Shale gas has enabled the US to shift stance on climate change

Climate and energy policies will be under scrutiny as Barack Obama and Xi Jinping meet at the APEC summit in Beijing, explains Shen Jiru of the Chinese Academy of Social Sciences

Shen Jiru is a researcher in the Chinese Academy of Social Sciences’ Institute of World Economics and Politics.

chinadialogue (CD): How much of a priority will climate change be at this week’s APEC summit?

Shen Jiru (SJ):
Climate change is not the major topic, but it is a matter of great concern that affects China’s economic reforms. Rapid economic expansion has produced significant overcapacity – for instance, steel output exceeded 800 million tonnes this year and cement output was even higher. Overcapacity produces pollution and north China’s frequent smogs. Such development is unsustainable.

China’s government intends to adjust the economic structure and mode of development. In the energy sector, this means less coal use, reducing overcapacity and cutting emissions. These are important aspects of China’s economic reforms and macroeconomic restructuring, of emissions reduction and of building a green China. The "five pillars” proposed for APEC by Chinese foreign minister Wang Yi, including economic reform, innovative growth and developing a new economy, will all result in environmental improvements and help combat climate change.

CD: What do you think president Xi and president Obama will talk about?

They are likely to discuss how the US can play a constructive role in Asia, and what actions China will welcome and oppose.

I think the most important part of the US pivot to Asia is relations with China. If they have good links with Japan but not China, the US will see only costs from that pivot policy, not benefits. But if the US has a good relationship with China, for example by exporting shale gas, the US will make money. The US should be able to see that.

CD: What attitude has the US taken towards climate change in recent years?

The US did not ratify the Kyoto Protocol, as cutting emissions imposes costs on business, which the US perceived as harmful to the economy. It said that if countries like China, India and Brazil weren’t making major emissions cuts, then it wouldn’t either. But recently the US has started using shale gas for power generation, which has cut carbon emissions significantly and given the US more authority during climate-change negotiations. It has more backing, more confidence, and is more active in responding to climate change. I expect that in next year’s climate-change talks the US will be more proactive and make some commitments.

And so the US and China now have more in common on climate change. Global demands for action on climate change are strengthening, and cooperation between the two biggest carbon emitters is necessary both for China and the US themselves, and the world. It’s a win-win situation.

Also, the shale gas revolution means the US has become self-sufficient in energy, and in the future will be able to export large quantities of this clean energy. Shale gas is set to become more important for China-US trade.

CD: How would you evaluate China’s efforts to cut emissions?

In recent years China has made huge efforts to develop clean-energy sources. First is hydropower. China has huge hydropower resources, and more installed hydropower-generating capacity than any other country, as well as more wind and solar-power capacity in place, and capacity is still growing. The installation costs of wind and solar power are falling rapidly and many Chinese companies are diverting money to these sectors.

So although China is the world’s biggest carbon emitter, it is also actively and conscientiously working to cut emissions. There’s also huge potential for cooperation with the US and EU, which have advanced clean-energy technology.

CD: How else could China and the US work together?

China’s high-speed rail technology is both world-leading and relatively cheap. The US has a large but ageing rail network, built in the last century, and with no high-speed lines. Last time Obama visited China he expressed hope that the US could import this technology from China. There are some domestic obstacles back in the US, but there could be cooperation on this.

China also hopes that the US will reduce controls on high-tech exports to China. There should be plenty for the two leaders to talk about in that regard.

CD: Will China-US cooperation on climate change be affected when Obama leaves power?

US policy towards China won’t change significantly, regardless of whether there’s a Democrat or Republican in power. The Republicans may take a different view on clean-energy funding for China, but both countries are currently benefiting from climate-change cooperation, and China hasn’t asked the US for any funding, nor has Obama given any actual funds for emissions cuts. It’s just been policy coordination.