Dale Jiajun Wen*

While preparing an article for a US audience, a US colleague asked me some very good questions related to China and climate change. Below you can find my personal take on these questions as an independent China researcher.

What do you think the Chinese people expect the US delegation to commit to in Cancun? What are the main goals of the Chinese delegation here in Cancun?

The Chinese expect the US to honor the Convention and the Bali Action Plan, which the US government did sign. We should not forget that, UNFCCC Art 3.1 specifies that developed countries must “take the lead in combatting climate change”.

The Chinese people are asking the US to stop using China as an excuse for its own inaction, as clearly stated in an open letter by some leading academics and Chinese green groups http://campaigns.item.org.uy/?q=en/node/1978
“here we want to emphasize that China is not and must not continue to serve as an excuse for continued inaction by the United States, especially as China is moving forward with serious efforts. The United States, as the world’s richest country and its greatest historical polluter, must fulfill its obligations under the UNFCCC and Bali Action Plan. We call upon the United States to respect and contribute to the UN process, instead of undermining it and becoming a shield for other Annex I countries to hide behind.

Despite President Obama’s rhetoric of constructive engagement on climate change, the United States remains the only Annex I country that has not ratified the Kyoto Protocol. It has failed to establish effective national climate legislation. It has offered weak emission reduction pledges for 2020 – only 3% to 4% below 1990. And it has instead sought to draw attention away from its own failures in part by focusing attention on China, even though it lags behind China in many emission reduction measures, as shown above.”

The recent 301 petition by the US union have further consolidated the impression by many Chinese public that US has no real concern for the climate, but only using it as a China-bashing tool whenever convenient. The inconsistency of the US climate and trade policy is too obvious to ignore.

In Bali, US was asked “lead or get out of the way”. To give it fair credit, the Bush government did get out of the way and allowed the world to move forward with Bali Action Plan. Now it is again the time to ask the US “get out of the way if cannot lead”. The last two years with President Obama and especially the mid-term election made it clear that the US won’t be getting on board (let alone lead) any time soon. The US government needs to be honest to acknowledge that it cannot lead, not now, but to get out of the way to allow the rest of the world to move forward with the implementation of “Bali Action Plan”. Climate architecture and global ambition are more important than pretending to be a leader for its domestic audience.

What of these goals are more flexible (can negotiate) and which are firm (can’t negotiate?)?

The principle of “common but differentiated responsibility” is very important for the Chinese population. Those who have only visited Beijing and Tianjin may have the illusion that China is already a developed country. The high concentration of wealth in the cities and imbalanced development tend to give people such illusions. Yet as someone working on agriculture issues as well, I have routinely visited villages without running water. For example, this August, I visited an organic farmer friend in Hubei province, Hengshui county, which is only 3 hour train ride from Beijing. His village does have tap water, but it only comes once every 5 days. This is what “right to development” means for me: someday my farmer friend can and should have running water all the time. In an open letter to the Chinese government (http://campaigns.item.org.uy/?q=en/node/1975), Chinese academics and green NGOs demand the government to strongly uphold the principle of “common but differentiated responsibility” in international negotiations. For domestic policies, they ask the government to take more concrete measures to curb consumerism and rapid emission rise in some highly developed urban areas: including higher fuel tax, staircase electricity pricing, establishing absolute emission reduction targets for highly developed and high emission areas etc. They also ask the government to strengthen South-South cooperation in mitigation, adaptation, technology exchanges and cooperation, and low-carbon development planning, etc, and increase financing and technology support to least developed countries. In essence, they want the government to uphold “common but differentiated responsibility” in international negotiations, and practice it in its domestic and international policies as well. All these are not for the interest of China only, but for the interest of the whole developing world. The Chinese public expects and demands the Chinese delegation to play a strong and constructive role in advocating the interest of G77.

The Chinese government has also made it clear that it is unnegotiable to link climate aid and transparency, as said recently by Huang Huikang, the Chinese Foreign Ministry’s special representative for climate change talks http://www.alertnet.org/thenews/newsdesk/TOE6AI077.htm

As a NGO observer, I very much feel the narrow focus by US government and media on the so called transparency issue with China is just another smoke screen to divert attention from the real issues, especially the mitigation targets by developed countries. China is very serious with its announced targets. In recent months, in the final push to achieve its domestic energy efficiency target for the 11th five year plan, not only some factories were shut down, but also some residential areas experienced black outs (a related report could be found here http://www.scmp.com/portal/site/SCMP/menuitem.2af62ecb329d3d7733492d9253a0a0a0/?vgnextoid=6431783438a2b210VgnVCM100000360a0a0aRCRD&ss=&s=News).
Have any Annex 1 country had black outs in order to make its Kyoto targets? Yet in most discussion about transparency in western media, China is presumably guilty. Of course such kind of the discussion and hinted accusation undermine the trust between the north and the south.

Does the 12th five year plan include designs for a cap and trade program in China??

In the 12th five-year plan, a number of possible mechanisms are included to reach the energy and carbon intensity targets, including:
-Carbon Tax or Cap-and-Trade system
-Environmental and resource taxes
-Subsidies for low-carbon tech. and development
The Chinese government does not view cap-and-trade and carbon tax as mutually exclusive. They are actively exploring both and other options.
It should also be noted that the proposed Chinese ETS system is a domestic system based on national energy intensity reduction targets rather than one linked to international legally binding emissions reduction targets.

Does China have the financial market maturity to successfully implement a cap and trade program?

This is exactly the wrong question to ask. We should not forget that it is the “mature” and “innovative” financial institutions of the Wall Street which brought us into the financial crisis. In order to design a carbon market for environmental and financial integrity, we need to have a honest look at different cap-and-trade schemes which have failed and which have succeeded. One cap-and-trade scheme which works rather well is the acid rain trading system. It covers a much smaller universe of entities, is not dominated by financial speculators (in most years, the majority of the sulfur dioxide trades occurred between related entities, namely, power companies), and never experienced significant problems with market clearing (see details at http://www.epa.gov/AIRMARKET/progress/ARP_2.html). The EU ETS works some what, but have much more problems compared to the acid rain trading system. Yet despite of such evidence, some carbon trading proponents claim that is imperative to ensure liquidity for market functioning, and argue for large markets with unlimited participation from financial institutions. One of my biggest concerns now is that with the scheduled closing of CCX (Chicago Climate Exchange) by the end of the year, some out-of-job wall street carbon traders will go to China and try to sell their “expertise” to the Chinese government. Their policy recommendations, though wrapped in green rhetoric, may very well be recipes for the building of subprime carbon bubble, instead of design for a stable carbon markets with environmental and financial integrity. I hope the Chinese government will have the wisdom and political will to resist the lobbying of global financial institutions in their design for domestic carbon markets.

* An activist scholar from China, Dale Wen has been working on social justice and sustainable development issues. While acknowledging the positive material gains brought by China’s rapid industrialization, she has been critical of its environmental consequence and the growing gap between the rich and the poor, and has been advocating alternative development paradigm with more environmental sustainability and social equity.