china still wary of more ambitious international climate commitments

7/30/2019 China Still Wary of More Ambitious International Climate Commitments

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1 Center or American Progress | China Still Wary o More Ambitious International Climate Commitments

China Still Wary of More Ambitious

International Climate CommitmentsMelanie Hart December 7, 2012

From many perspec ives, China is a global powerhouse. China is he worlds second-larges economy in erms o gross domes ic produc , he worlds larges energy con-sumer, and a global leader in renewable energy inves men .1 China is also he worlds bigges greenhouse gas emiter.2

I is no surprise, hen, ha when i comes o global clima e change nego ia ions, such ashe U.N. Framework Conven ion on Clima e Change con erence curren ly wrapping up

in Doha, Qa ar,3 many na ions are looking or China o s ep up and play a role more inline wi h i s global economic and emissions s a us.

From a U.S. perspec ive, ha means demanding ha China play by he same rules in heclima e rea y ha will be developed be ween now and 2015, ra her han being rea edas a developing coun ry on par wi h Chad or he Congo. Some par ies wan ha new

rea y o require in erna ionally legally binding emission reduc ions or all hough

no he same amoun or all par ies. Tus ar, China has re used o endorse his kind o legal ramework and ins ead is s icking o he in erpre a ion o common bu di eren i-a ed responsibili ies, which crea es a rewall be ween he obliga ions o developed anddeveloping coun ries.4 Tis pu s he Uni ed S a es and o her developed na ions in one bucke , pu s China in a separa e bucke along wi h he poores coun ries in he world,and allows he later o make only volun ary commi men s o reduce heir emissionsas opposed o he manda ory commi men s reques ed o he developed coun ries.

Te Uni ed S a es has no problem allowing s ill-developing economies o make less-ambi ious emission-reduc ion commi men s. Wha he Uni ed S a es and o her developedna ions ake issue wi h is allowing hose coun ries o make commi men s ha are less binding a he in erna ional level han wha is expec ed o developed coun ries. Chinaanupper-middle-income coun ry, according o he World Bankhas a s anding volun ary clima e commi men under he 2009 Copenhagen Accord o reduce carbon in ensi y by 40 percen o 45 percen (based on 2005 levels) by 2020.5 Te rs phase o ha commi -men has been incorpora ed in o Chinas ve-year economic plan and ra i ed by ChinasNa ional Peoples Congress, so ha commi men is legally binding in a domes ic sense.6


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Un or una ely, hose ypes o commi men s rom China are no enough o ge he reso he world o sign on o a new global clima e rea y. Developed coun ries in par icular wan China o upgrade his commi men in wo ways:

Swi ch rom an emission-in ensi y reduc ion arge reducing he amoun o carbondioxide emited per uni o GDP o an absolu e reduc ion arge .

Commi o ha arge via he same orm o in erna ional mechanism ha will beexpec ed o bind all coun ries equally, regardless o developmen s a us.

U.S. nego ia ors have s a ed ha he Uni ed S a es is unlikely o sign on o a new clima erea y un il China commi s o ha rea y in he same way ha everyone else does.7 Buhere is plen y keeping China rom making a legally binding in erna ional commi men

i ha is wha i akes o ul ll his expec a ion.

Whereas he global communi y generally views China as an economic powerhouse wi h

plen y o room o maneuver on clima e issues, he view rom Beijing is vas ly di eren .From Chinas perspec ive, he pas 30 years o rapid economic grow h in no way guar-an ees ha hey will be able o make i up in o he ranks o higher-income economiesand easily raverse he middle-income rap. Chinese leaders have a deep ear ha ins eado ransi ioning smoo hly rom lower-income o upper-income s a us, heir economy could ollow he pa h o Malaysia, Tailand, and he Philippines and all in o a period o economic s agna ion.8 Chinas sluggish grow h hroughou 2012 clearly illus ra es ha

he coun ry is no immune o an economic slowdown, and i is impor an o rememberha any major slump brings wi h i a very high risk ha he Chinese Communis Par y

will lose public suppor and be orced o or ei i s au hori arian poli ical power.

Wi hin ha con ex , Chinese leaders are no ye willing o ake on in erna ional clima ecommi men s ha could reduce heir exibili y o keep he economy growing. Tadoes no mean here is no room or nego ia ion. I does mean, however, ha in he near

erm China will con inue approaching in erna ional clima e nego ia ions wi h morecau ion han leadership. Te nego ia ors now mee ing in Doha will need o keep his inmind as hey spend he nex hree years hashing ou he erms o a new rea y wi h heambi ion ha i be equally applicable o all, in he erms o he Durban Pla orm.9

Tis issue brie will iden i y some o he key ac ors ha are s ill holding Beijing back rom aking hese s eps. Tese ac ors include:

Rising energy demands and consump ion due o an emerging middle class

Marke dis or ions providing ew incen ives o ransi ion o renewable energy

Local governmen s avoiding Beijings cen rally manda ed energy and clima e agenda


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Rising energy demand and consumption in China

