Friday, November 13, 2009

China Getting Serious About Carbon While US Dithers

In a Financial Times piece yesterday, Gordon Conway summarizes the findings of the task force working on the energy-related aspects of China's next 5 year plan:
The report is to be presented to CCICED in Beijing on Thursday and to Premier Wen Jiabao on Friday. The proposals are partly based on a set of energy demand scenarios produced by the Chinese Energy Research Institute. One adopts a continuation of current trends that will result in the production of nearly 13bn tonnes of CO2 per year by 2050. A second, produced as a “low-carbon scenario”, reduces emissions to nearly 9bn tonnes. A third, more radical “enhanced low-carbon” scenario would produce peak emissions around 2025, reducing to 5bn tonnes by 2050.
It looks like China is moving toward a very serious approach of "decoupling" economic growth from carbon emissions, led by the public rather than the private sector. It has broader carbon goals, like reducing carbon emissions per unit GDP 20-23% over 2010-2015, but also the specific goals of how to go there through energy efficiency and low-carbon energy sources:
The Chinese plan is to reduce energy consumption per unit of GDP by 75-85 per cent by 2050. It will be achieved through industrial restructuring and efficiency gains in every economic sector, including new low-carbon cities that avoid suburban sprawl and prioritise public transport.
The energy mix will progressively change. In the medium term there will be an increase in renewable energy and nuclear power, with 50 per cent of generating capacity coming from low-carbon sources by 2030. By 2050 all new power sources will be low carbon.
Of course it's still not clear which approach Premier Jiabao will take, and there's a big difference between 13 billion tons, almost twice their current emissions, and 5 billion tons, significantly below current US and Chinese emissions. Still, some snippets in the article from Conway, who worked on the report, suggest that they are leaning towards more ambitious approaches because they understand the economic value of decarbonization.

He says that China worries about being locked into outmoded industrial structures in a low-carbon world (perhaps also about being hit by carbon tariffs from developed countries). Furthermore, they recognize that clean energy technologies will drive growth in the first half of the 21st century, as Tom Friedman writes over and over and over albeit correctly. China's government is obsessed with growth because that's what maintains stability under their authoritarian regime, and they may favor a crash investment in decarbonization as a means of creating growth.

What significance does this have for the US? It bodes very well for international climate negotiations, yet it puts pressure on us to stop holding back. We can't point the finger at the growing developing nations any more, as the Obama administration continues to do. Even though China is not responsible for the historical emissions causing current warming, they're taking aggressive steps to slow their emissions growth because they are worried about climate change and understand the economic potential of clean energy. The burden is on the US to speed up our emissions reductions and get more ambitious as the EU has. If Copenhagen fails, it will now be because of the US, not China.

Secondly, it shows that a government-planned and government-led program on carbon emissions may be the best approach to tackle such an urgent problem as climate change. We'll have to wait and see if their plan works. But, as our mobilization for World War II demonstrated, a Keynesian and/or socialist approach of public investment and public ownership of parts of the energy sector can create the leverage to exert fast transformations in an economy.

That's not to say that market approaches to pollution don't work. Cap-and-trade worked in the 90's in reducing acid rain-causing SO2 emissions. The ETS, or European Trading System, has helped the EU be on track to hit its Kyoto targets (see Joe Romm's Climate Progress post here). However, market approaches can easily be filled with loopholes that limit their effect, as the Waxman-Markey bill that passed out of the House this summer shows. A direct investment approach such as China's seems better suited to rapid transformation.

The planet needs a more aggressive approach from the United States government, and so does our moribund economy.

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