Rhein on Energy and Climate

China and USA account for one third of global green house gas emissions. The international community is therefore largely ineffective without these two giant emitter countries taking more effective action, and doing so without delay.

The prospects do not look encouraging, despite a few hopeful signals sent out recently.

The USA seems incapable of reducing emissions substantially in the present decade. Because of violent opposition in Congress the government is politically unable to cut emissions by more than 17 percent over 2005 (but only 4 percent over 1990!) until 2020. For a country with one of the highest per capita emission levels on earth (20 tons!) this is too little.

China is not willing to envisage any reduction of its emissions in the coming 10-20 years. All it is prepared to do is to lower its energy intensity by 40-45 percent until 2020. That sounds like an impressive cut, and China is, indeed, “selling” it as a big gesture. But in fact, this target may imply a doubling of Chinese emissions if economic growth continued at the ultra-rapid rates of the past.

Neither country is presently willing to subscribe to binding international limitations of green house gas emissions. China also refuses any international body monitoring the evolution of its green house gas emissions. With such a principled position of the two key emitter countries it is extremely difficult to imagine a meaningful international climate agreement emerging one day in the near future, and certainly not in Mexico at the end of this year.

But looking beyond the level of diplomatic statements there are some reasons for optimism.

Both countries have grasped the importance of taking action against climate change; and both do have appropriate policy programmes, including targets for the share of renewable energy for 2020 and the promotion of alternative energies. Both countries give a powerful push to nuclear and wind power generation.

The likelihood of the USA adopting a climate and energy act before the end of the year looks better than ever since the summer of 2009. A small group of bipartisan senators is, indeed, attempting to revive the legislative process. The outcome will hardly satisfy ambitious environmentalists in Europe or the USA. But it might lead to a cap and trade system for utilities and industries, to enter into force between 2013 and 2016, and provisions for higher federal gasoline taxation. Most important, the legislation will stipulate to cut emissions by 60-80 percent until 2050.That target would fall short of the 80-90 percent reduction developed countries are expected are to achieve; but it would at least fix the long term perspective.

Separately from any legislative efforts, stricter gasoline consumption standards for all new models of passenger cars and pickup trucks will enter into force in 2016, requiring the average fleet to consume no more than 6.7 litres per 100 km, 25 percent below present levels. With these EPA standards average gasoline consumption of US cars will approach European levels. But it will not be before 2030 at the earliest that the total US automobile fleet will effectively apply these standards.

Adding to these measures the massive investment in alternative energies, from nuclear to wind and solar, partially financed under the crisis package, and the substantial shift from coal to more climate-friendly gas one realises the profound policy changes taking place in the USA under the Obama Administration. But it will take long before these measures will impact on emission levels. Fortunately the 2008-09 recession has cut US emissions by at 5-8 percent, more than any government action, and give the Administration a precious respite.

China is following a similarly pragmatic policy to reduce its green house emissions.

Like no other country in the world it promotes renewable and nuclear energy in order to become less dependent on coal for its power supply. By 2015 renewables should account for 15 percent of total energy consumption. To that end, it has built a series of hydro-power dams along its major rivers, sometimes ignoring major environmental risks or negative consequences for down-stream riparian countries. It has become the world’s biggest generator of wind energy and developed the world’s biggest and most efficient manufacturing industry of photovoltaic cells.

It has also invested more than any other country in research on carbon capture and storage, hoping that CCS will allow it to pursue the exploitation of its huge coal reserves for the next decades.

It is also among the most advanced countries pushing the development of electric automobiles. And it has understood that in order to cope with the rapidly rising domestic traffic without excessive damage to the climate it should not rely, as the USA and Europe did 40-70 years ago, on inter-state highways and air transport but on energy-efficient high-speed trains. With a gigantic investment of almost $ 600 billion it aims at completing a 30 000 km high-speed train network, the biggest world-wide, by 2016.

It is therefore a myth, deliberately nurtured by Chinese authorities, to consider China is a “developing country” in the field of sophisticated emission-friendly energy technologies. Far from it, Chinese solar companies have become world leaders and formidable competitors for European and American companies.

More than any other country on earth, China has also demonstrated its capacity for extremely speedy implementation of technical change, whether building new cities, roads, railways or wind turbines or solar power plants. It is able to push through any programme it considers important for its future. If it wanted to it could reduce emission levels much faster by making full use of its vast untapped potential for energy efficiency, e.g. for buildings, and alternative energies. Contrary to its persistent assertions reducing green house gas emissions is not incompatible with rapid economic development and, more important the quality of life of its citizens. Less energy input for an identical energy output constitutes an increase of the GDP! And fewer coal-fired power plants improve citizens` health and help reduce costly public health expenditures.

We should draw two conclusions from this analysis.

Both China and the USA have a huge potential for increasing energy efficiency.

They could therefore perform much better in reducing their green house gas emissions by offering more effective incentives/ disincentives to save energy and invest in alternative energies. This does not require the conclusion of an international climate agreement, if the national measures constituted a valid and verifiable equivalent. But an international agreement will, of course, offer a higher overall effectiveness provided all major polluter countries sign up for it and take meaningful commitments.

The EU should urgently explore the practical possibilities of both China and the USA going beyond what they seem presently prepared to do, if necessary in the perspective of 2030. In these talks the EU should, of course, repeat its conditional offer of reducing its emissions by more than 20 percent until 2020.

Brussels 08. 04 2010 Eberhard Rhein

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