Here in he Uni ed S a es, energy consump ion is rela ively a due o our sluggisheconomy and recen roll-ou s o policies encouraging companies and consumers o useenergy more e cien lysuch as he Obama adminis ra ions uel e ciency s andards.10 Te U.S. energy mix is also changing or he beter. Coal consump ion is declining

rapidly due o decreasing na ural gas prices and recen Obama adminis ra ion moves oregula e coal emissions under he Clean Air Ac .11 Due o hese developmen s, he U.S.Energy In orma ion Adminis ra ion repor s ha coal will accoun or jus 37 perceno U.S. elec rici y genera ion in 2012, down rom nearly 50 percen in 2008.12 Overall,energy e ciency is up in he Uni ed S a es, and coal is on i s way ou , which means i isgeting increasingly easier or U.S. policymakers o reduce greenhouse gas emissions andmee global clima e arge s.

Even wi hou comprehensive clima e legisla ion, U.S. emissions have declined over he paswo years and he Uni ed S a es is ac ually on rack o mee i s Copenhagen goal o reducing

emissions by 17 percen (based on 2005 levels) by 2020, especially i he Environmen alPro ec ion Agency goes orward wi h regula ions on exis ing s a ionary power sources.13

Nearly he opposi e rend is occurring in China, however. Whereas U.S. emissions arealready on he decline, Chinas emissions are projec ed o keep growing un il 2030.14 Ta is because he Chinese economy as a whole is growing, and i s grow h is noclima e e cien . Chinas elec rici y demand is expec ed o double over he nex decadeand overall energy consump ion is projec ed o grow a whopping 60 percen be weennow and 2035.15 Mos impor an ly rom a clima e perspec ive is Chinas heavy depen-dency on coalsome hing no likely o change in he near u ure. Coal curren ly

accoun s or 70 percen o Chinas energy mix and coal consump ion grew 9.7 percen in2011 he bigges jump since 2005.16

Chinas s eadily rising coaland overall energyuse ransla es in o s eadily risinggreenhouse gas emissions, and a large chunk o hose emissions will come rom Chineseconsumers. Te rs hree decades o Chinas economic grow h ocused primarily onindus rial produc ion and xed-asse inves men s such as high-speed rail and o herlarge in ras ruc ure projec s.17 Ta has led o a major economic imbalance: Big indus ry and capi al inves ors have goten rich, bu Chinese consumers have been lef behind.Household consump ion accoun s or around 30 percen o Chinese GDPless han hal

he U.S. level (71 percen in 2010) and one o he lowes consump ion ra es in he world.18

Tis means Chinese ci izens purchasing power is lagging behind he coun rys over-all economic grow h. Chinese ci izens have wa ched indus rial and poli ical eli es gerich a he publics expense, and hey are demanding change.19 Going orward, Beijingabsolu ely mus rebalance he economy and provide more bene s or heir growingmiddle class, including an increase in consumer buying power. Ta will be grea or he


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global economy because increased Chinese consump ion will provide a new marke orproduc s rom around he world.

From a clima e perspec ive, however, hose changes hur because wha mos Chinese ci i-zens aspire o is he ype o li es yle we have here in he Uni ed S a es: bigger homes wi hcon inuous clima e con rol, more household appliances, and amily cars. Ta ype o con-

sump ion grow h is already underway in China, and i is riggering a surge in householdenergy consump ion and emissions. Tere is plen y o room or grow h: China consumesmore energy han he Uni ed S a es a he na ional level, bu China has more han our

imes as many people, so per capi a energy use is jus 24 percen o U.S. levels.20

o be sure, he Uni ed S a es has i s own energy and clima e problems, and he U.S. modelis no he model we would like o see China emula e. Ideally China will ollow he exampleo more carbon- and energy-e cien developed coun ries such as Japan or Germany. Tais wha Beijing aspires o, bu i s ill en ails a major consump ion increase because Japaneseand German ci izens s ill consume more han wo imes he energy per capi a as he

Chinese do.21

Regardless o he model China ollows, rom he Chinese ci izens perspec-ive here s ill is a lo o room or consump ion grow h, and as hey climb up he energy-

consump ion scale, he emission impac o ha grow h could be huge.

Even i Chinese leaders manage o reduce indus rial emissions, hey here ore s ill ace acon inuing emissions boom on he consumer side. Ta is why Chinas emissions are projec ed o keep increasing un il 2030 and why Chinas clima e nego ia ors are so resis an omake commi men s involving overall emission ou pu as opposed o emission in ensi y.22

Market interference makes the shift from fossil fuels to renewablesharder to achieve

Ideally Beijing could keep Chinas economy growing and sa is y middle-class consump-ion desires by expanding renewable energy o accoun or he new grow h. Ta would

enable he Chinese economy o keep growing while also moving he coun ry morerapidly oward a peak and even ual decline in annual emissions.

