WRI established its China office in 2007. We work with leaders in business, government, and civil society to address climate change, transport, and water risk issues. Learn more about our work in China. Visit our WRI China website.
International climate action took an encouraging step forward today. President Obama reached agreements with the G-20 and with China to phase down the use of hydrofluorocarbons (HFCs), potent greenhouse gases used in appliances like refrigerators and air conditioners.
China launched its first pilot emission trading program this past June. This development is potentially a major marker in the country’s efforts to reduce greenhouse gas (GHG) emissions.
The Shenzhen Emissions Trading Scheme (ETS) program will cover some 635 industrial companies from 26 industries. This is the first of seven proposed pilot GHG cap-and-trade schemes in China, which the country has been developing since 2011. Besides Shenzhen, four of the other pilots are expected to start trading this year.[^1]
In 2010, these 635 industrial companies emitted 31.7 million tons of carbon dioxide and contributed 59 percent of the Industrial Added Value (gross domestic product (GDP) due to industry) and 26 percent of Shenzhen’s GDP.
To maintain its economic growth and provide for its massive population, China must reconcile two powerful, converging trends: energy demand and resource scarcity. One prime example of this tension is the country’s coal use and water supply.
Being "thrifty" means spending one cent as if you have only half a cent. This is an old Chinese saying to warn people to handle affluence without forgetting about a potential crisis. Underlying this common sense is an ethic rooted in Chinese culture: wasting is bad.
President Xi Jinping has urged Chinese people to "build a thrifty society", because if we persist with our business-as-usual production and consumption pattern we would invite a resource and environmental crisis.
One "inconvenient truth" is that China uses about 20 percent of the total global energy to produce about 12 percent of the world GDP. The country's energy consumption per unit of GDP is 2.2 times that of the world average. A similar pattern is seen in the consumption of other resources such as steel, cement and other raw materials, as highlighted by State leaders and experts at the International Forum on Building Ecological Civilization hold in Guiyang, Guizhou province, last month. In doing so, the leaders indicated that huge amounts of energy could be saved in China by improving efficiency.
China makes and uses almost half of the cement in the world. Between now and
2030, some estimates are that China will erect half of all buildings expected to be
constructed in the world. Cement is an energy intensive and polluting business
currently responsible for 15% of China’s emissions of carbon dioxide.
Working with China’s National Development and Reform Commission (NDRC)
and the China Building Materials Academy, WRI is providing greenhouse
gas (GHG) accounting tools and training to help cement companies
measure GHG emissions and better understand their energy needs.
It’s a critical step in helping a booming industry meet government
mandated energy reduction goals.
The GHG Protocol (developed by WRI and the World Business
Council on Sustainable Development) is the basis for the
program. It has been adopted by China’s NDRC as a standard
in its efforts to lead national programs to address global
warming. Our aim is to work with the NDRC to expand use
of the GHG Protocol into other energy- and GHG-intensive
industries (oil and gas, petrochemical, chemical, power
generation, and iron and steel).
WRI’s [New Ventures](http://www.wri.org/project/new-ventures) project identifies, mentors, and provides small and
medium-sized enterprises (SMEs) with access to investment. New Ventures
operates in six of the world’s most vibrant emerging economies – Brazil, China,
Colombia, India, Indonesia, and Mexico – where the environment and
development decisions being made today will impact the entire world, and
where the private sector, particularly SMEs, is driving economic growth.
This year, the full New Ventures portfolio grew to 180 enterprises and facilitated
the transfer of $158 million from angel investors, banks, green funds, venture
capital funds, and development banks to SMEs that are protecting the
environment and delivering economic growth.
One shining example is [Beijing Shenwu](http://www.shenwu.com.cn/english/), a manufacturer of energy efficient
industrial furnaces that uses a new recycled combustion air technology to reduce
energy consumption by as much as 60% and decrease CO2 emissions
by at least 30%. Deployment of the system in the Chinese steel industry has
reduced that country’s annual industrial energy consumption by the equivalent
of 2.09 million tons of coal, thus cutting CO2 emissions by over 11.72 million
metric tons a year. It is a critical feat given that China and the U.S. are the
world’s top greenhouse gas emitters. ok
This has been a big week for U.S.-China collaboration on climate change. Yesterday the U.S.-China Climate Change Working Group (CCWG), which was established in April by the Joint Statement on Climate Change, presented their report on bilateral cooperation between the two countries. Not only does it lay out actions to reduce greenhouse gas emissions, a close reading sheds light on important themes for the future of U.S.-China collaboration on climate change.
The report centers on five separate “action initiatives.” to address key drivers of greenhouse gas emissions in both countries. The U.S. and China make up more than 40 percent of global CO2 emissions, so significant collaboration between the countries is absolutely essential to addressing the problem. The five areas that the report singles out include: vehicle emissions; smart grids; carbon capture, utilization and storage; greenhouse gas data collection and management; and building and industry energy efficiency.
Although the report is built around these five initiatives, four big themes can also be seen: