My blogging has been irregular as of late due to heavy commitments with my day job, but to compensate, I hope my blog readers have also been following my regular tweets at @GreenLeapFwd. Today,The Guardian named me among the “Top 50 Twitter climate accounts to follow“, and #4 among climate bloggers. A great honor!
I am equally thrilled that my colleague and uber-prolific blogger, among climate bloggers.
Thanks to my Guardian and followers who helped shape Guardian’s list. Twitter has allowed me, in my many moments of insane busyness, to still share links on the latest energy, environmental and climate news on or from China.
But that’s not excuse to getting back to some serious blogging…
A guest post by Lucia Green-Weiskel (pictured right) who describes a groundbreaking initiative in Guangdong to set up a greenhouse gas registry.
For the last 20 years there has been a global effort to quantify and more accurately understand greenhouse gas emissions. China and the United States – which together are responsible for 40 percent of the world’s emissions – have been latecomers to the mostly European-initiated efforts to quantify, standardize, manage and reduce greenhouse gas emissions and energy consumption.
But that is beginning to change as the Chinese government is making clear its own brand of energy-saving strategies. For instance, China’s energy-efficiency targets are one of the most ambitious and environmentally progressive policies in the world. However, to meet those targets, China will need to develop a system to quantify energy use. To the extent that China decides to take action on climate change more directly, it will also have to track greenhouse-gas emissions. If such monitoring system is to be accepted by the international community as a bona fide action in the context of international climate negotiations, it must be transparent, accurate and reliable, in line with international standards and accompanied by a system of third-party verification. An online carbon and energy registry will support China’s drive to meet its own energy targets, facilitate bilateral cooperation between China and the US on climate change and support China’s participation in international agreements on carbon reduction. But questions remain about how to implement such a tool, who should administer it and the methodology to use.
Creating a Registry
In response to this need the Innovation Center for Energy and Transportation (iCET) has developed the Energy and Carbon Registry, the first ever, public, government-supported, online registry for carbon emissions and energy consumption reporting system in China. The ECR is a Read the full story
Last Thursday (June 4), the U.S. Senate Committee on Foreign Relations conducted a hearing with the self-explanatory title of “Challenges and Opportunities for U.S.-China Cooperation in Climate Change.” An all-star trio of China hands provided testimony: Kenneth Lieberthal of University of Michigan and visiting fellow at Brookings Institution, Elizabeth Economy of Council on Foreign Relations and Bill Chandler of the Carnegie Endowment of International Peace. Although actual testimony (except perhaps Lieberthal’s) did not track the prepared testimonies that are accessible in the preceding links, they are all well researched and reasoned and worth the read. [Update: Video of actual testimony available here]
Senator John Kerry, the chair of the Committee, set the context for the session in his opening statement:
Last week, I visited China to assess where the country currently stands on climate and energy issues, and to explore opportunities for cooperation going forward. I met with top Chinese political leaders, energy executives, scientists, students, and environmentalists. What I heard and saw was enormously encouraging. Chinese decision-makers insisted to me repeatedly that China now grasps the urgency of this problem. People who, a few short years ago, weren’t even willing to entertain this discussion, are now unequivocal: China is eager to embrace low-carbon development pathways and is ready to be a positive, constructive player in negotiations going forward.
The question is how.
How can we believe you?
Rather than provide a thorough summary of the proceedings, I will focus on what I thought was the key message that lays at the core of Economy’s testimony, but was also touched upon by Lieberthal and Chandler-the need for measurable, reportable and verifiable (MRV) actions (<–very helpful WRI report, btw), as called for in the Bali Action Plan. In Economy’s words, MRV is “the very building blocks of an effective domestic climate program for China as well as China’s commitment to a robust international [climate] regime.”
But Lieberthal was realistic about what China could commit to in Copenhagen, saying: Read the full story
The following is the complete transcript, modified and supplemented for completeness and readability, of the closing speech that the author of this blog (pictured below) delivered on November 11 at the JUCCCE Clean Energy Forum in Beijing.
We are at war. A world war. But unlike World War I or II, this is not a war about military tanks, but it’s a war about gas tanks. This is not a war about military strength, it’s a war about political strength, and innovation. This is not a war about conquering territories, its about conquering our addiction to fossil fuels. And unlike the first two wars, we are all fighting from the same side. We are engaged in a global energy and climate war. We have essentially, through our reckless consumption of the earth’s natural resources, provoked an unanticipated response in the world’s climatic system. We have essentially pitted Mother Nature against Mother Nature, and we are all caught in the middle.
So what now?
We need a serious restructuring of the way we organize our energy system, implement new rules and policies, and adopt new ways of using energy. We need to, as Rob Watson says, change transform “ego-nomics” into “eco-nomics,” and we do this by appropriate adapting human laws to the immutable laws of nature.