Chinas clean energy economy is undoub edly booming. China has he larges amouno renewable energy capaci y in he world wi h 133 gigawats o ins alled renewablecapaci y as o 2011more han wice he size o Germanys capaci y (61 gigawats) and35 percen larger han he U.S. marke (93 gigawats).23 Te problem is ha al houghChinas renewable energy capaci y is expanding, i s curren capaci y is s ill jus a dropin he bucke compared o he coun rys overall energy use, and ossil uel consump-

ionpar icularly coalis s ill expanding o make up ha shor all. In 2011 ossiluels accoun ed or more han 90 percen o Chinas primary energy consump ion.

Renewables, including nuclear and hydropower, added up o around 8 percen o he


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o al.24 Beijing is aiming o expand renewable consump ion o 11.4 percen o he coun-rys energy mix by 2015 and 15 percen by 2020,25 which will cer ainly be a subs an ial

improvemen . Given Chinas rapid grow h ra es, however, ha ra e o renewable expan-sion will no be enough o keep overall emissions rom climbing in he near erm.26

One big problem limi ing renewable roll-ou s in China is he ac ha he coun rys

power sec or is s uck a a hal way poin be ween he old, Sovie -s yle sys em and amore marke -based sys em like ha o he Uni ed S a es. Under he planned economy,governmen bureaus managed every s ep in Chinas power-produc ion processgenera-

ion, ransmission, and dis ribu ion ollowing op-down produc ion plans. In parallel wi h Chinas overall economic re orms, Beijing has gradually re ormed i s power sec ors by corpora izing genera ion and grid opera ions urning governmen bureaus in os a e-owned en erprisesbreaking up s a e-owned monopolies in o mul iple smallercompanies, and in roducing a degree o marke compe i ion among hem.27

Marke iza ion is limi ed, however, by he ac ha China s ill con rols u ili y pricing

via governmen manda e ra her han allowing prices o uc ua e based on supply anddemand, as hey should in a marke -based sys em. Beijing ears ha i u ili y prices were

o rise oo high or oo as , po en ial in a ion and social discon en could resul in masspro es s and declining public suppor or Communis Par y rule. o avoid ha andkeep consumers happy, he s a e dic a es wholesale and re ail elec rici y ra es and se s

hose ra es a submarke prices.28 U ili y ra es di er or commercial versus residen ialusers, wi h commercial users paying a higher ra e o subsidize he residen ial side andkeep prices low or Chinese households. Tese price con rols can make i impossible

or elec ric power genera ors o s ay a oa par icularly when coal prices are highsoo placa e hese genera ors, Beijing also se s prices or coal and o her inpu s, and pegs

hose prices a below-marke ra es.29

Tis marke in er erence has ar-reaching side e ec s or renewable energy. Wi h coalprices se ar i cially low, power genera ors have no pricing incen ive o inves in renew-able power, which is more clima e e cien bu also more cos ly. China has eed-in ari s

or wind and solar power o reduce cos s, bu he prese ari s are s ill much higher hanhe price o coal. On-grid prices or coal- red power are around 0.3 RMB per kilowat-

hour, bu wind runs be ween 0.51 and 0.61 RMB per kilowat-hour, and solar runs be ween 1 and 1.15 RMB per kilowat-hour.30 In o her words, even wi h he renewable

eed-in ari s, wind energy can cos wice as much as coal- red power or grid opera orso purchase, and solar can cos more han hree imes as much.

And since he selling prices or elec rici y are con rolled by he s a e, grid opera orscanno raise ra es o coun erac inves men cos s or renewable grid connec ions. Tisleaves grid opera ors no s rong incen ives o inves in he echnology upgrades needed

o hook up renewable power. As a resul , many o he wind and solar arms ha accounor Chinas rapidly expanding capaci y are s ruggling o ge hooked up o he na ional


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power grid.31 For hose providers who do manage o ge hooked in o a local sys em, hasys em may no be able o connec wi h Chinas overloaded cross-coun ry ransmissionlines, which allow providers o expor heir excess power o o her regions.32

Tese marke dis or ions resul in Chinas power genera ors s icking wi h coal, grid com-panies ransmiting and dis ribu ing coal- red power ins ead o renewable energy, and

Chinas emissions con inuing o increase.

Te Wes is curren ly ocused on rying o re orm u ili y pricing sys ems o incorpora eclima e impac s o make, or example, power companies pay a higher premium orheavily pollu ing energy sources.33 Bu China is s ill s ruggling o make prices re ecac ual produc ion cos s acking on environmen al cos s is even ar her away.

Beijing is working hard o nd solu ions o hese problems.34 Chinas Na ionalDevelopmen and Re orm Commission has wo new developmen s in he works: 1) aplan o require Chinas s a e-owned grid opera ors o purchase a cer ain percen age o

he power hey dis ribu e rom renewable sources; and 2) a plan o po en ially scraps a e price con rols or coal in an e or o make coal prices more marke based.35 Policy change is in he wings bu i will ake ime o implemen . In he mean ime, Chinasgreenhouse gas emissions will con inue o increase, and Chinese leaders will con inue odo all hey can o evade in erna ional calls or ac ions ha hey believe would cons rain

heir abili y o keep heir economy growing.

