Rethinking Sino-US relations

Many Chinese commentators worry about the risks of the United States introducing carbon tariffs. Chu Zhaogen urges them to take a long-term view.

United States energy secretary Steven Chu and commerce secretary Gary Locke visited China last month to explore where there might be mutually beneficial US-China partnerships in the clean-energy sector.

This came a few weeks after the US House of Representatives passed a bill, the American Clean Energy and Security Act, also known as the Waxman-Markey bill. This bill, if it were made law, would establish a form of carbon cap-and-trade system in the United States; it could also permit the US to impose import tariffs on countries that do not adopt emissions reductions, including China. Therefore, Chinese scholars expressed opposition to the bill; some predicted that developing countries would unite against it.

However, such views demonstrate a lack of in-depth consideration or research. China does not have to completely oppose carbon tariffs; there is a proactive option that China can take.

The movement towards a low-carbon world is inevitable. This process has gradually risen in importance – from the 1992 Earth Summit in Rio De Janeiro, Brazil, to the adoption of the Kyoto Protocol in 1997 and its entry into force in 2005. In December 2009, at a United Nations conference in Copenhagen, Denmark, the world’s countries will attempt to reach a new agreement on emission reductions for 2012. There is now a consensus about the need to reduce carbon dioxide emissions for the sake of humanity’s common interests.

In terms of concrete action, the European Union has made a low-carbon economy a goal of its future development, with targets to reduce greenhouse-gas emissions by 20% by 2020 from 1990 levels; to reduce primary energy consumption by 20% by 2020; and to increase the proportion of energy consumption from renewable sources to 20% by 2020. In the United States, the Energy Independence and Security Act will accelerate the development of biofuels. Meanwhile, Japan has undertaken to cut emissions by between 60% and 80% by 2050 and establish a carbon market. Developing nations, such as China and India, have also produced programmes and legislation to develop renewable energy sources.

The global economy, having been through the Industrial Revolution and Information Technology Revolution, is now entering the low-carbon revolution.

China needs to change. The country suffers a greater tension between its population, resources and environment than developed nations; and these are long-term problems. For many years, the Chinese government has been calling for an improved and upgraded economic structure, with greater conservation of resources and environmental protection identified as mid- to long-term strategic goals. In 2006, China accounted for 5.5% of global GDP, but accounted for 15% of total coal consumption, 30% of steel consumption and 54% of concrete consumption. China’s economic growth has been 25% more expensive than the world average.

To produce US$1 million in GDP, China expends three times as much energy as the United States, five times as much as Germany and six times as much as Japan. A tonne of coal in China does 28.6% as much work as in the United States, 16.8% as in the European Union or 10.3% as in Japan. High investment and high consumption have led to pollution and inefficiency. One-third of China’s land area is affected by acid rain.

China cannot follow in the footsteps of the developed nations: to pollute first, then clean up later. The country’s only route to sustainable development is the conservation of resources and environmental protection. Therefore, the external pressure of carbon tariffs on China and other developing nations is not necessarily a bad thing. If that pressure leads to action, and China introduces domestic carbon taxes, this could help to make necessary changes.

A low-carbon economy will benefit China overall. However, both China and the United States have the same problem: the economic impact of such policies on polluting companies. This is why the last US president, George W Bush, would not ratify the Kyoto Protocol. The administration under Barack Obama supports climate legislation, but they still face obstacles at every stage.

Many economists and international institutions suggest that a carbon tax would be the best way to harness market forces to address climate change. Denmark, Finland, the Netherlands, Norway, Italy, Sweden and some parts of the United States and Canada already collect carbon taxes. In order to maintain its international image, China should adopt emissions reductions measures; it could be more effective than a fortune spent on public relations. Even Bush would agree that refusing to ratify the Kyoto Protocol damaged his international reputation hugely. Importantly, if major resource consumers, such as the United States and China, adopt low-carbon economies, the prices of oil, gas and raw material will fall significantly, which will be beneficial for China’s development. Moreover, there are profits to be made from carbon trading and low-carbon industries.

As the world moves towards a low-carbon economy, China should cut its emissions to protect its own long-term interests. This is a matter of saving the planet and the future of humanity. Of course, one can advocate a low-carbon future without supporting US carbon tariffs. Here China can take the moral high ground, and show it is courageously taking on the responsibilities of a major nation by putting forward demands that protect its own interests and supporting the adoption of global emission reductions, thus realising a win-win partnership for China and the United States.

Chu Zhaogen is a researcher at Zhejiang Academy of Social Sciences; he is a widely published writer and columnist.

This article first appeared in the Oriental Morning Post. It is translated and reproduced here with permission.

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