U.S.-China: Cooperate we must, but please, no G2!
“This climate change crisis is a game-changer in U.S.-China relations…an opportunity that cannot be missed”
- Nancy Pelosi, U.S. House Speaker, May 26, 2009 in Beijing.
The nomination of Jon Huntsman, currently the governor of the state of Utah, as the U.S. ambassador to China brings back into focus the role of clean energy cooperation in the furthering of U.S.-China relations. The choice of Gov. Huntsman has been lauded for various reasons-his fluency in Chinese, his track record as an Asian diplomat, the bipartisanship on the part of President Obama in nominating a Republican for the position (although some say he did so to take Gov. Huntsman, a likely Republican contender for the 2012 elections, out of contention)-but receiving less attention is the fact that Gov. Huntsman is a vocal advocate of the clean energy economy and the greenest governor that Utah as ever had (see youtube video interview).
The siren calls for US-China collaboration on clean energy and climate change action have been sounding nonstop ever since a new sheriff took over in Washington, D.C. Such exhortations are well grounded in the similarities of the two countries’ energy profiles. China and the U.S. are the two largest emitters of greenhouse gases (GHG) in absolute terms on annual basis, both are heavily reliant coal for power and imported petroleum for transportation fuel and other non-transportation uses and both have had (and continue) to build continental-wide energy infrastructure to support a large population. Various groups, such as Brookings Institution, Asia Society and Pew Center, Natural Rersources Defense Council, and Carnegie Endowment for International Peace have recently published reports providing policy recommendations for clean energy cooperation to form the basis of a momentous new chapter in U.S.-China diplomacy.
But Elizabeth Economy and Adam Segal warn in a recent piece titled “The G2 Mirage” in Foreign Affairs (subscription required) that we are only setting ourselves up for failure we we think that the U.S. and China are the only players in the game:
Even after 30 years of engagement, the United States and China still disagree about how the world should work. When there is agreement on the principles of global governance, more narrow economic interests or differences in political values typically make a common front elusive. And even when shared values and interests allow the two sides to move forward, the vast gap in governance and implementation capabilities often leads to mutual frustration and recriminations.
Economy and Segal go on to lay out in stark terms the challenges in implementing green policies and introducing green technologies in China:
As Washington weighs the value of pursuing a bilateral climate deal with China, Beijing’s ability to enforce regulations will be called into question. Effective climate policy depends on transparency in reporting emissions, yet in the run-up to the Olympics, Beijing’s published air-pollution index did not include two of the most dangerous pollutants: ozone and small particulate matter. A bilateral climate deal would also necessitate large-scale transfers of energy-related technologies, such as advanced materials for wind turbines, from the United States to China. However, China lacks the legal infrastructure needed to enforce intellectual property rights-a weakness that will worry the European, Japanese and U.S. firms that design new green technologies. Even basic policy initiatives, such as the implementation of energy-efficient building codes, require a degree of enforcement capacity and official accountability that does not exist within the Chinese government.
It is also a bit presumptuous to think that, despite the similarity of the energy profiles of both countries, that China would consider the US as a priority partner of energy cooperation. Recall what happened in 2005? That was the year that left a taint in China-US energy relations when China National Offshore Oil Corporation’s bid to acquire California-based Unocal in 2005 was thwarted by U.S. legislators on national security grounds, but derided by others as protectionism and paranoia. It was an event that has sown seeds of distrust (but perhaps somewhat understandable considering the heightened national security concerns of a nation with the images of 9/11 still fresh it its collective mind).
Indeed, Michael T. Klare, in his book Rising Powers, Shrinking Planet: The New Geopolitics of Energy, though starting with the basic framework that a US-China relationship is the most logical starting point, warns that the Chinese may see it dffierently as there may be more obvious partners for China in energy cooperation than the U.S., such as Japan. Japan is after all just a hop, skip and a jump from China and already one of the most energy efficiency economies, leading the world in solar, automotive and energy efficiency technologies. Furthermore, clean energy cooperation between the two countries can go a long way to help diffuse decades of pre-existing animosity. For example, creating a shared vision to jointly exploit the Chunxia/Shirakaba natural gas fields in the East China Sea would create the impetus for the two to strike a deal to resolve their boundary dispute over the area.
Economy and Segal make a similar observation about Japan, noting that:
…Japan is pursuing a different tack and has already started to provide development assistance to China for clean-energy projects thanks to its highly sophisticated public-private partnerships that provide government financing for privately held Japanese technology companies. Beijing and Tokyo are moving ahead with technical cooperation and demonstration projects to capture and store carbon, enhance energy efficiency, and exploit renewable energy resources.
So what does all this mean for the prospects of the U.S. and China working together? The mismatch of G2 certainly does not undermine the need for US and China to work together, it just means that we need to rope in the rest of the world as well.
The World is Flat
Chinese Premier, Wen Jiabao, rejects the idea of a G2, saying recently:
It is impossible for a couple of countries or a group of big powers to resolve all global issues. Multipolarization and multilateralism represent the larger trend and the will of people…[China] stands ready to develop friendly relations and cooperation with all countries….”
