I am back again, energy enthusiasts, and as promised have brought more information. I took a look last week at international reactions to EPA’s new carbon regulations, with a specific focus on Canada and Australia. This week my fellow intern, Joe Singh, and I analyze another area of the globe. Joe has a background in economic policy analysis and is helping ACCCE research the global coal market. As I mentioned last week, EPA’s costly new plan would have virtually no effect on climate change, with less than 1 percent in carbon reductions. The Obama Administration understands this, but believes that if they lead by example carbon-emitting nations like China and India will follow. In his research, Joe points out that assuming these nations will follow our lead is contrary to the growing coal consumption in both these nations.
China, the world’s largest coal consumer with one of the fastest growing economies, has said it will set emission limits. Make no mistake, however, China is not exactly following the administration’s approach. The EPA set state by state targets that would reduce carbon dioxide (CO2) emissions from the electric sector by 30 percent by 2030. China, on the other hand, has instead adopted an emissions intensity target. This emissions intensity target would limit the amount of CO2 emitted for every dollar of economic activity in China, on average. The reason for using emissions intensity rather than absolute emissions is to allow economic growth, which China wishes to maintain. In Joe’s research, he cites an Australian National University report which found that if China maintains its economic growth, even with a significant emissions intensity target in place, CO2 emissions will still grow. Put simply, even if China can meet the targets it sets, its continued economic growth will still result in increased CO2 emissions – not less.
The results of future international negotiations on climate change are uncertain. One can look to the past, however, to provide clues for potential future actions. In two recent international climate negotiations, agreements could not be reached because of defiance conflict between the developing and developed world. The United States did not ratify the Kyoto Protocol, because it exempted developing nations, like China, from reducing their emissions. Chinese officials claimed that it was “unfair to expect impoverished people in…developing countries to cut back on energy consumption, which is not even sufficient to meet their basic living conditions.” China’s resistance to a binding agreement arose again during the Copenhagen conference, which occurred during Obama’s first term in 2009. In a study available on EPA’s website, Western officials blamed the failure of this conference on China’s opposition to binding global emissions reductions. This opposition was traced once again to China’s view that emissions reductions are robbing developing nations of their right to industrialize. Considering this climate impasse happened only five years ago, it’s unclear if Chinese willingness to reach a binding agreement has changed. All of this makes me wonder whether the administration’s plan to reduce CO2 emissions will be enough to overcome a history of failed climate negotiations with China.