 0.01.
Variables	Model 1 Δ Environmental policy stringency	Model 2 Δ Environmental policy stringency
Environmental policy stringency _t−1	-0.089	-0.094
Environmental policy stringency _t−1	(0.064)	(0.064)
Yellow River Station	0.227**	0.243**
Yellow River Station	(0.109)	(0.113)
Δ GDP Growth	-0.033
Δ GDP Growth	(0.023)
GDP Growth _t−1	-0.023
GDP Growth _t−1	(0.021)
Δ GDP Per Capita Growth		-0.038
Δ GDP Per Capita Growth		(0.024)
GDP Per Capita Growth _t−1		-0.026
GDP Per Capita Growth _t−1		(0.022)
Constant	0.279	0.281
Constant	(0.226)	(0.210)
Observations	30	30
AIC	-9.645	-10.057
BIC	-2.639	-3.051

Table 2

China’s major Arctic outreach (Admission to the Arctic Council) and its environmental policy stringency Notes: Standard errors presented in parentheses. * p < 0.1, ** p < 0.05, *** p < 0.01.
Variables	Model 1 Δ Environmental policy stringency	Model 2 Δ Environmental policy stringency
Environmental policy stringency _t−1	-0.172*	-0.175*
Environmental policy stringency _t−1	(0.091)	(0.090)
Admission to the Arctic Council	0.494**	0.516**
Admission to the Arctic Council	(0.220)	(0.223)
Δ GDP Growth	-0.017
Δ GDP Growth	(0.022)
GDP Growth _t−1	0.004
GDP Growth _t−1	(0.020)
Δ GDP Per Capita Growth		-0.015
Δ GDP Per Capita Growth		(0.023)
GDP Per Capita Growth _t−1		0.010
GDP Per Capita Growth _t−1		(0.020)
Constant	0.094	0.046
Constant	(0.215)	(0.195)
Observations	30	30
AIC	-10.323	-10.825
BIC	-3.317	-3.819

Table 3

China’s major Arctic outreach (Arctic White Book) and its environmental policy stringency Notes: Standard errors presented in parentheses. * p < 0.1, ** p < 0.05, *** p < 0.01.
Variables	Model 1 Δ Environmental policy stringency	Model 2 Δ Environmental policy stringency
Environmental policy stringency _t−1	0.019	0.022
Environmental policy stringency _t−1	(0.049)	(0.047)
Arctic White Book	-0.116	-0.109
Arctic White Book	(0.156)	(0.156)
Δ GDP Growth	-0.027
Δ GDP Growth	(0.025)
GDP Growth _t−1	-0.009
GDP Growth _t−1	(0.022)
Δ GDP Per Capita Growth		-0.027
Δ GDP Per Capita Growth		(0.025)
GDP Per Capita Growth _t−1		-0.006
GDP Per Capita Growth _t−1		(0.021)
Constant	0.180	0.147
Constant	(0.238)	(0.215)
Observations	30	30
AIC	-5.482	-5.572
BIC	1.524	1.434

[Table 1–3 insert here]

Table 1 (the first group of models) examines how Beijing’s establishment of the Yellow River Station at Norway influences its environmental policy stringency. I choose to include each control variable in separate models in order to avoid overfitting problem. Recall that the general rule of thumb for time-series analysis is 15 observations for each parameter and that such upper bound has already been exceeded in the EC models constructed here. For each model I calculate and present its Akaike information criterion (AIC) and Bayesian information criterion (BIC), indicators of how perfect a statistical model fits. For both criteria, the lower their values are, the better the model is specified.

In the first group of models (Table 1), it is clear that model 2 has lower AIC and BIC values than model 1. In model 2, the regression coefficient of Yellow River Station is 0.243, and is positive and statistically significant at the 0.05 level. The result from model 1 is identical. These findings suggest that China’s first major Arctic involvement Yellow River Station does increase its environmental policy stringency.

In the second group of models (Table 2), the key explanatory variable is admission to the Arctic Council. In model 1 and model 2, the regression coefficients of admission to the Arctic Council are jointly statistically significant at the 0.05 level. The coefficients are positive, illustrating a positive relationship between the core independent variable and the dependent variable of interest. Alike the first group of models, these results provide some apparent support for our hypothesis.

