by Olivia Shepard
COMMON BUT DIFFERENTIATED
In 1992 at the United Nations Rio Earth Summit, government representatives from 255 countries met to address a long list of climate and energy problems. They penned the Rio Declaration on Environment and Development, which introduced the concept of Common but Differentiated Responsibility (CBDR) stating that,
“The developed countries acknowledge the responsibility that they bear in the international pursuit of sustainable development in view of the pressures their societies place on the global environment and of the technologies and financial resources they command.”
The concept of CBDR suggests that developed countries, which in 1992 were emitting close to 80% of global CO2, have a mitigation responsibility proportional to their emissions. The logical extension of this being that developing countries are less to blame and thus essentially given a free pass to “grow dirty” as we, the United States, once did. But do these developing countries really have a right to their own Industrial Revolutions? On the one hand, it is unfair to handicap the growth of developing countries with emissions-based constraints that developed countries grew without, but on the other, it is neither logical nor moral to allow developing countries to knowingly ignore climate change simply for the sake of equality.
CHINA’S RAPID RISE
With no other country is the concept of CBDR more controversial than with China. While technically still a developing nation, in the past year China has surpassed the United States not only as the country with the largest economy, but also as the number one global emitter of greenhouse gases. These two superlatives are not unrelated either; they are linked through energy intensity, a measure of energy use per GDP. China’s energy intensity is 50% greater than the United States, so even if the US and Chinese economies were growing at the same rate, China would see a 1.5 times greater increase in greenhouse gas emission than the US. But the Chinese GDP is growing approximately ten times faster than that of the United States. Due to this rapid growth in GDP, even if China is able to meet its five-year plan to reduce energy intensity by 16% before 2015, it will still experience a net increase in greenhouse gas emissions. That is the one-two punch of growth coupled with high energy intensity. The fact that China emits more greenhouse gas per unit of GDP than any other country in the world and also has the largest, fastest growing GDP in the world means that despite CBDR, China must play a leading role in mitigating climate change. Yet China is resisting pressure from the United Nations to commit to an emissions target, which they claim will cause harmful economic shocks. China has little incentive to control emissions.
SINO-AMERICAN RELATIONS
While China avoids taking on greenhouse gas reduction obligations, the United States is reluctant to commit to United Nations imposed regulations unless all major emitters (not just developed countries) sign on as well. US law makers want to avoid “free riders” who benefit from US emissions reduction without contributing to the reduction themselves. In addition, if the US were to set an emissions goal without Chinese reciprocation, this would provide China with an unfair advantage in global trade. The Chinese-American political landscape is a complicated diplomacy game with plenty more facets than just the energy issue. Key to China’s recent growth is its reliance on trade with the US. China’s overall trade surplus in 2011 was $155.1 billion, but against the United States alone for the same year it was $272.3 billion, or 175.6% of the total surplus.
SOLAR AND WIND SUBSIDIES
Ironically, one of the largest growing categories of imports from China to the US are solar panels. Thus to some extent, China’s dirty growth (70% of its fuel supply comes from coal, as compared to 23% from coal in the US), actually enables clean energy infrastructure in America. In order to curb their trade deficit, last May the United States imposed an anti-dumping tariff on 31% of Chinese-made solar cells. Dumping refers to selling goods to a foreign country at a price lower than would be charged for the same goods domestically. Before the tariff, China dominated half the American market. The US hopes that the tariff will strengthen the domestic solar market, giving America a chance to compete. While beneficial to the US, the new tariff is a point of concern for China (and for other foreign countries with large solar markets such as Canada) since it will shrink trade in the global solar market and increase prices. A decrease in sales will reduce jobs as well, since about half the jobs provided by the solar sector are in installation. There is also tension regarding Sino-American competition in other renewable energy markets as well. Because the Chinese government provides large subsidies for wind turbine production, the US has trouble competing.
GOOD FOR THE EARTH GOOD FOR THE ECONOMY
The tariffs implemented by the United States on Chinese renewable infrastructure such as solar cells and wind turbines are put in place to protect the American market. China can produce and sell these goods much cheaper than can the US so imposing the tariffs allows America to compete. But rising prices also means less consumption of solar panels and wind turbines and therefore less mitigation of greenhouse gases. So what can we do to overcome this tug-of-war between the environment and the economy? Therein lies the solution to entirety of the global energy crisis. The best solution will be both economically and environmentally advantageous. At this point, it is not likely that there will be one supremely effective mitigation strategy. Instead, relief will come from a confluence of methods. A free market approach will not be enough to jump-start many renewable energy industries. One potential idea could be a reinforcing structure whereby energy technology and infrastructure can be traded. If China continues to be a supplier of solar and wind energy systems to the US, the US can purchase these in capital investments in Chinese renewable projects to be implemented in China, thereby helping China as we help ourselves.
Sources
Bradsher, Keith and Diane Cardwell. U.S. Slaps High Tariffs on Chinese Solar Panels. The New York Times. http://www.nytimes.com/2012/05/18/business/energy-environment/us-slaps-tariffs-on-chinese-solar-panels.html?pagewanted=all&_moc.semityn.www. May 17, 2012.
Bradsher, Keith. Chinese Data Mask Depth of Slowdown, Executives Say. The New York Times. http://www.nytimes.com/2012/06/23/business/global/chinese-data-said-to-be-manipulated-understating-its-slowdown.html?pagewanted=all. June 22, 2012.
Bullis, Kevin. The Chinese Solar Machine. The Technology Review. http://www.technologyreview.com/featured-story/426393/the-chinese-solar-machine/. January 2012.
Chang, Gordon G. China is 175.6% Dependent on the U.S. http://www.forbes.com/sites/gordonchang/2012/01/22/china-is-175-6-dependent-on-the-u-s/. January 22, 2011.
Leggett, Jane A. China’s Greenhouse Gas Emissions and Mitigation Policies. Congressional Research Service. http://www.fas.org/sgp/crs/row/R41919.pdf. July 18, 2011.
United States Senate Committee on Environment and Public Works. The Real Story Behind China’s Energy Policy and What America Can Learn From It. http://epw.senate.gov/public/index.cfm?FuseAction=Files.View&FileStore_id=f29ee5f7-c9f5-46ca-9500-0f10b27f41ed. December 8, 2010
It is in cases like this that you see just how much power lies in the hands of corporations. Clearly the Chinese market is more preoccupied with maintaining business than with lowering its greenhouse emissions. I think the only way that we could get China to make their industries greener is if they felt pressure from the international corporations that they do business with. Unfortunately, this would probably have a negative effect on prices, which would certainly discourage corporations from making such a move.
I do agree that the solution to climate change needs to be economically favored, but I have a hard time grasping how your final statement would work.
One reason countries cannot agree to emission reductions and global climate change initiatives is that doing so requires collective action, with unequal benefits. For example, emission reductions by U.S and China may have more immediate benefits for Indonesia or places already facing the impacts of climate change than the two countries themselves. Similarly, although U.S purchasing solar panels/or investments in Chinese companies would reduce China’s emissions, it would be very difficult to convince Congress and the American people to adopt this solution. First, reducing China’s emissions has no immediate benefits to the American people. We might as well try to reduce our own instead. And second, our primary agenda for renewable energy is reducing our energy dependence from foreign nations, not necessarily reducing emissions for climate change. Investing in Chinese renewable capital and not our own will make us dependent on Chinese renewable energy, which we do not want.
-Dhrusti
While it would be pleasant (and appeal to common sense?) for China and the US to build up each others’ renewable portfolios, the fact is that the tense dance that is international diplomacy (especially between two powers) precludes any such niceties. First, the US’ tariff to block solar and wind technology dumping, while antagonistic to China, is needed to establish an advanced-manufacturing sector in the United States. There must be incentives to create investment and innovation here, and part of that is cushioning the growing market by limiting foreign competition until the US-made technologies can compete. The worry about “dumping” is also very real – China’s boom in renewable technology has overshot the global demand, and prices for such technology are plummeting (“China faces oversupply of solar panels, wind turbines,” Greenwire, 5 Oct 2012). Second, there have been attempts for renewable infrastructure investment in the opposite country – which has also led to strain in their relationship. President Obama stopped a Chinese firm from building several wind farm projects in Oregon last week (“Obama’s blocking of wind farm adds to US-China tension,” Greenwire, 1 Oct 2012), citing national security concerns. Third, despite China embracing renewable energy as an effective international business strategy, there have been few attempts to switch its own massive power consumption to carbon-neutral sources – 70% of their energy comes from coal power, as the post pointed out. This makes it clear to the US (and the rest of the world) that China is less serious with decreasing its carbon emissions then it would like to present. Unless there is a large-scale focusing event that affects both countries, enough to overcome their intense competition, there is little chance they will collaborate on anything substantial in the near future.
I think we can all agree that although a global solution to climate change (since it is a borderless problem) would be ideal, but we can also see from the past few international conferences on the environment that this is unlikely to happen anytime soon. It still boggles my mind that China is hanging on to that developing nation status. I think this covers part of why the first presidential debate was so alarming for me. Not to start a big political discussion, but I think the Greenwire article that was linked in the previous reply shows that the anti-dumping tariff was necessary to help protect our fragile economy. But if we’re going to compete with China in the sustainable energy market then there needs to be significant federal funding for solar technology. Too many states are in the red financially for the industry to grow on that level. Unfortunately, the Solyndra debacle has given the Romney campaign the political power it needs to downplay solar and keep coal in the forefront of U.S. energy policy. I think this is a mistake, and something that I’m not looking forward to in the event of a Romney victory.
In having common but “differentiated” responsibility there is bound to be a plethora of contention in regards to who and how much emission is allowable. While economic development and greenhouse gas emission seem to be synonymous, it was paradoxical to learn that one of the biggest imports in China is US solar panels. While developed countries have a mitigation responsibility, I find that we focus too largely on the quantifiable number we are trying to cut emissions by, rather than developing the technological infrastructure to facilitate them. Instead of “stopping” activity, there should be a sentiment around DOING and innovating better and cheaper technologies that the global community can adopt in a global pursuit of a healthier environment. While I find that the international community is correct in placing quantifiable figures in regards to emission mitigation, it must also advocate for different mediums to sustain energy use as not to stipulate economic growth.
Though overall this was an interesting blog, what stuck out to me the most was the idea that China’s dirty practices are fueling American green energy through the production of solar panels over seas. This is an interesting dilema as we would likely produce the solar panels in the United States, but can do so more cheaply overseas. But one of the biggest problems with solar panels today is they are too expensive so any increase in the input costs (having to pay American wages instead of Chinese) will discourage that many more homeowners and firms from purchasing solar panels. I think this is a great transition from Dani’s post because if we could find a way to produce solar panels in the US, say instal factories in dirty coal producing states like West Virginia, we would be bolstering the economies of coal producing states, could theoretically cut the use of coal if solar panels are used more widely, while reducing our dependence and investment in the Chinese economy. Now solar panels would be more expensive because of higher wages and harsher regulations on emissions from these plants, but at some point all the economic benefits i mentioned before have to equalize that difference.