Beijings reluc ance o re orm Chinas problema ic u ili y sec ors is cer ainly no a validexcuse or clima e inac ion, so he in erna ional communi y should keep up he pres-sure or Beijing o do more on his ron . Such pressure is growing wi hin China as well,

which is he driving orce behind he upcoming Na ional Developmen and Re ormCommission policy re orms men ioned above.

Local governments are hindering national efforts to improve energyefficiency and reduce emissions

Cen ral leaders in Beijing are devo ing a huge amoun o poli ical will oward increas-ing energy e ciency and replacing ossil uels wi h renewables. Tey view his as asurvival issue, and no jus because o he nega ive environmen al e ec s o pollu ion.Te Chinese Communis Par y canno main ain enough ci izen suppor o s ay in powerunless hey keep he economy growing. Ta will require con inued access o energy supplies a s able ra es, and because Chinese demand is growing so rapidly, he globalmarke simply will no be able o provide enough coal o mee hose needs wi housending prices skyrocke ing.


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Environmen al pollu ion is also increasingly becoming a deal breaker or Chinese ci i-zens. Tey are urning ou in droves o pro es he cons ruc ion o new coal plan s, andBeijing is aking no ice.36

Where hings ge ricky is conver ing Beijings na ional-level policy manda es in o local-level ac ion. Chinese clima e o cials describe heir si ua ion as an inverse version o he

U.S. policy landscape.37 Te Uni ed S a es s ruggles o ge congressional policymakers osign on o major ederal policies, bu here is a huge amoun o ac ivi y going on a he s a elevel, and ha is resul ing in major change across he na ion. In China, however, Beijing ison board or more ambi ious energy and clima e policy ac ion, bu is s ruggling o ge localo cials o ac ually implemen hose policies, making real change hard o achieve.

Beijing uses a op-down arge sys em o give local o cials an incen ive o ac . Tey seenergy and clima e arge s in na ional ve-year plans such as he curren goal o reducecarbon ou pu per uni GDP by 17 percen be ween 2011 and 2015.38 Once Beijing se s hisoverall na ional arge , i hen parses individual arge s ou o he various local-level govern-

men s and rou inely evalua es local o cials o de ermine whe her hose goals are being me .

Bu hose local o cials are generally more in eres ed in evading hese arge s hanhey are in implemen ing hem, and here is enough slack in his sys em o allow many

o cials o do soand ge away wi h i . In he 11 h ve-year plan (20062010), orexample, Beijing se a na ional-level arge o reducing Chinas energy in ensi y heamoun o energy consumed o produce one uni o GDPby 20 percen . Ins ead o accomplishing ha wi h s eady gradual change, however, some locali ies allowed local businesses o opera e as usual or mos o he planning period and hen cu o residen-

ial power near he end o he plan erm o ensure hey me heir overall arge s.39

Overall, here are limi s o he ypes o meaning ul change Beijing can bring abouhrough op-down policy manda es. Wha Beijing really needs o do is o use marke

mechanismssuch as marke -based coal and u ili y pricing o give power compa-nies an incen ive o swi ch o renewables and consumers an incen ive o economize.Un or una ely, ha would bring a degree o economic and poli ical risk ha Chineseleaders may no be qui e ready o ace a his poin in ime. Again, hese in ernalproblems cer ainly do no cons i u e an excuse or clima e inac ion, bu hey are realproblems ha he in erna ional communi y should be aware o par icularly whenatemp ing o craf a clima e rea y ha Beijing can sign on o.

Conclusion

In conversa ions going on be ween U.S. and Chinese coun erpar s ou side o he o cialclima e nego ia ion process, some Chinese clima e o cials and analys s are showingincreasing openness oward he idea ha common bu di eren ia ed responsibili ies


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could be more like a sliding scale han a rewall. Tis would be more consis en wi h he way U.S. nego ia ors look a he concep . Chinese leaders realize ha as heir coun ry climbs up he developmen ladder, i will become increasingly di cul o align wi h hepoores developing coun ries in clima e alks. China is already acing huge pressure o

ake on more clima e responsibili ies in line wi h i s increasing economic migh , andha pressure will only increase going orward. I is in Beijings own in eres s o nd a

way o s ar edging oward some sor o middle-o - he-road s ra egy ha recognizesChinas changing economic s a us bu does no immedia ely lump China in wi h heUni ed S a es and o her already ully developed upper-income coun ries.

