China’s Climate Stance Laid Out by a Top Government Strategist

The key change is now China is faced with the so-called middle-income trap. In this stage, we continue to prioritize the development agenda — urbanization and industrialization. We haven't finished that. But on the other hand we have stringent constraints on natural resources and environmental quality. I would say there are two major aspects for China to shape its climate policy. One is its own development process. Another one is international responsibility. For the first aspect, its own development course, I would say there have been more and more endogenous reasons for China to take action. I would interpret that into restructuring the economy and changing the development pattern to upgrade its economy. China had to do something to change its economy. Otherwise there would be no hope for its further development. For the other aspect, its international responsibility, my understanding is China will take its responsibilities as a large developing country, but certainly subject to its capabilities, also on an equitable basis.

China will make the decision not only with the understanding of its own situation …but also the overall design of the global responsibility system, including looking at the share of burden or benefits in the process from other countries — for example the United States, Europe, Japan. In these aspects China continues to keep the idea of common but differentiated responsibilities, very frankly…. China insists in the position to make the framework [United Nations Framework Convention on Climate Change] the political and legal basis for the global regime and we do not see the necessity or need to rewrite or interpret the convention. There have been a lot of changes in the past years, but our observation is for the basis of the convention, its principles and supporting scientific facts, there have been no significant changes. Take cumulative [greenhouse gas] emissions as an example. Up to now, by 2010, our estimation is Annex 1 parties [industrialized countries as agreed to at the time] continue to account for around 70 percent of the cumulative emissions. This is one of the supporting scientific facts.

This is why the U.N.F.C.C.C. believes developed countries should take this historic responsibility. Further interpretation of historic responsibility is the course, the reason for this landscape of cumulative emissions…. Certainly there will be an evolution. China's share will become larger and larger in these indicators. But anyway, now the decision we will make will be based on the facts today. When we design the architecture for the next 10 or 20 years that means today when we discuss that, we encourage developed countries to consider their cumulative emissions as a total and then to take more responsibility. Furthermore, let me come back to the pathway as the source of cumulative emissions — energy mix, efficiency, technology finance, population, etc. etc., we believe this is the deeper driver to lead to the landscape of cumulative emissions. But we need to change that. If we want to make change we need to influence those drivers.

We see some changes of emissions trajectories in developed countries. If there are some reductions we welcome them. But we would request more because we believe this is something developed countries have to do to take their historic responsibility. But furthermore, we see this high-carbon pathway has been transferred to developing countries, and also multiplied or enhanced by the current international trade and investment system, especially in the context of globalization. So this is also dominated by developed countries. This is my understanding. But certainly complaints cannot solve the problem. We want to be more constructive so let's see how we can change the drivers, especially for developing countries, especially for emerging economies. So I believe we should work together to see how to change the drivers of development pathways for both developed and developing countries and the unite way we expect more emission reductions from developed countries while we have new innovative development pathways for emerging economies.

In my mind I have three typical pathways. One is the U.S. pathway, with per capita emissions at around 20 or 18 tons [per year] per capita and the European pathway around 10 or less, and a third one will be innovative for China, India and later developing countries. But actually the third one, the innovative one, has not existed in reality but we have to work together to create that. This leads to the need for technological assistance, financial assistance, and also the need for innovation for technology for the global regime. This is what we have to work together very hard for 2015 agreement. Coming back to China, China has a stronger and stronger endogenous motivation to make emission reductions. Because we are aware that, along the classic pathway, we have no hope for the future. We need to make some change in energy mix. It seems to me, based on lessons learned from developed countries and their history, their change has mainly derived from fuel switching — from coal to oil to natural gas, with less and less carbon intensity. This is a successful experience in history.

So my question is if China can follow that. I hope we can. Then the question is can we have the safe, reliable import of natural gas, because our own reserve is very limited for the moment and the U.S. becomes larger and larger, and maybe the largest oil and gas production country. Certainly I'm very interested in that. And then the Middle East, Russia and other sources. If we can have very stable, very reliable and safe supply of natural gas, why not? And also the price. One thing I was exploring recently was, the U.S. can export natural gas or it can export the capacity to drill for natural gas. How much can the U.S. help China through partnership with getting at your own gas reserves, or is that on a time scale that's just too long? I think this is one of the key prioritized areas for the U.S. and China to cooperate with each other… Certainly we have different geographical structure so we need some technology development, but I believe that experience and technology from U.

S., including the commercial model, should be helpful for us. We are keen to communicate with the U.S. and to explore the opportunity to cooperate. But certainly natural gas or shale gas should not be the only aspects that we work together on. Certainly we have some other things to do — for example efficiency. Energy efficiency for manufacturers, buildings, transport. They have huge potential based on our estimates and I.E.A estimates, this is the major arena for us to reduce emissions in the coming decades. … For the moment, coal-fired power plants dominate our share of generation, so ultra super critical or even I.G.C.C. The other one is C.C.S. The reality is coal will continue to be a major source [of energy] for our country although we hope we can reduce the share of coal. And renewables should also be another area where we work together. But certainly one outstanding issue is the enabling environment, including the treaty environment. Very frankly, presently, we two countries, also with the E.

U., we have some trade conflict on solar PV [photovoltaic panels], etc., etc. I think we should sit together to consider how to address this specific issue. In my mind, renewable energy is very important for climate protection. We should work together. On the one hand, we follow the [World Trade Organization] rules, market rules, but on the other hand we should consider how to address global commons issues, externality issues. I do not believe that only market rules can address that. Market rules are good enough for trade, for commercial benefits but for global commons we need some additional institutional arrangement. I've written about some new businesses in the States that are doing very well installing solar panels. But the reason they're prospering is because China's price is low.

So there's a benefit in the United States to installers of solar panels from the fact that China has a lot of capacity, which cuts against this concern that some in the U.S. have that China's cheap solar panels are bad. It's a little complicated. If you look at the overall global supply chain, sometimes we are mixed. Some U.S. companies and Chinese companies have shared stockholders… It would be nice if we can sit together to have some joint research, joint study on cost/benefit analysis, trade analysis, legal analysis to see how to develop some win/win solutions. … The ideal outcome will be the commercial society will continue to make money to support the economic recovery, but on the other hand we have a stronger and stronger renewable industry to contribute to emission reduction for the whole world. Policymakers and think tanks should work along this direction.

But I do not believe it will be workable just to complain and debate trade conflicts. I think we can do something for that. My individual judgment is we continue to need nuclear. Although there are a lot of concerns about safety, but if you look at different industries at different times of the past, if you look at the performance realities all over the world, from France to the U.S., I should say essentially they are safe, and they are becoming safer and safer. Given the different options, we should not give up nuclear for the moment. It should be one of the important options. It's a matter of trading off among different sources of energy, costs and benefits, safety and risk, etc. But after all I we should keep some share for nuclear, especially for China. The U.S. also has some very advanced technologies.

I believe we two countries should cooperate on nuclear to make it safer and safer..