The third group of models aim to examine the statistical relationship between Arctic White Book and the Chinese government’s environmental policy stringency. Surprisingly, in both models, the regression coefficients of Arctic White Book fail to reach statistical significance at the conventional levels. There are two plausible explanations for such result. First, it is possible that while China’s publication of its first Arctic White Book is important, it is essentially a verbal policy announcement instead of a real actional outreach in reality. Hence, it may be the case that this symbolistic political posture does not carry sufficient weight to alter its environmental policy. Second, this insignificance may simply be a product of overfitting problem – after all, there are four regressors included in each model in Table 3 while the sample size is relatively small.

4.3 Robustness tests

Now, I test the robustness of the empirical findings using alternative statistical methods. Specifically, because the outcome variable of interest is essentially continuous, the traditional OLS approach comes in as a handy method. However, it is worth notifying that for time-series data, heteroskedasticity and particularly, auto-correlation across time appear to be common properties. If left unaddressed, the OLS estimators would no longer be best, linear, unbiased, estimators (BLUE). Therefore, in line with some existing quantitative works, I adopt Newey –West robust standard errors to account for the heteroskedastic and serial-correlated error structure (Shahbaz and LeitÃ 2013; Bottomley et al. 2023). There are three groups of models estimated, each group of models focuses on one key explanatory variable. Their results are shown in Table 4–6.

Table 4

China’s major Arctic outreach (Yellow River Station) and its environmental policy stringency Notes: Newey-West standard errors presented in parentheses. * p < 0.1, ** p < 0.05, *** p < 0.01.
Variables	Model 1 Environmental policy stringency	Model 2 Environmental policy stringency
Yellow River Station	1.511***	1.613***
Yellow River Station	(0.275)	(0.247)
GDP Growth	-0.189***
GDP Growth	(0.054)
GDP Per Capita Growth		-0.191***
GDP Per Capita Growth		(0.058)
Constant	1.958***	1.768***
Constant	(0.547)	(0.544)
Observation	31	31

Table 5

China’s major Arctic outreach (Admission to the Arctic Council) and its environmental policy stringency Notes: Newey-West standard errors presented in parentheses. * p < 0.1, ** p < 0.05, *** p < 0.01.
Variables	Model 1 Environmental policy stringency	Model 2 Environmental policy stringency
Admission to the Arctic Council	2.370***	2.428***
Admission to the Arctic Council	(0.198)	(0.171)
GDP Growth	-0.001
GDP Growth	(0.035)
GDP Per Capita Growth		-0.017
GDP Per Capita Growth		(0.032)
Constant	0.435	0.269
Constant	(0.376)	(0.300)
Observation	31	31

Table 6

China’s major Arctic outreach (Arctic White Book) and its environmental policy stringency
Variables	Model 1 Environmental policy stringency	Model 2 Environmental policy stringency
Arctic White Book	1.297*	1.493**
Arctic White Book	(0.654)	(0.631)
GDP Growth	-0.168*
GDP Growth	(0.097)
GDP Per Capita Growth		-0.146
GDP Per Capita Growth		(0.102)
Constant	2.521**	2.135*
Constant	(1.127)	(1.092)
Observation	31	31
Notes: Newey-West standard errors presented in parentheses. * p < 0.1, p < 0.05, * p < 0.01.

[Table 4–6 insert here]

In Table 4, the key independent variable, Yellow River Station has positive and statistically significant regression coefficients across model 1 and model 2. The coefficients are significant at 0.01 level in both models. In addition, GDP Growth and GDP Per Capita Growth are also of statistical significance at the 0.01 level, but their relationships with China’s environmental policy stringency are negative. Here, despite results for control variables are not the main focus of this research, such results are somewhat interesting. To interpret, the results for control variables indicate that higher levels of economic development (both macro and micro) are associated with easing of regulations on environmentally harmful behavior. Such finding chimes well the traditional concern that economic interests may jeopardize environmental well-being.

In Table 5–6, the results are identical to Table 4. Specifically, both the coefficient estimates of admission to the Arctic Council and Arctic White Book are positive and statistically significant at the conventional levels. Taken together, these results provide robust evidence for my theoretical claim that China’s outreach toward the High North increases its commitments and efforts on environmental protection and restoration.

