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:
Few countries are unaffected by China’s overseas investments. The country’s outward foreign direct investments (OFDI) have grownfrom $29 billion in 2002 to more than $424 billion in 2011. While these investments can bring economic opportunities to recipient countries, they also have the potential to create negative economic, social, and environmental impacts and spur tension with local communities.
To address these risks, China’s Ministry of Commerce (MOFCOM) and Ministry of Environment (MEP)—with support from several think tanks—recently issued Guidelines on Environmental Protection and Cooperation. These Guidelines are the first-ever to establish criteria for Chinese companies’ behaviors when doing business overseas—including their environmental impact. But what exactly do the Guidelines cover, and how effective will they be? Here, we’ll answer these questions and more.
By 2030, 221 Chinese cities will have at least one million residents. These fast-growing urban areas present an unprecedented opportunity to create global models for the sustainable, low carbon cities of tomorrow.
China’s 12th Five-Year Plan strongly promotes sustainable cities, and the coastal city of Qingdao is leading the way in translating this principle into action on the ground. WRI helped generate Qingdao’s blueprint for sustainable development, and brought its pioneering efforts to national attention.
Sustainable City Blueprint
In developing their growing city, Qingdao’s leaders sought to pursue economic growth while avoiding urban sprawl and the environmental problems such as air and water pollution that have plagued many Chinese cities.
The city government has developed a low-carbon strategy that includes more efficient energy and waste water use, transport systems that reduce congestion, and sustainable urban design. The blueprint lays the foundation for Qingdao to meet its target of reducing carbon intensity by 45% by 2020. To guide development, the city government has set specific emission reduction targets for each energy-intensive sector.
Qingdao has signed an agreement with French company Suez to upgrade its inefficient waste water system and with China Everbright Bank to improve Qingdao Harbor’s energy efficiency. The U.S. company, AECOM, is set to invest in developing a sustainable design blueprint for the city.
In December 2012, Qingdao was selected as a National Low-carbon Pilot City, which is initiated by the National Development and Reform Commission (NDRC); and National Low-carbon Transport Pilot City, initiated by the Ministry of Transport (MOT).
Making Change Happen: WRI’s Role
WRI’s work in China focuses strongly on low carbon cities. We work with China’s NDRC, MOT, Ministry of Housing and Urban-Rural Development, Ministry of Industry and Information Technology, and Ministry of Environmental Protection to design models that focus on efficient energy and land use, sustainable transport, and reliable, clean water supply.
In Qingdao, along with partners including the Asian Development Bank (ADB), we played a critical role in helping the city prioritize low-carbon development. Specifically, we generated an inventory of the city’s energy use, collected traffic data, developed sector scenarios, drew a technology roadmap, and recommended policies that the authorities adopted.
We also introduced Qingdao’s Development and Reform Commission (DRC) to the major companies now helping develop the city. In addition, WRI’s close ties with NDRC and other ministries helped bring Qingdao’s pioneering efforts to central government attention.
WRI will use the city’s lessons learned and best practices in seeking to scale up sustainable urbanization both in Chinese cities and other emerging countries.
More than half the world’s population lives in cities, and they contribute more than 70 percent of global carbon dioxide emissions. Therefore, city leaders are key players in global efforts to reduce greenhouse gases (GHGs) and curb climate change.
While many urban centers around the world are already taking action, until recently there was no broadly accepted, standardized guidance to help officials measure and report emissions from cities. This situation changed in 2012 with the release of the pilot Global Protocol for Community-Scale GHG Emissions, a comprehensive, easy-to-use pilot GHG accounting and reporting protocol jointly developed by WRI, C40 Cities Climate Leadership Group, and ICLEI - Local Governments for Sustainability.
The protocol is based on consensus built among key stakeholders, including WRI, C40, ICLEI, the World Bank, United Nations Center for Human Settlements (UN-HABITAT), and United Nations Environment Program (UNEP). More than 30 other expert international organizations also provided inputs.
Enabling Cities to Take Climate Action
Launched during the international climate talks in Bonn, Germany in May 2012, the protocol marks a major step forward for city-level GHG accounting. It guides municipal authorities through gathering comprehensive data on emission sources, tracking performance, responding to local GHG regulations, and building effective, low-carbon strategies. Cities can customize their results for local reporting needs while being compatible with a common international standard.
Besides the above expert international organizations, the protocol drew on practical experience from city officials from Buenos Aires; Eugene and Portland, Oregon; Mexico City; Paris; Taipei; Toronto; and others. The final protocol will be released in 2013 and will incorporate lessons learned by 15-20 pilot cities around the world.
