Elizabeth Balkan's Climate Chronicles

The past week of events – from a U.S. Senate hearing, to remarks by China’s State Council, to high-level talks in Beijing – have scattered a layer of rich soil from which robust US-China cooperation on climate change might spring forth.

However, that soil is not uniform in content. The issue of quantifiable emissions reductions, central to continued bilateral discussions leading up to Copenhagen, is anything but homogeneously understood, as recent events demonstrate.

China’s largest electric transmission company has announced an ambitious plan to develop a national smart grid by 2020 that would help utilities and their customers transport and use energy more efficiently.

The sheer size of the project raises some intriguing questions. First, about whether China has the capital and technology for such an extensive upgrade. And second, whether the project could provide an opening for U.S.-China cooperation on technological improvements that could benefit both.

There's little question that the grid upgrade is becoming a necessity for State Grid Corporation of China, which is responsible for delivering power to 80 percent of the population.

China-based solar producer Suntech Power announced plans this week to build a manufacturing facility in the United States to serve the growing U.S. market for large-scale utility projects and to take advantage of government incentives.

“We believe in the outstanding long-term prospects of the solar energy market in the United States” Suntech Chairman and CEO Zhengrong Shi said.

The Suntech announcement reflects the value of federal and state incentives for renewable energy. It also counters a favorite argument of climate action opponents on Capitol Hill that shifting the United States to a clean energy future will send U.S. jobs overseas.

The Chinese government is considering imposing a pro rata carbon tax on coal and fossil fuels such as gasoline, jet fuel, and natural gas, Finance Ministry official Su Ming has told the country's state-run media.

For the past year, 20 experts from seven different government agencies have been investigating the development and implementation of a carbon tax, which has emerged as a preferred mechanism for curbing emissions in China's energy intensive sectors.

Though the research findings are due out this summer, no details on the size of a tax or date for when it would take effect have been released.

Earlier this year, the government organizations responsible for the study – the China Environmental Culture Promotion Association and the China Institute of Development Strategy Studies – proposed rolling out the carbon tax in select provinces first as a “barometer” for monitoring the carbon intensity of economic activity. 

Proponents of the plan favor an incentive structure that would reward producers for investing in cleaner technologies. Under the current market conditions, coal-fired power plant owners reap more profits by using cheaper, lower quality coal, which contributes greater emissions because it’s a less efficient fuel source. 

Critics, however, point out that unless the tax rate is set appropriately high, firms would choose to pollute and pay the fee, instead of take steps to curb emissions.

Those who stumbled across the recent Guardian article "China Considers Setting Targets for Carbon Emissions" probably did not fall off of their seats like I did. But at the very least you might have involuntarily raised an eyebrow, or two, and thought "huh, now that's a game changer."

For people who monitor developments in climate negotiations religiously, this article was practically heaven sent. But, upon closer examination, it proved little more than a manipulated quote and a very sexy, if misleading argument.

Beijing-based Jonathan Watts does not normally produce rubbish. He is an insightful, verging on conservative, journalist whose China stories tend to report developments which many on the ground or those familiar with China know of, but outsiders do not.

For those of us who, like Watts, depend on China-side developments in climate negotiations and other environmental news for our livelihood, the last three weeks have been a time of hunger. Ever since Chinese leader Hu and President Obama met in London during the G20, China has made nary a peep about the 500 pound white elephant that lives in Scandinavia, also known as Copenhagen.

What better way to wake people up Sunday morning than with the news that "China considers setting targets for emissions"?

However, the devil is in the details, as they say, so let's take a look at this article.

Shanghai, often recognized for its free-market tendencies and environmental leadership, is introducing China's first municipal trading mechanism as a means to curb pollution.

Last Friday, in advance of a major carbon trade industry event taking place in Beijing this week, word began surfacing in the Chinese media that Shanghai plans to pilot an emissions trading scheme that will involve more than 300 companies' trading "pollution discharge rights."

The news comes nine months after the launch of China’s first energy and environment exchanges. That announcement – on the eve of the 2008 Beijing Olympic games – coincided with building efforts by leaders in China's premier cities to promote, at least on a rhetoric level, municipal level policies aimed at reigning in growing energy demand.

Shanghai is doing more than just talking the talk, though.

The Waxman-Markey bill signals Washington’s intentions to pony up to fund deforestation prevention as part of overall climate legislation. But will climate scientists, C-15 negotiators, developing countries and environmental groups agree on an international forest protection program that everyone, including the trees, can live with?

Scientists and climate policy makers now agree that saving forests is one of the most important things we can do to fight climate change. But that has not always been the case. 

When the Kyoto Protocol was formulated, only reforestation and afforestation – not deforestation prevention – were deemed eligible carbon offsets. By stripping forest conservation of any functional value, a perverse incentive structure emerged: Cutting and replanting trees provided non-Annex 1 countries an optional revenue stream, but keeping living trees standing did not. 

As the next round of negotiations approaches, new scientific findings are challenging the beliefs and motivations that led to the earlier exclusion of forest conservation. 

First, a study released last September challenged the assumption that old growth forests cease sequestering carbon from the atmosphere once they reach a certain age.

Second, land use, land use change and the forestry sector now constitute one-fifth of the world’s emissions. Because trees emit carbon once they are felled, an increase in deforestation would mean even greater emissions.

Despite consensus on the importance of deforestation prevention, though, there is little accord on how to achieve it.

One day after China’s top climate official, Li Gao, requested that his country’s export sector be exempt from greenhouse gas emissions reductions, U.S. Energy Secretary Steven Chu announced the possibility of levying a carbon tariff on countries that do not match U.S. emissions restrictions.

Chu told a House science panel that such border tax adjustments could "level the playing field”.

That statement heard 'round the Beltway signaled a growing uneasiness among politicians that the costs imposed by future climate change laws could put U.S. businesses at a competitive disadvantage and send energy-intensive industries fleeing the United States for countries that don’t have similar restrictions.

The implications both worry climate experts and raise the specter of a trade war, a fear that U.S. officials meeting with their international counterparts in Europe this week have been trying to diffuse.

China appears to be backing out of global efforts to address climate change.

In a move certain to intensify the pre-Copenhagen debate over greenhouse gas reduction targets, a top China central government think tank this week released a framework for quantifying countries' historical emissions.

Under the proposed framework, the State Council Development Research Center (DRC) would create a "historic account" of past emissions and use it to benchmark developing countries that have had lower accumulated emissions over time – like China – against countries with higher accumulated emissions, such as the United States. It would then assign emissions "deficits" to countries that have emitted less.

Using this quantitative assessment, countries with emissions "deficits" would get the green light to emit more greenhouse gases, or they could trade emissions credits with countries that have exceeded their allowances.

The release of this plan supports external analysis that China believes it should have the right to continue to develop free from carbon restrictions until its accumulated emissions are on par with industrialized countries.