A presen , Beijing s ill does no appear o have come o an in ernal consensus on whaan accep able middle-o - he-road s ra egy migh look like. Chinas op decision-makingins i u ion or clima e policy is he Na ional Leading Small Group on Comba ingClima e Changea mul iminis erial policy coordina ion group ha includes 25 lead-ing o cials rom more han 20 di eren governmen agencies ranging rom he Wa erMinis ry o he Minis ry o Science and echnology.40 Bringing ha dispara e group o

consensus is no an easy mater.

Given he above-men ioned challenges ha China is curren ly acing domes ically, i isunlikely ha Beijing will agree o make an in erna ionally binding absolu e emission-reduc ion commi men be ore he 2015 Durban Pla orm deadline.41 From Beijings per-spec ive, ha is simply oo risky a his poin in heir economic developmen rajec ory.

Where Beijing likely does have more maneuvering room is on he legal na ure o heiremission-in ensi y commi men scommi men s o reduce he amoun o carbonemited per uni o gross domes ic produc . I is impor an o no e ha al hough Chinas

Copenhagen emission in ensi y commi men is only binding a a domes ic level, romhe Chinese Communis Par ys perspec ive, ailing o mee ha domes ic arge would be a poli ical disas er. Te par ys abili y o mee i s ve-year plans is a corners one o regime legi imacy. Upgrading ha in ernal plan-based commi men o a commi men

ha includes he in erna ional communi y should no be a major s ep or hem. I Chinacould do ha , i would go a long way oward bringing o her coun ries on board and lay-ing he groundwork or a new global rea y.

Bu China is no going o give he in erna ional communi y wha i wan s wi hou ge -ing some hing in re urn, and wha China wan s mos are clean energy echnology rans-ers rom he Uni ed S a es and o her developed coun ries. Basically, China wan s he

Uni ed S a es and o her developed coun ries o give i ree access o cuting-edge cleanenergy echnologies so ha i can ransi ion oward a low-carbon economy wi hou hav-ing o pay or in ellec ual proper y impor ed rom abroad.

Problem is, ha would likely give China a compe i ive edge over he Uni ed S a es inhe global clean energy marke . Ta migh be accep able o he Uni ed S a es i Chinas


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clean energy companies were no major U.S. compe i ors, bu a presen he opposi eis rue: Chinese companies are already domina ing global marke s or wind, solar, andsmar -grid echnologies.42 Since Chinese companies are already domina ing hese mar-ke s wi hou echnology assis ance, providing ha assis ance may give China an un airadvan age in hose marke s and make i impossible or U.S. companies o compe e,par icularly on price, because U.S. companies would be paying or heir clean energy

echnologiesvia research and developmen cos s or in ellec ual proper y licensingeesbu heir Chinese coun erpar s would no .

Fur hermore, Beijing is already drawing Washing ons ire in he clean energy sphere by ak-ing ac ions ha appear o viola e global rade rules a he Uni ed S a es expense. Chineseo cials are subsidizing heir clean energy companies via programs ha appear o be aimeda driving U.S. compe i ors ou o he marke , and ha is riggering rising rade ensions.43 Some Chinese companies are even s ealing proprie ary echnologies rom heir U.S.coun erpar s wi h wha appears o be aci consen rom Beijing. Many in Washing on,

or example, are closely ollowing an in ellec ual proper y dispu e be ween American

Semiconduc or Corp. and Sinovel, he Chinese wind urbine manu ac urer. AmericanSemiconduc or Corp. has clear evidence ha Sinovel s ole i s engineering secre s and used

ha in orma ion o manu ac ure and sell wind urbine equipmen based on AmericanSemiconduc or Corp.s proprie ary designs.44 Sinovel has s rong governmen backers inBeijing, however, and he case keeps geting hrown ou o Chinese cour s.45

Due o hese issues, i may be di cul or he global communi y o provide Chinesenego ia ors he ypes o echnology rans ers hey wan . Wi hou hose echnology

rans ers, hough, i may be di cul or Chinese nego ia ors o ge he o her bureau-cra ic agencies represen ed in Chinas clima e leading group o suppor he ypes o

legally binding commi men s ha he Uni ed S a es wan s.

One hing we can do o increase he probabili y o a success ul agreemen by he endo 2015 is make i a op priori y o nd a way around hese echnology concerns. TeUni ed S a es and China are already experimen ing wi h new rameworks or join in el-lec ual proper y developmen under he bila eral Clean Energy Research Cen ers, whichare governmen -sanc ioned projec s bringing U.S. and Chinese clean energy companiesand universi y research labs oge her o work on clean vehicles, advanced coal echnol-ogy, and energy e ciency solu ions or buildings.46 Tis join echnology develop-men could be a model or he ypes o echnology rans er ha speed Chinas access ohigher-end clean energy echnology wi hou puting U.S. rms a a disadvan age.