Economy and Segal echoes the Premier’s views, and elaborates:
Although the United States needs to coordinate with China to respond to global challenges, elevating the bilateral relationships is more likely to lead to a quagmire, with recriminations flying back and forth, than to a successful partnership. To escape this downward spiral, Washington must solicit the help of the rest of the world. The United States is not alone in recognizing that China affects all the critical issues of the day or in seeking more from China as an emerging global power. Throughout the world, countries are realizing that the issues that currently define their relationships with Beijing cannot simply be negotiated bilaterally…Despite insistent calls for a bilateral U.S.-Chinese effort to address climate change, cooperation would be managed best by involving other nations. The United States and China are the two largest emitters of carbon dioxide, and each is using the other as an excuse for inaction. China is currently calling for all the advanced industrialized nations to devote one percent of their GDPs to a climate fund for developing countries-a mechanism that would subsidize the transfer of clean energy technologies to Beijing. The United States simply does not have the financial resources available to respond to this challenge.
The simple lesson is that we simply need to harness every country’s strengths. It is important to appreciate that the rest of the world outside of this “G2″ has so much to offer. China is already forging ahead with energy cooperation with other countries who are more interested in action rather than just talk. In the last edition of Green Hops, we noted:
International cooperation is the name of the game in this new era of climate diplomacy. In the past month alone [i.e. the month of April], there have been announcements that China will be collaborating with Switzerland on water resource management, with Mongolia on energy and infrastructure, with Taiwan on LEDs, with France on nuclear, with Russia on natural gas and nuclear, the UK on carbon capture and storage and the EU on energy efficiency.
Where is the U.S. in all of this? In fairness, the U.S. hasn’t necessarily been a slouch either. The Top-1000 Energy-Consuming Enterprises Program (see previous post) is a fine example of how the U.S. has lent its expertise to create impactful change in energy efficiency in China. Similarly, U.S.-led organizations like Energy Foundation (through its China Sustainable Energy Program) and Natural Resources Defense Council are also doing great work, but the scalability of their work remains to be seen.
Perhaps some of the more interesting U.S. initiatives we have seen recently are the mayoral training program by the Joint US-China Cooperation on Clean Energy (JUCCCE) and the training of environmental managers under the Guangdong Environmental Partnership program run by the Institute of Sustainable Communities (ISC). The JUCCCE and ISC program are civil-society led initiatives that creates real impactful capacity building beyond (A) the rhetoric at the government-to-government level, and (2) technological solutions (solar, cleaner coal, blah blah blah…) but instead looks at “software” and “heartware” (as opposed to just “hardware”), which is a much more difficult but absolutely necessary task to embark on. See previous post “Technology as a Panacea? Bah Hambug!“).
One other caveat. Clean energy is paramount, but it is not the only worry of the Chinese. Despite the momentum on green stimulus projects and climate change collaboration has gained in recent months, some sage words in 2007 volume by the Aspen Institute on various China policy issues, entitled China’s March on the 21st Century (p. 56) should be heeded:
Energy security is just one interest-albeit an important one-that the Unites States must manage in its relationship with China. Other issues loom large (e.g. Taiwan, North Korea, human rights, trade, and intellectual property rights) and none of them can be considered wholly independent of one another. The United States must recognize that China has its own set of regional concerns and challenges involving energy. This manifests itself as acute energy and political competition with Japan (including a volatile dispute over oil and gas drilling rights in the East China Sea [as discussed earlier in this blog post] and deepening energy ties with Russia….The United States has limited leverage on China to encourage modification of its energy policies…particularly because China has no immediate capital needs.
Thus, while clean energy development and environmental protection have risen rapidly up the national policy agenda in recent years, one should not be surprised that China continues to take advantage of its strong balance sheet to make strategic multibillion dollar deals in fossil fuels, all just this year, with the likes of Russia ($25 billion deal), Kazakhstan ($10 billion), Kuwait ($9 billion), Brazil ($10 billion and counting) and even Singapore ($1 billion). And lets not forget China’s forays into Africa. With a dependence on foreign oil to meet 50% of its needs, and with options for clean renewable liquid fuels limited, expect China’s cash/loans-for-oil and infrastructure-for-oil diplomacy to continue for some time to come. (See also this article by Caijing on China’s global oil hunt).
Bottom line: Collaborate multilaterally we must, beyond simply government-to-government rhetoric and, with respect to China, appreciate how energy-cliamate fits into its full agenda.
June 1st, 2009 at 3:10 am
This is an excellent post considering the upcoming speeches this week by Dr. Jeffrey Sachs at the Asia Society and Todd Stern’s address at your Center for American Progress, both of which focus on US-China climate cooperation.
Speaking of Mr. Stern’s address, do you think he will offer anything of substance during his address? Perhaps a new roadmap that beefs up investment in carbon capture and storage, instituting a Chinese carbon market, or setting an international [CO2] atmospheric concentration goal? (I know you’re skeptical of CCS actually working, but it would reduce emissions by a substantial amount if commercially viable) Or maybe details on a possible US-China Climate Change MOU as outlined in a London Guardian article on our joint secret talks. (”China and US held secret talks on climate change deal”; 5/20/09)