MICHAEL DAVIDSONNATURAL RESOURCES DEFENSE COUNCIL

APRIL 2011

Greening China: Opportunities for international

cooperation and improved transparency

About the Natural Resources Defense Council

NRDC’s purpose is to safeguard the Earth: its people, its plants and animals and the natural systems on which all life depends. We use law, science and the support of 1.3 million members

and online activists to protect the planet's wildlife and wild places and to ensure a safe and healthy environment for all living things.

We have 5 offices in the U.S. and an office in Beijing, China

Accelerating the Greening of China

15 years on the ground in ChinaWorks with Chinese actors in government, academia,

non-governmental organizations, and corporationsNRDC was the first international environmental

organization to establish clean energy and green building programs in China.

Focus areas: Industrial energy efficiency Green buildings Sustainable Cities Renewable Energy Policy Environmental laws, transparency, governance Greening multinational corporations supply chain

Overview

China’s Environmental Challenges

China Takes on Climate

Transparency in Implementation

U.S.-China Cooperation

China’s Energy and Environment Challenge

China’s Challenges

The world’s largest… Energy consumer: 3.25 billion metric tons of

coal-eq in 2010 GHG emitter: over 7 billion metric tons of CO2 /

year Coal user: mined 3.2 billion metric tons in 2009;

650 GW of power capacity in 2010COAL continues to dominate

energy mix, ~ 70% External costs of coal ~ 7% of

GDP1

1. True Cost of Coal, Greenpeace, www.greenpeace.org/eastasia/news/coal-crisis

China’s Challenges (2)

Industrial growth

Source: LBNL, 2010, see: china.lbl.gov/publications/the-ace-study

China’s Challenges (3)

Urbanization and

motorizationCredit: EPA

Bad Air: a times seriesTianjin conference center

China Takes on Climate: China’s OpportunityClean Energy RaceThe Next Five Years

“Is there any hope, if most nations delude themselves with greenwash,

of stopping rule by fossil fuel interests? Yes. China is the best hope.” – Jim Hansen, South China Morning

Post, Nov 2, 2010

China’s Opportunity

Source: China’s Green Revolution, McKinsey and Co., 2009

2.4 Gt CO2

2.4 Gt CO2

The Clean Energy Race

New investments (2004-2010)

CHINA

U.S.

Source: Bloomberg New Energy Finance

The Clean Energy Race (2)

CHINA

U.S.

Source: Bloomberg New Energy Finance

2001 2002 2003 2004 2005 2006 2007 2008 2009 20100

2000

4000

6000

8000

10000

12000

14000

16000

18000

0%

20%

40%

60%

80%

100%

120%

140%

Newly added wind capacity, 2001-2010

U.S. New Capacity China New Capacity

U.S. Growth Rate China Growth Rate

Meg

awatt

s

Source: Global Wind Energy Council, Bloomberg New Energy Finance

China’s Leading Indicators in Green Development

Wind: Leads in total wind energy capacity; 3 of the top 10 wind companies

Solar: 6 of the top 10 solar companiesSmart growth: 13 pilot low-carbon cities and

provincesSmart grid: Largest smart grid investor in the

worldTransportation: Raising efficiency standards,

increase fleet of hybrid/electric cars

Energy Intensity (1978-2015)

Source: IEA CO2 Highlights, 2009; The Climate Group

The Last Thirty Years

And The Next Five Years…

Climate Change and New Energy are strategic priorities$760 billion in new energy investment by 2020

12th Five Year Plan (2011-2015) Reduce energy intensity, carbon intensity Increase share of renewables in energy mix Develop new strategic industries in clean energy

and environmental protection Develop market mechanisms: environmental/carbon

tax and cap-and-trade pilots National Climate Change Law and National Energy

Law

Climate Negotiations

In the Copenhagen Accord, China agreed to major actions on climate: Reduce carbon intensity by 40-45% from 2005 levels by 2020 Increase non-fossil energy usage to around 15% of primary

energy consumption by 2020 Increase forest coverage by 40 million hectares from 2005

levels by 2020

In Cancun, China helped advance proposals on: technology transfer climate financing transparency of developed and developing country

commitments and actions reducing deforestation

Climate Negotiations (2)