Many o he Chinese ac ivi ies ha are curren ly riggering rade ensions be ween heUni ed S a es and China will un or una ely be hard o cur ail in he shor erm. Tereare limi s o wha China can do o en orce in ellec ual proper y righ s wi hou a moreindependen cour sys em, or example, bu releasing he na ions cour s rom poli icalcon rol would also weaken he Chinese Communis Par ys abili y o main ain a grip on


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i s au hori arian power. Ta does no mean progress canno be made, bu i does meanprogress will likely require ou side- he-box solu ions. One way o address U.S. in ellec-

ual proper y concerns, or example, is o se up a hird-par y dispu e-resolu ion mecha-nism o reduce U.S. company reliance on he Chinese cour sys em. Te Uni ed S a esand China are curren ly discussing his op ion as par o he bila eral inves men rea y nego ia ions ha he wo coun ries relaunched his pas May.47

Luckily, hese ypes o echnology solu ions ha could help he Uni ed S a es and Chinacome o agreemen on he clima e ron would also address rade ric ions plaguing heU.S.-Chinese economic rela ionship more broadly, so here should be plen y o poli ical will bo h in Washing on and in Beijing o pursue hese discussions.

Overall, i does look like here is some room or maneuvering, and i does look easibleor he Uni ed S a es and China o come o some sor o agreemen be ween now andhe 2015 Durban Pla orm deadline. Te issues blocking ha agreemen will no be

resolved by he ime he Doha mee ing concludes, bu we do have ano her hree years o

work hese issues ou . In he shor erm, he leas we can expec rom U.S. and Chineseclima e nego ia ors is ha hey keep he communica ion lines open and con inue mak-ing s eady progress oward iden i ying wha a mu ually accep able 2015 clima e dealmigh ac ually look like. Finalizing a 2015 clima e deal will likely require ou side- he- box hinking and concessions rom bo h sides. Since he s akes could no be higher,however, ha should be some hing our wo na ions can accomplish.

Melanie Hart is a Policy Analyst for Chinese Energy and Climate Policy at the Center for American Progress.

Tanks to Andrew Light and Katie Valentine for their comments on and contributions to thisissue brief.


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Endnotes

1 China Overview, available athttp://www.worldbank.org/en/country/china/overview ; Frank urt School o Financeand Management and the U.N. Environmental Programme,Global Trends in Renewable Energy Investment 2012(2012), available at http:// s-unep-centre.org/publications/global-trends-renewable-energy-investment-2012 .

2 Chris Buckley, China Says is Worlds Top Greenhouse GasEmitter, Reuters, November 23, 2010, available at http://www.reuters.com/article/2010/11/23/climate-cancun-china-idAFTOE6AM02N20101123.

3 Doha Climate Change Con erence - November 2012, avail-able at http://un ccc.int/meetings/doha_nov_2012/meet-ing/6815.php .

4 Todd Stern, Statement to the House Committee on ForeignA airs, UN Climate Talks and Power Politics: Its Not aboutthe Temperature, May 25, 2011, available at http://www.state.gov/s/climate/releases/168093.htm; China ExpectsDoha Climate Con erence to Produce Balanced Result, Xinhua, November 22, 2012, available at http://english.peopledaily.com.cn/90883/8029611.html.

5 China Announces Targets on Carbon Emission Cuts, Xin-hua, November 26, 2009, available at http://news.xinhuanet.com/english/2009-11/26/content_12544181.htm .

6 Ibid.

7 Todd Stern, Remarks at Dartmouth College, August 2,2012, available at http://www.state.gov/e/oes/rls/re-marks/2012/196004.htm .

8 Beware the Middle-Income Trap: Chinas Roaring GrowthCannot Last Inde nitely, The Economist , June 23, 2011, avail-able at http://www.economist.com/node/18832106 .

9 Rebecca Le ton and Andrew Light, What to Expect in Doha:An Overview o the 2012 U.N. Climate Change Negotiations,Center or American Progress, November 27, 2012, avail-able at http://www.americanprogress.org/issues/green/news/2012/11/27/46139/what-to-expect-in-doha-an-overview-o -the-2012-u-n-climate-change-negotiations/.

10 The White House, Obama Administration Finalizes Historic54.5 MPG Fuel Efciency Standards, Press release, August28, 2012, available at http://www.whitehouse.gov/the-press-ofce/2012/08/28/obama-administration- nalizes-historic-545-mpg- uel-efciency-standard .

11 U.S. Energy In ormation Administration, Short Term EnergyOutlook: Coal, November 6, 2012, available at http://www.eia.gov/ orecasts/steo/report/coal.c m ; Final Mercury andAir Toxics Standards (MATS) or Power Plants, available athttp://www.epa.gov/mats/actions.html ; Mark Drajem andJulie Johnsson, Coal Plants Victory over EPA is Muted byNatural Gas Prices,Bloomberg , August 22, 2012, available athttp://www.bloomberg.com/news/2012-08-22/coal-plants-victory-over-epa-is-muted-by-low-gas-prices.html .

