Rhein on Energy and Climate

Since the failure of the Copenhagen Climate Conference China is being widely seen as the spoiler of international efforts to cope with climate change. Indeed, in Copenhagen it has not been very helpful. It has snubbed the USA and the EU by its refusal to subscribe to a global 50 percent reduction of green house gases by 2050, which is necessary for keeping the temperature rise within acceptable limits.

But it is right in its insistence on developed countries, in particular the USA, going ahead with reductions, considering their responsibility for the accumulation of C02 in the atmosphere during the 20th century and their unacceptably high per capita emissions until this very day.

Western negotiators should therefore take a more humble attitude and try to better understand the Chinese position, which is shared by most developing countries. Without a fundamental rapprochement on basics there will never be an effective international climate agreement, with reduction commitments along the lines of the Kyoto Protocol.

This being said, China is taking action against climate change. In 2009 it has invested $ 35 billion in energy efficiency and alternative energy (USA $ 19 billion). But measured by the sheer size of its emissions these actions are so far no more than a drop in the Ocean, hardly visible and often lacking effectiveness.

First, China has defined a national target for cutting its excessive energy intensity (C02 emissions per unit of GDP). It aims at reducing it by 40-45 percent until 2020 over 2005. In view of its extremely fast GDP growth this target is, however, unlikely to lead to any reduction of emissions. It will only slow the emission increase.

Second, China has fixed energy efficiency standards for buildings, appliances and automobiles. But their implementation leaves much to be desired. Developers continue to build apartments with absolutely inadequate thermal insulation, which prevents China from exploiting one of the most cost-effective opportunities for reducing its C02 emissions.

Third, China wants to cover 15 percent of its energy demand from alternative sources by 2020 and become one of the world leaders in non-fossil energy technologies.

It is determined to push nuclear energy at home and abroad, where it will increasingly compete with established Western companies.

It masters even the most complex hydro-power projects like the Four Gorges Dam on the Yangtze and has built more hydro- power stations in the last 20 years than any other country.

It has rapidly developed wind energy and become the global “number three” with 26 GW installed capacity end of 2009, after EU with 75 GW and USA with 35 GW. But it has failed to fully integrate these into the national grid because of the wide distance between the favourable wind areas in the north-east and the electricity consumption areas along the coast.

It has been very successful in its drive for solar PV, where Chinese companies are among the world-market leaders in technology and production costs. It is planning a big PV power plant to be completed by 2018. But its potential for PV applications is limited due to lack of intensive sunshine in many regions.

Its potential for solar thermal power is also not abundant compared to the possibilities of Australia, the southern USA, southern Africa or North Africa. By 2050 it might cover 4 percent of its electric production (EU 15 percent, if it taps the Sahara).

It has realised that traffic needs to be decarbonised to cope with the growing oil scarcity.

To this end, the government has taken two strategic decisions: build a 20.000 km high-speed rail network and phase out internal combustion engines by developing effective e-motors. Thanks to this determination it has become one of the world leaders in battery technology.

Last not least, it is trying very hard to develop an optimal technology for carbon capture and storage (CCS). A breakthrough in this research is of vital importance for China’s capacity to wean off fossil energy, as China’s energy supply depends for more than two thirds on coal-fired power. This dependence will not change much in the coming decades as the potential for solar and wind power is limited and that for hydro power reaching full exploitation in the next few decades.

The West has to appreciate these handicaps, which are exacerbated by the short-term challenges of improving living conditions for some 1 000 million people still living in relative poverty.

It is highly unlikely that China – or India for that matter – will subscribe to any emission reduction targets within the coming 10 years or so. It wants the West to shoulder the main responsibility and accelerate the pace of its decarbonisation. That is only fair.

USA and EU should respond to this political challenge in a constructive way:

The EU should proceed with a unilateral 30 percent reduction of its emissions 1990-2020. This should be achievable without major pains considering the low economic growth expected until 2020.

The USA must finally come to terms with climate policy and decide on really effective measures. Hopefully the most recent oil spill catastrophe will have convinced the political class of the urgent need to change the lifestyle.

To overcome – exaggerated- resistance against tougher measures by industry, USA and EU should not hesitate to introduce border mechanisms that would off-set the domestic carbon charges for a few highly energy-intensive industries. The latest draft for an American Energy Act provides for this.

USA, China and EU should establish an intensive dialogue on energy efficiency, wind, solar and CCS, allowing everybody to learn from each other and accelerating the necessary adjustments. The focus should be on energy efficiency and CCS. These will be China’s most suitable tools for reducing emissions. A constructive trilateral dialogue should lead to the adoption of a global reduction target of 50 percent for 2050.

All other OECD countries, the GCC and Russia will also need to take more stringent anti-climate measures. But they are unlikely to act decisively until USA and EU have set examples

Brussels 11.05.10 Eberhard Rhein

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