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4 Promising Themes Emerge in U.S.-China Agreements at Strategic and Economic Dialogue

This post originally appeared on WRI's ChinaFAQs blog.

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:

A Look at China's New Environmental Guidelines on Overseas Investments

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.

33 Cities Test New Framework for Community-Scale Greenhouse Gas Inventories

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.

Thirty-three cities and communities from around the world started pilot testing the Global Protocol for Community-Scale Greenhouse Gas Emissions Pilot Version 1.0 (GPC Pilot Version 1.0) last month. The GPC represents the first international framework for greenhouse gas accounting for cities. It was launched in May 2012 as a joint initiative among WRI, C40, and ICLEI in collaboration with the World Bank, UN-HABITAT, and UNEP.

Why Is China Investing So Much in U.S. Solar and Wind?

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.

U.S.-China cooperation on clean energy was the topic of discussion at an event last week at the Woodrow Wilson International Center’s China Environment Forum. Experts from the World Resources Institute and the American Council on Renewable Energy (ACORE) looked at this cooperation from a seldom-discussed viewpoint – China’s renewable energy investments in the United States.

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.

4 Topics on Clean Energy and Climate Change Obama and Xi Should Consider

This post originally appeared on Forbes.com.

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.

China Invests Billions in International Renewable Energy Projects

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.

This investment is consistent with a broader trend of major emerging economies like China, India, and Brazil becoming important sources of global overseas invest¬ments. WRI’s new working paper, China’s Overseas Investments in the Wind and Solar Industries: Trends and Drivers, helps to better understand China’s renewable energy investments overseas, as well as the policy and market forces that drive them.

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.

Global Signs of Leadership on Clean Energy

This post originally appeared on the National Journal's Energy Experts blog.

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.

How Are China’s Overseas Investments Affecting the Environment?

Chinese overseas investments are rapidly increasing. As of 2011, China’s outward foreign direct investments (OFDI) spread across 132 countries and regions and topped USD 60 billion annually, ranking ninth globally according to U.N. Conference on Trade and Development statistics. A significant amount of this increasing OFDI goes to the energy and resources sectors—much of it in Asia, Africa, and Latin America.

But there are two sides to China’s OFDI coin. On the one side, these investments can benefit China and recipient countries, generating revenue and improving quality of life. However, like any country’s overseas investments, without the right policies and safeguards in place, these investments can fund projects that harm the environment and local communities.

WRI‘s new issue brief surveys the progress and challenges China faces in regulating the environmental and social impacts of its overseas investments. I sat down with WRI senior associate and China expert, Hu Tao, to talk about China’s overseas investment landscape. Before joining WRI, Tao worked as a senior environmental economist with China’s Ministry of Environmental Protection (MEP). Here’s what he had to say:

Exploring Prospects for U.S. Coal Exports to China

This post originally appeared on ChinaFAQS.org.

The United States and China are the world’s two largest economies. They are also the two largest producers and consumers of coal, and the largest emitters of carbon dioxide. In recent years, however, their paths on coal have started to diverge.

Over the last few years, coal consumption has dropped dramatically in the United States, mainly due to low natural gas prices. In response to weak domestic demand, the U.S. coal industry has been rushing to find its way out to the international market. Last year, U.S. coal exports hit a historical high of 114 million metric tons.

However, it is worth noting that the shift away from coal in the U.S. may not be permanent. As my colleague, Kristin Meek, pointed out in an earlier blog post, coal use in the U.S. power sector was on the rise again towards the end of 2012, likely driven by the new uptick in natural gas prices.

On the other side of the globe, China’s appetite for coal continues to grow. In response, Chinese power companies are looking to tap the international coal market for sources that are more reliable and cost competitive. Among those markets is the United States. In 2012, China imported 290 million metric tons of coal. China was the third largest destination for U.S. coal exports, behind the Netherlands and the U.K.

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