12 U.S. Energy In ormation Administration, Short Term EnergyOutlook: Coal.

13 U.S. Energy In ormation Administration, Short Term EnergyOutlook: Renewables and CO2 Emissions, November 6,2012, available at http://www.eia.gov/ orecasts/steo/report/renew_co2.c m ; Dallas Burtraw and Matt Woerman,

U.S. Status on Climate Change Mitigation (Washington:Resources or the Future, 2012), available at http://www.r .org/RFF/Documents/RFF-DP-12-48.pd .

14 Nan Zhou and others, Chinas Energy and Carbon EmissionsOutlook to 2050 (Berkeley, CA: Lawrence Berkeley NationalLaboratory, 2011), available at http://china.lbl.gov/sites/china.lbl.gov/ les/2050_Summary_Report_042811_FINAL.pd .

15 China Electricity Consumption to almost Double by 2020, Xinhua, December 21, 2010, available at http://news.xinhua-net.com/english2010/china/2010-12/21/c_13658772.htm;

International Energy Agency, World Energy Outlook 2012(2012), available at http://www.worldenergyoutlook.org/.

16 China Energy Consumption Rises at Fastest Pace in FourYears,Bloomberg , February 22, 2012, available at http://www.bloomberg.com/news/2012-02-22/china-energy-consumption-rises-at- astest-pace-in- our-years.html .

17 Eurasia Group, Chinas Great Rebalancing Act (2011), avail-able at http://eurasiagroup.net/pages/Chinas_Great_Rebal-ancing_Act .

18 Household nal consumption expenditure, etc. (% o GDP),available at http://data.worldbank.org/indicator/NE.CON.PETC.ZS.

19 Melanie Hart with Alex Lach, Satis ying Chinas RisingMiddle Class i n an Era o Economic Uncertainty, Center

or American Progress, October 12, 2012, availableat http://www.americanprogress.org/issues/china/news/2012/10/12/41412/satis ying-chinas-rising-middle-class-in-an-era-o -economic-uncertainty/.

20 Energy use (kg o oil equivalent per capita), available athttp://data.worldbank.org/indicator/EG.USE.PCAP.KG.OE.

21 Ibid.

22 China Vows Emissions Cutting E orts Ahead o Doha Con-erence, Xinhua, November 22, 2012, http://news.xinhuanet.

com/english/china/2012-11/22/c_123983609.htm.

23 Pew Environment Group, Whos Winning the Clean EnergyRace: 2011 Edition (2012), available athttp://www.pewenvi-ronment.org/news-room/reports/whos-winning-the-clean-energy-race-2011-edition-85899381106 .

24 P.R. China State Council, Chinas Energy Policy 2012(2012), available at http://usa.chinadaily.com.cn/opin-ion/2012-10/25/content_15844758.htm .

25 Ibid.

26 Zhou and others, Chinas Energy and Carbon EmissionsOutlook to 2050.

27 International Energy Agency, Chinas Power Sector Re-orms (2006), available athttp://www.iea.org/publications/reepublications/publication/chinapower.pd .

28 Anastassios Gentzoglanis, Chinas Electricity Industry at theCrossroads: New Challenges or Developing the Right Modelo Regulation,Chinese Business Review 11 (1) (2012): 7591;Keith Bradsher, Pinched by Price Controls, Power Plantsin China Scale Back,The New York Times,January 24, 2008,available at http://www.nytimes.com/2008/01/24/business/worldbusiness/24power.html; China Changes ResidentialElectricity Pricing,China Daily , June 12, 2012, availableat http://www.chinadaily.com.cn/bizchina/2012-06/12/content_15495789.htm ; James Williams and Fredrich Kahrl,Electricity Re orm and Sustainable Development in China,Environmental Research Letters 3 (4) (2008), available athttp://iopscience.iop.org/1748-9326/3/4/044009.

29 Wuyuan Peng, Coal Sector Re orm and its Implications orthe Power Sector in China, Resources Policy 36 (1) (2011):6071; Bing Wang, An Imbalanced Development o Coaland Electricity Industries in China,Energy Policy 35 (10)

(2007): 49594968.

30 Jim Bai and Leonora Walet, Uni ed Power Tari s MeanClearer Guidance or So lar Projects,China Daily , August2, 2011, available at http://www.chinadaily.com.cn/cndy/2011-08/02/content_13028967.htm; Liu Yiuy, WindFirms in Doldrums,China Daily , May 31, 2012,http://www.chinadaily.com.cn/cndy/2012-05/31/content_15430337.htm; China Sets Waste-to-Power Price Double That o Coal-Fired Plants,Bloomberg , April 10, 2012, available athttp://www.bloomberg.com/news/2012-04-10/china-sets-waste-to-power-price-double-that-o -coal- red-plants.html.
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| h ll b l l

31 Chen Yang, Wind Power Being Wasted, Peoples Daily ,August 3, 2012, available at http://english.peopledaily.com.cn/90778/7897503.html .

32 Charlie Zhu, China pushes wind power, but no quick payo or producers, Reuters, September 9, 2012, availabl e at

http://www.reuters.com/article/2012/09/09/us-china-windpower-idUSBRE8880J720120909.

