Why Do Chinese and Indian Positions on Climate Differ? Labor Surplus Absorption as a Key Factor

During international negotiations for the Rio Earth Summit of 1992, coalitions made up of countries from the Global South took shape, only to break up gradually over time. The climate positions of two leading emerging powers, the People’s Republic of China and India, have increasingly drifted apart from each other since 2010. This paper seeks to account for this drift by relying on structural factors. The analytical framework proposed here relies on three structural determinants of development: factor endowments, sector specialization, and labor surplus absorption potential. These determinants are complemented by a carbon variable to account for sustainability. This framework reveals a triangle of incompatibility between development, labor surplus absorption, and sustainability that highlights how the People’s Republic of China now has sufficient leeway to engage in more ambitious sustainable policies, while India still faces the mutual incompatibility of either pushing forward with economic development or committing to a sustainable agenda.