Making Change Happen: WRI’s Role
WRI’s GHG Protocol standards are the prime tool used for measuring and reporting corporate GHG emissions worldwide. In developing the cities protocol, our partners agreed to adopt GHG Protocol’s “scope” approach to emissions counting, which treats direct and indirect emissions separately and avoids double-counting. Drawing on lessons we learned in providing technical assistance to cities in China and Brazil, together with C40 and ICLEI, WRI—together with C40 and ICLEI—successfully developed a comprehensive framework, which includes all urban emission sources and six types of GHGs.
During 2013, we will work with C40 and ICLEI to pilot test the draft protocol on the ground. Our GHG Protocol team is already working with cities in India, Brazil, and China.
A growing number of countries and companies now measure and manage their emissions through greenhouse gas (GHG) inventories. Cities, however, lack a common framework for tracking their own emissions—until now.
The world’s two largest greenhouse gas emitters—the United States and China—have been forging a growing bond in combating climate change. Just last week, President Obama and President Xi made a landmark agreement to work towards reducing hydrofluorocarbons (HFCs), a potent greenhouse gas. And both the United States and China are leading global investment and development of clean energy. The United States invested $30.4 billion and added 16.9 GW of wind and solar capacity in 2012. China invested $58.4 billion and added 19.2 GW in capacity.
China’s Growing Overseas Investments in Renewable Energy
As new WRI analysis shows, Chinese companies have made at least 124 investments in solar and wind industries in 33 countries over the past decade (2002 – 2011). The United States is the number one destination of these investments, hosting at least eight wind projects and 24 solar projects. The majority of the investments went into solar PV power plant and wind farm development, while a few investments went into manufacturing or sales support.
When President Obama and China’s President Xi Jinping meet in California this week, they will be seeking to build trust and chart a course for improved relations. While tensions abound over various issues, clean energy and climate is one area where cooperation can work.
Last month, the United States and China released a statement declaring that joint action on climate change can “set the kind of powerful example that can inspire the world.” These two countries have the opportunity to tackle this global challenge, helping keep the world within 2 degrees Celsius of temperature rise, and embrace clean energy on the path to a low-carbon future.
Given the stakes, business leaders should be paying attention.
Clean energy is one of the most important growth sectors in the global economy. It has been projected that $2.3 trillion will be invested in clean energy by 2020, reaching $269 billion last year. China was the number world’s top clean energy investor in 2012, with a record $68 billion. China’s investments are not only within its borders. China’s total overseas investment in 2011 extended to over 130 countries and topped $60 billion.
It’s well-known that China ranks first in the world in attracting clean energy investment, receiving US$ 65.1 billion in 2012. But new analysis from WRI shows another side to this story: China is increasingly becoming a global force in international clean energy investment, too. In fact, the country has provided nearly $40 billion dollars to other countries’ solar and wind industries over the past decade.
China’s Overseas Wind and Solar Investments, By the Numbers
According to our research, Chinese companies have made at least 124 investments in solar and wind industries in 33 countries over the past decade (2002 – 2011), more than half of which were made in 2010 and 2011 (see Figure 1). Despite some gaps in the data that prevent us from generalizing about all of China’s wind and solar investments, we learned that:
Of the 54 investments for which financial data were available, the cumulative amount invested came to nearly US$40 billion.
China invested roughly US$10 billion in 16 wind projects and US$27.5 billion in 38 solar investments.
Of 53 investments with capacity data available, the cumulative installed capacity added was nearly 6,000 MW.
The majority of investments were in electricity generation. Several investments were made in manufacturing facilities and to establish sales and marketing offices.
Most of the investments were in developed countries. A huge amount went to the United States, as well as Germany, Italy, and Australia. A handful of developing countries—including South Africa, Pakistan, and Ethiopia—also attracted multiple investments.
As evidence of climate change mounts, President Obama has made it clear that tackling this issue will be a priority in his second term. Yet, as weeks go by, the administration has been slow to clarify its strategy. With each passing day, it becomes harder and more expensive to rein in greenhouse gas emissions.
Meanwhile, other global powers are moving forward--and many of them carry valuable lessons which American policymakers can look to. The most successful countries are showing national leadership, strong and consistent policies, and commitment to clean energy.
Where, then, are signs of progress on clean energy?
Germany’s Energiewende: Leading the Way
High on the list is Germany, whose ambitious energy transformation strategy--or “Energiewende”--aims to reduce greenhouse gases by 80 to 95 percent by 2050, compared to 1990 levels. This will be achieved by enhancing energy efficiency, reducing primary energy consumption by 50 percent, and ramping up renewable energy to at least 80 percent of electricity consumption in the same time-frame.