Pacific Bridges: Steven Chu and John Holdren May Shape U.S.-China Energy Relations

GLF has been traveling and getting a little caught up on side projects, but let’s play some catchup.  Let’s pick things up with two specific appointments by President-elect Obama which have implications for U.S.-China energy relations–one being the 1997 Nobel Prize Laureate Dr. Steve Chu of Lawrence Berkeley Labs (LBL) as the new Secretary of Energy, and the other being Dr. John Holdren, physicist and energy technology policy professor at Harvard and Director of the Woods Hole Research Center (whom yours truly had the pleasure of meeting in the copy room as a policy intern there way back in 2003) as the White House science & technology adviser.

Besides being a director of LBL, Dr. Chu (pictured right) is also a professor of physics and molecular and cell biology at U.C. Berkeley.  Recently, he has concentrated on biofuels and efficient grid transmission and has been a vocal proponent of increased government investments in energy R&D.  There is a huge R&D funding gap, as this older piece in my first ever blog, A Greener Shade of Gold, identifies. But this is a China blog, and the significance of the appointment of the first Chinese-American to the top energy post in the Obama administration has immense significance.  I would like to think this represents an excellent opportunity to coordinate energy policy and development.  Both the US and China, after all, are facing very similar energy-climate challenges–they are the top two emitters of greenhouse gases, rely heavily on foreign imports of oil and rely heavily on domestic coal resources as the predominant source of electric power, and now, seem poised to re-ope a new chapter of nuclear development.

That the face of U.S. energy policy is Asian could be and should be played to the advantage of strengthening clean energy cooperation between both the U.S. and China.  Chu’s LBL has already a demonstrable commitment to China energy issues as evidenced by their China Energy Group (check out the fantastic China Energy Databook that you can order free of charge).

But the Department of Energy (DOE) is a funny animal.  Energy policy making remains the preserve of the U.S. Congress, the legislative branch of government.  As an administrative organ, the DOE is responsible for executing the laws passed by Congress.  Currently laws probably allow for some level of international dialogue and collaboration between both countries, but nothing beyond a token level, or certainly nothing beyond a level that we can and need to embark on to stem the energy-climate crisis.

Also, the DOE has been a technology-focused agency (and historically, particularly in nuclear energy development), administering energy technology R&D funds among various other administrative functions, but not necessarily engaging in the strategic clean energy planning that is required.

But this might change under Obama’s leadership.  If energy technology R&D significantly increases to the $15 billion per year over the next decade that Obama has promised in his campaign, then it is safe to say that Dr. Chu will have a significant financial war chest to deploy.

Dr. Holdren (pictured left) has been a forceful voice for urgent action to address out energy-climate crisis as well as a  critic of President Bush’s climate and energy policies.   He is also indirectly a recipient of the Nobel Peace Prize, where he delivered the acceptance speech on behalf of the Pugwash Conferences on Science and World Affairs (where he served as Chair of the Executive Committee from 1987–1997), which was recognized for its anti-nuclear proliferation efforts. Dr. Holdren has a clearer history of engagement with China.  He has visited China numerous times and engaged with Chinese government officials and researchers, see e.g., his visit to the Ministry of Science and Technology and various papers and presentations he has written and given.

Both Dr. Chu and Dr. Holdren come from technology traditions (Dr. Chu: ““I think political will is absolutely necessary. But we need new technologies”; see video below; hat tip to to imagine increased cooperation on the nuclear front.  I will let GLF readers decide for themselves the wisdom of this direction.

That both gentlemen are technologists is not a critique on Dr. Chu or Dr. Holdren, per se, by any means.  In fact, it is clear in Dr. Holdren’s work, especially this presentation he gave in Shanghai this March, that he has a firm grasp on the policy and social implications of energy, as well.  Similarly, Dr. Chu’s involvement in the Copenhagen Climate Council demonstrates his leadership in business-science collaboration in the climate change arena.  Unquestionably, both selections are significant improvements over their Bush-administration predecessors.

However, I would offer a word of caution to policy makers who think technology alone offers the clear path to a sustainable energy future.  As we’ve argued on GLF on many an occasion, the necessary innovation that will help us come up with the solutions cannot be restricted to the technological, but must encapsulate policy, business, social and even natural systems innovation.  In addition, discrete technologies by themselves will do no good if not implemented on a whole-systems basis in relation to the context of the technology.  The development of clean, safe nuclear power technology, for instance, would offer little energy security if no consideration is given to the water resources (needed for cooling) and mode of uranium supply at the site of deployment.

Cooperate We Shall, But How?

With Dr. Chu and Dr. Holdren on board, what avenues exist for trans-Pacific collaboration?

Electric vehicles and energy storage solutions is just such an avenue that has just received the ink of the Chinese Ministry of Science & Technology and the U.S. Department of Energy.  This sector is interesting because it may be one where China occupies the superior position–Detroit’s Big Three is in serious trouble while BYD Auto have become world-beaters by releasing the first commercial plug-in hybrid electric car ahead of the likes of Toyota and GM.

Solar is shaping up to be another.

The recent Strategic Economic Dialogue (SED) offers a glimpse of forthcoming collaboration.   At the SED, seven “EcoPartnerships” were announced:

  1. Energy Future Holdings and Huadian Power (clean energy generation)
  2. Denver, Colorado and Chongqing (electric and plug-in hybrid vehicles)
  3. Wichita, Kansas and Wuxi, Jiangsu (clean water and air)
  4. Floating Windfarms and Caofeidian (wind energy)
  5. Port of Seattle and Dalian Port (“green” ports)
  6. Greensburg, Kansas and Mianzhu, Sichuan (post-disaster “green” reconstruction)
  7. Tulane University and East China Normal University (wetlands research)

For a more complete list of other US-China SED collaborations (energy and otherwise), click here.  Some of the above, specifically #5 ane #6, offer golden opportunities for whole-systems low-carbon collaboration.  Rather than focus on any specific technolgoies or materials, approach is to look at an entire port system or an entire ubran district.  Such an approach is clearly the future!

The future of the SED on the energy and environmental front is open to question, considering it shows an incredible amount of hubris for the U.S. Treasury Department to be directing international collaboration in a domain outside their expertise (or perhaps it represents a last gasp effort on the part of Bush and Paulson to leave some sort of semblance of a positive legacy in the wake of overseeing an utter devastation of the U.S. financial markets).  CELB has as similarly cynical take one one of the SED projects.  Still, if the substance of these programs are at least half credible, it could offer Dr. Chu, Dr. Holdren, and the rest of Obama’s energy and environment team a workable platform to enhance bilateral relations.

Gary Rieshel of Qiming Ventures reckons that the water treatment and management and cleaner coal sectors offer promising market opportunities

But obviously, however, the 900-pound gorilla is the negotiation of a successor treaty to the Kyoto Protocol that meaningfully engages both the U.S. and China.  China has repeatedly stated (most lately, here) that it will not work outside the UNFCCC process, effectively ruling out any sort of parallel bilateral process between the two biggest greenhouse gas emitters.  Of course, such policy positions can be are not set in stone, and a creatively constructed package that addresses China’s economic development concerns and provides the right innovation and financing platforms for collaborative low-carbon project development that is win-win-win for China, U.S. and the other Kyoto Protocol signatories can get us a Copenhagen Consensus.  Can Obama’s eco-crackteam come up with the ultimate whole-systems policy solution to get us there?

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