Specifically, the Cancun Agreements… Require developed countries to enhance monitoring, reporting and

verification (MRV) of emissions and financial assistance Require developing countries to submit national inventories of actions

and emissions every two years Establish international consultation and analysis (ICA) of these

actions, creating a formal dialogue to discuss these reports

Which China agreed to, because… China is meeting ambitious domestic commitments and

deserves credit Increased information exchange strengthens the

international system and builds confidence China’s experiences with low-carbon development provide

useful models for other developing countries

Transparency in Implementation:

Benefits to EnforcementTarget Responsibility System

International

China’s Environmental Enforcement

Environmental legal system: criticized for weak enforcement and vague laws

Target responsibility system: detailed, law-like guidelines; potential incentives to falsify data

Benefits of transparency in the U.S.: Empower media and public as environmental

watchdogs Toxics release inventories engage consumers, banks,

corporations Freedom of Information Act (FOIA) requests have

uncovered countless violations

How well are existing laws enforced?

Pollution Information Transparency Index (PITI) 2008: open environmental information measures take effect Rated 113 cities on disclosure performance Improvements in 2010: 82 0f 113 (73% of Chinese

cities) All-star city of best practices (95.3 pts) shows

transparency is possible: detailed emissions data lists of enterprise violations prompt response to public information requests

What’s in a target?

11th Five-Year Plan, 20% Energy Intensity Target:Policies established to improve industrial, power

sector, building, transportation efficiencyWen Jiabao, May 2010: Will use “iron hand” to meet

targetOverzealous local leaders: blackouts, curtailing

productionExamination Index Examination Content ScoresEnergy-saving Targets (40 scores) Reduction rate of energy consumption per 10,000 yuan GDP 40

Energy-saving Measures (60 scores)

Energy-saving organizational arrangements and leadership 2Allocation and implementation of energy-saving targets 3Adjustment and optimization of industrial structure 20Energy-saving investment and implementation of key projects 10Development and promotion of energy-saving technology 9Energy-saving management of key enterprises and sectors 8Implementation and improvement of relevant laws and rules 3Implementation of basic energy-saving work 5

Total Score 100

Source: “Implementation Plan of Evaluation System of Energy Consumption per Unit GDP,” November 17, 2007

Why Does This Matter Int’ly?

Source: Clare Breidenich

Preparation of National GHG Inventory

Implementation of Nationally Appropriate

Mitigation Actions

National

Communication

Domestic Activities

UNFCCC Processes

Implementation of Domestic MRV

Procedures

International Consultation and Analysis

U.S.-China Cooperation

Jim Hansen again…

“China cannot stabilize Earth’s climate alone. If, as I hope, they conclude that a rising carbon fee is in their interest, the

question will become: can they find a sufficient number…who will abandon

greenwash and participate in effective policy?”

U.S.-China Clean Energy Cooperation

Pres. Obama visits China, Nov 2009 Agreement to establish Clean Energy Research Centers

(CERC) Action plans on energy efficiency, renewable energy,

electric vehicles… Energy Cooperation Program (AmCham-led)

Pres. Hu visits U.S., Jan 2011 $ billions in U.S.-China clean energy business

ventures EV, smart growth demonstration projects CERC work plans finalized

Building Efficiency CERC

Complement two other CERCs – EV, advanced coal$50+ mil in joint U.S.-China public-private fundsIndustry cost share partners

Technology R&D: materials, lighting, insulation…Monitoring/SimulationAnalysis: markets, benchmarking, energy use/behavior

Complementary Challenges & Opportunities

ChinaTechnical hurdles (25% of wind not connected, lower

capacity factors)China’s “IP of scale”Key link in global supply chain

U.S.Deployment gap: in 2010, U.S. trails China by even

greater margin (e.g., in new wind, 5GW to 17GW)World leader in venture capital (20 times UK

spending)Wealth of experience with legal frameworks

Looking Ahead

China and U.S. racing ahead together by…

Strengthening China-U.S. energy and environment partnerships, including CERCs; implement MOUs

Taking concrete steps at home to reduce emissions

Actively participating in international response to global warming

Thank You! 谢谢！

Contact: Michael Davidson (mdavidson<at>nrdc.org) switchboard.nrdc.org/blogs/mdavidson/

Read all our China blogs: switchboard.nrdc.org/blogs/issues/

greening_china/

Extra Slides

12th Five Year Plan (2011-2015)

Strategic Emerging Industries: energy-saving and environmental protection technology, new energy, biotech, high-end equipment manufacturing, new materials and new-energy cars

Targets: