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

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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