So how do we get there? How do we achieve the innovation to meet the energy-climate challenge? We need an smart and well informed mix of regulatory and market mechanisms. There is no single silver bullet, but I believe that over the past two days of discourse, we have collectively started forming a framework for the array of solutions, a full complement of many green bullets to get the green revolution under way. I see three themes emerging from our discussions: Read the full story
Peggy Liu, founder and Chairperson of Joint US-China Cooperation on Clean Energy (JUCCCE) , an innovative bilateral public-private partnership based in Shanghai, speaks to The Green Leap Forward.
Energy cooperation was one of the key issues that underpinned the fourth US-China Strategic Economic Dialogue held last week. Vice-Premier Wang Qishan, the head of the Chinese delegation released a statement calling for increased cooperation between the two sides on several fronts, including R&D, coordinated energy policies and increased bilateral dialogue. The energy discussions culminated in a commitment to negotiate a ten year energy and environment agreement.
Encouragingly, however, a handful of individuals and organizations have not waited for any ink to be spilled in the diplomatic arena before jumping into action. One such individual is Peggy Liu and her organization called Joint-US Cooperation on Clean Energy (JUCCCE).
The Juice on JUCCCE
JUCCCE was founded in April 2007 by Peggy Liu, a former McKinsey management consultant and COO of Mustang Ventures, a Shanghai-based venture capital firm. The organization was launched out of the MIT Forum on the Future of Energy in China held last year in Shanghai, where JUCCCE is also now based.
JUCCCE is a non-profit incubator of cleantech and energy efficiency capacity building institution initiatives seeking to serve, as Liu describes it in the video below, “a single bilingual and bicultural organization that will act as a hub of information exchange and cooperation” on clean energy in China. Based on the observation that China’s rapid development has it compressing 30 years of industrialization in the space of ten, JUCCCE has set itself a ten year mandate to create a legacy of self-sustaining, local capabilities. Tapping into Liu’s vast network of top minds whom she has become acquainted with as a result of her stints at consulting and venture work, JUCCCE conducted a comprehensive study of the Chinese energy industry and identified a dozen key projects designed to create the greatest impact in the shortest amount of time. What I love is the Chinese name for the organization, which is 聚思 (jǘ sì), which is not only a phonetic translation of the acronym, but by itself literally, and appropriately, translates in English to “collective thought” or “coalition of thinkers.”
Underpinning JUCCCE’s philosophy are three fundamental observations (the need to accelerate information flow, need for integrated urban planning and need to strengthen supply chains) which Liu describes in the following video:
Based on these observations, JUCCCE has formulated a three-pronged approach of education (skills building and leadership development at every level through effective channels), collaboration (with international and local institutions, taking advantage of web-based communications) and deployment (of customized green strategies for specific industrial sectors).
On education, Liu elaborated in an exclusive interview with The Green Leap Forward:
China doesn’t have an energy policy problem [GLF note: see, e.g. the various progressive policies that this blog has highlighted in its maiden post], rather, it has an energy workforce problem. We can have all the solar panels we need free of charge and that will not be enough if we don’t have the necessary skilled people to install these systems and maintain them. So, we believe that people matter…Education and skills building are very important.
Liu continued to explain that the ability to implement these progressive energy and environmental policies or programs is most effectively achieved through the strategic targeting of “channels of decision makers” rather than individual decision makers. Because Liu wants to teach the Chinese how to fish rather than catch the fish for them, JUCCCE’s programs are designed to be replicable and scalable. Let’s take a look at two of JUCCCE’s programs that Liu described for The Green Leap Forward, and that targets the decision-making channels of mayors and schools, respectively.
Mayoral Training on Energy Efficiency
One program is the Mayoral Training for City-level Energy Efficiency Programs, which was announced as a one of the commitments under the Clinton Global Initiative in 2007. As the name of the program implies, JUCCE is planning workshops to equip mayors of cities nationwide with energy efficiency solutions to deploy in their home jurisdictions. JUCCCE will partner with international experts and energy efficiency solution providers (many of which are multinational corporations) in order to build a web-based database of best practices and products, sector-by-sector, that can be presented to, and easily deployed by, the workshop participants.
The importance of focusing on cities is obvious. I have previously highlighted a McKinsey report on China’s rapid urbanization to facilitate the largest scale of rural-to-urban migration in history—approximately 350 million by 2025. “In China, city mayors are the kings of their fiefdoms, so it is really important to target them,” explains Liu, referring to the broad authority of city mayors in determining economic and development policy. This acceleration of information flow of best practices/products targeting mayors as key channels of decision making becomes even more effective when coupled with the State Council’s new policy to include environmental and energy efficiency criteria in the promotion evaluation of local and provincial bureaucrats, as well as the national goal of increasing energy consumption per unit of GDP by 20% by 2010 (see here).