Environmental protection and sustainable development are increasingly playing a pivotal role in Arctic Regional governance. As a particularly vulnerable zone of the planet, the Arctic environment is facing severe threats from global warming, dwindling biological diversity, and the accumulation of toxic substances. These challenges are largely a product of human industrial activities mainly in the distant South but also in the neighboring Eurasia (e.g., Libman and Obydenkova 2014), and partly within the Arctic circle itself. Critically, the substantive effects of climatic change necessitate joint effort from the international society, including both conventional Arctic states and non-Arctic states, nation-states and international organizations, multinational corporations and indigenous peoples. From an ethics perspective, any actor involved in Arctic affairs has moral responsibility to contribute to environmental protections of the High North, addressing the importance of sustainability, and preventing further climatic change associated with global warming. Indeed, the ramification of prioritizing economic interests over global environmental values is visible as in many parts of the world the escalating climatic crises have already caused catastrophic consequences on human societies.

Sadly, despite the consensus that Arctic environmental governance requires international collaboration rather than confrontation, the High North has gradually evolved into an arena for traditional great power competition and contention. In early 2022, the outbreak of the Russian-Ukraine War has torn the Arctic apart and rendered the Arctic Council essentially non-functioning. In this fragile diplomatic zone, China, a rising great power which has increasingly involved in Arctic affairs over the past decades, stands out as a key player whose behaviors will have profound influence on not only regional security and stability but also environmental well-being. Importantly, how does Beijing intend to balance between its Arctic economic presence and its commitment to tackle global and local climatic changes? Notwithstanding the extensive studies on Arctic environment and Chinese foreign policy, social scientists have not started to pay much attention to this question.

Borrowing insights from the costly signaling literature in traditional security studies, this article investigates the relationship between the PRC’s Northern outreach and its effort to sustainable development and climate governance. The analysis yields some highly interesting results. Contrary to the prevailing Western-based belief that China’s growing presence, especially its foreign investments in natural resources extractions, will inevitably exaggerate the Arctic’s already problematic climate, I suggest that the Chinese government has been attempting to integrate itself into Arctic regional governance in a very careful manner, striving to assure Western stakeholders that the Eastern power does not seek a revisionist approach. Specifically, the theoretical proposition here is that each time Chinese decisionmakers make a major step to engage in the region, they actively raise the country’s environmental policy stringency which incurs non-trivial costs on the domestic economy, and therefore signals to foreign audiences that the rising power does not intend to exploit Arctic resources in an unscrupulous and self-centered manner. As such, my research belies concerns of the widespread “China Threat” view among many Western-based observers. In other words, China does not pose a critical threat to Arctic environment. If anything, the opposite appears to be true.

However, this research does not suggest that China’s further Arctic involvement will not encounter much pushbacks. From a political science perspective, environmental protection and restoration is merely one dimension of Arctic governance. As considered by many realists, power, security, and strategic influence are in fact the main issues at stake, and global warming can only come as secondary. As Nengye Liu (2020), director of the Centre for Environmental Law at Macquarie Law School, puts famously, “as long as the Chinese economy keeps growing, and China continues to rise in the Arctic, suspicions, concerns, and push-back will remain, no matter how hard China may defend itself”. As such, the anxiety regarding China’s Northern outreach may in fact continue to increase within the broader context of the ongoing Sino-US peer competition, which mainly took place in the security dimension, but can certainly be intertwined with environmental topics. As such, I believe it is important for both the PRC and conventional Arctic states to prepare for an Arctic Regional Governance Version 2.0, that is, an agenda that explicitly distinguishes between security governance, economic development, and environmental governance. From a Chinese perspective, if Western-based politicians continue to bash China’s presence in the High North and condemn that all of its Arctic commercial, scientific, and research activities are strategic and ill-meaning, such reaction can antagonize the Eastern power and incentivizes it to take a much more combative stance. If this is the case, the Arctic environment is likely to suffer from intensifying great power competition. Therefore, an Arctic Regional Governance Version 2.0 should seek to avoid the politization and securitization of China’s Arctic involvement.

Acknowledgments

I wish to thank Anastassia Obydenkova for her excellent comments on early versions of this article.

Funding

The author declares that no funds, grants, or other support were received during the preparation of this manuscript.

Competing Interests

The author has no relevant financial or non-financial interests to disclose.

Author Contributions

The author is a solo-author, hence the solo-author contributes to the entire article.

Data Availability Statement

The dataset used in this research is available from the author on request.

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A blessing or a curse: China’s Arctic involvement and its environmental policy to prevent further climatic change and pollution

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Abstract

1 Introduction

2 China’s increasing presence in the Arctic region and Western-based environmentalist pushbacks

3 Beijing’s Arctic engagement and its commitment to environmental sustainability: A costly signalling framework

4 Empirical analyses

4.1 Data and variables

4.2 Results and discussions

4.3 Robustness tests

5 Conclusion

Declarations

References

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