33 Paul R. Epstein and others, Full Cost Accounting or the Li eCycle o Coal, Annals of the New York Academy of Sciences (1219) (2011): 7398, available at http://solar.gwu.edu/index_ les/Resources_ les/epstein_ ull%20cost%20o %20

coal.pd .

34 China to Re orm Prices in Energy Sector, Xinhua, February29, 2012, available at http://news.xinhuanet.com/english/china/2012-02/29/c_122767792.htm .

35 Guo Yuzhi, Ke zai sheng neng yuan pei e zhi you wangnian nei gong bu shi shi (Looks Promising or RenewableEnergy Quota System to Be Issued and Implemented ThisYear),Shang Hai Zheng Quan Bao (Shanghai SecuritiesNews), July 7, 2012, available athttp://news.xinhuanet.com/energy/2012-07/07/c_123382979.htm; FayenWong, China eyes sc rapping annual term coal contracts,Reuters, November 27, 2012, available at http://www.reuters.com/article/2012/11/27/china-coal-contracts-idUSL4N0961GQ20121127; Meng Fanbin, Integration o Energy Prices OKd,China Daily , December 6, 2012, availableat http://usa.chinadaily.com.cn/business/2012-12/06/con-tent_15992327.htm .

36 Chinese Protesters Clash with Police over Power Plant,Associated Press, October 22, 2012, available at http://www.guardian.co.uk/world/2012/oct/22/chinese-protesters-power-plant .

37 Chinese climate ofcials, personal communication with theauthor, Beijing, JulySeptember 2012.

38 Lan Lan, China to Reduce Carbon Intensity by 17% by 2015,China Daily , July 29, 2011, available at http://www.china-daily.com.cn/china/2011-07/29/content_13006047.htm .

39 Shai Oster, Beijing Gets Tough on Targets or Energy,The Wall Street Journal , September 10, 2010, available at http://pro essional.wsj.com/article/SB10001424052748703960004575481421432887654.html?mg=reno64-wsj .

40 Guo jia ying dui qi hou bian hua ling dao xiao zu (NationalLeading Small Group on Combatting Climate Change),overview and membership list available in Chinese on theNational Development and Re orm Commission website athttp://qhs.ndrc.gov.cn/ldxz/de ault.htm.

41 China Vows Emissions Cutting E orts Ahead o DohaCon erence, Xinhua, November 22, 2012, availableat http://news.xinhuanet.com/english/china/2012-11/22/c_123983609.htm .

42 Melanie Hart, China Pours Money into Smart Grid Technol-ogy (Washington: Center or American Progress, 2011),available at http://www.americanprogress.org/issues/green/report/2011/10/24/10473/china-pours-money-into-smart-grid-technology/ ; Pu Jun and Wang Xiaocong,Wind Power Firms Eye Vestas Deal, Report Says,Caixin,April 16, 2012, available at http://english.caixin.com/2012-04-16/100380433.html ; Kevin Bullis, The Chinese Solar

Machine,MIT Technology Review , December 19, 2011,available at http://www.technologyreview.com/ eatured-story/426393/the-chinese-solar-machine/.

43 Melanie Hart and Kate Gordon, 5 Myths and Realities aboutU.S.-China Solar Trade Competition, Center or AmericanProgress, May 16, 2012, available at http://www.american-progress.org/issues/green/news/2012/05/16/11592/5-myths-and-realities-about-u-s-china-solar-trade-competi-tion/ ; Melanie Hart and Kate Gordon, The Complexitieso the U.S. Decision on Chinese Solar Panel Imports,Center or American Progress, March 15, 2012, avail-able at http://www.americanprogress.org/issues/green/news/2012/03/15/11330/the-complexities-o -the-u-s-decision-on-chinese-solar-panel-imports/ ; Melanie Hart,Shining a Light on U.S.-China Clean Energy Cooperation,Center or American Progress, February 9, 2012, availableat http://www.americanprogress.org/issues/china/re-port/2012/02/09/11030/shining-a-light-on-u-s-china-clean-energy-cooperation/ .

44 Michael Riley and Ashlee Vance, Inside the Chinese Boomin Corporate Espionage, Bloomberg Businessweek , March15, 2012, available at http://www.businessweek.com/articles/2012-03-14/inside-the-chinese-boom-incorporate-espionage .

45 Ibid.

46 U.S.-China Clean Energy Research Center, available athttp://www.us-china-cerc.org/index.html.

47 Ambassador Charlene Barshe sky and others, United States:United States To Resume Bilateral Investment Treaty Ne-gotiations On The Basis O A Revised Model Treaty, WilmerCutler Pickering Hale and Dorr LLP, May 17, 2012, availableat http://www.mondaq.com/unitedstates/x/177910/International+Trade/United+States+to+Resume+Bilateral+Investment+Treaty+Negotiations+on+the+Basis+o +a+Revised+Model+Treaty.
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