Shanghai Lighting Program
Another noteworthy JUCCCE program involves the replacement of 10 million conventional incandescent light bulbs with energy efficient compact fluorescent light (CFL) bulbs in Shanghai. The brilliance of this lighting program is two-fold. First, it targets youth by directly enlisting the help of Shanghai school children for distribution. Each student will receive up to 18 CFL bulbs and will be asked to bring back an incandescent bulb for every CFL bulb they replace it with. Liu conservatively estimates that the program will reduce approximately 2.2 million tons of carbon dioxide emissions over the lifespan of the CFL bulbs. This is environmental education at its best— empowering the young to recognize that little actions can make a difference by coordinating and aggregating individually small efforts into part of a large-scale city wide program with substantive results.
Second, the method of financing the program is highly innovative. The purchase of the CFL bulbs will be made by proceeds from advertising on the packaging of the CFL bulbs and by the clean development mechanism (CDM) under the Kyoto Protocol. JUCCCE and its partners are exploring the possibility of structuring the project as a programmatic CDM, which I have previously described in the context of Xiamen’s ecocity efforts. Although Liu recognizes the legal and technical complexities involved in structuring such a CDM project, she is hopeful that such a program would be approved by the CDM authorities as it would represent of the first energy efficiency lighting programs to ever use the CDM.
Liu expects the program to launch in the next six to seven months, but JUCCCE has in the meantime partnered with Citi and GE to hold a pilot program distributing 10,000 CFL bulbs last November (pictured). The hope is that the success of this larger CFL lighting program can be adopted and replicated in cities across the country.
Why JUCCCE Matters
What makes organizations like JUCCCE so important in tackling the energy and climate challenges of our day is that it effectively bridges the gaps between the public and private realm. In the vocabulary of an economist, it helps correct market failures such as free rider problems and information asymmetry and creates incentives or platforms for businesses and policy makers to undertake clean energy initiatives that they would not normally undertake. This is demonstrated well in the two projects described above. In the case of the mayoral training program, information asymmetry is overcomed by the creation of a web-based database. In the case of the Shanghai lighting program, financial barriers are overcome through the use of innovative financing techniques.
China, and the rest of the world, needs institutions like JUCCCE to “fill in the gaps” because of the limitations to motivations/incentives inherent in political and commercial institutions to take action. The Green Leap Forward looks forward to profiling more innovative organizations like JUCCCE that are breaking silos to redefining how all stakeholders can think about tackling our energy and climate crisis.
Publicly listed Chinese companies will soon be subject to heightened environmental disclosure requirements. It is reported that the State Environmental Protection Administration (SEPA) is developing a set of disclosure rules that may go further than their Western analogues, potentially requiring the reporting of SO2 and CO2 emissions and energy efficiency indices (see, e.g. current efforts in the U.S. for heightened climate change-related disclosures). Click here for a more detailed analysis on corporate environmental disclosure in China.
This is yet another example of the Chinese government deploying gatekeeping mechanisms in the debt and capital markets, building upon its green credit policies. Viewed another way, it is also another addition to regulatory tools employing information strategies to encourage environmental compliance. Earlier, we have seen name-and-shame tactics that form the basis of the China Air Pollution Map and China Water Pollution Map. Other efforts are underway to build environmental technology databases to help companies and governments to adopt greener technologies and practices.
But mandatory self-reporting is different in that the data is self-generated, encouraging self-awareness and increase self-reflection (a “reflexive law” approach as environmental law scholars would term it). Investors and consumers are logical target audiences of such green disclosures. However, recognizing that the jury is still out as to whether superior environmental performance necessarily correlates with superior financial performance and that consumers make choices based purely on the greenness of products, the most important target audience of such data are the reporting companies themselves. In many cases, these enterprises do not fully appreciate the extent of the environmental impact of their activities; requiring such companies to conduct environmental and energy audits will bring such information to bear, and if mandatory environmental reporting regimes in other countries are any indication (case in point, the U.S. Toxics Release Inventory program), the public scrutiny of such disclosures is alone enough to spur the reporting companies to improve their environmental performance voluntarily, without any additional regulation.
While the establishment of a disclosure regime is a promising start, such information strategies are not much use if the information is not effectively disseminated or analyzed. The public availability of such information must be complemented with the analysis and comparison of such information across companies in like industries, and therein lies the opportunity for information aggregators and sustainability consultancies to explain to the public, and the reporting companies themselves, whether the reporting companies have met the grade.