average annual growth rate 2000-10: 10% from 1990 to 2009, moved from net exporter of oil to...

The Two Giants: Energy Policy in China and the United States

Energy System - China

China’s boom

Average annual growth rate 2000-10: 10%

From 1990 to 2009, moved from net exporter of oil to world’s second largest net importer

World’s largest producer and consumer of coal –46% world’s coal consumption

Projected to be top importer by 2014

Electricity system - China

China - Coal

Economy size

US 16 trillion China 12 trillion and gaining

Population US: 316 million China 1.4 billion

Oil, Coal consumption – US v China

COAL

US 2012 – o.9 billion short tons (declining)

China 2012 – 4.0 billion short tons (rising)

OIL

US 2013 – 18.9 million bpd

China 2013 – 10.7 million bpd

Renewable share in electricity – US v China

CHINA 2012

Hydro – 22% capacity

Other renewables 6.2% capacity

US 2013

Hydro 6.6% energy 7.4% capacity (summer

2012) Other renewables

6.2% energy 7.2% capacity (summer

2012)

Growing share of global GHGs

China still modest per capita

Gilley: Authoritarian vs. Democratic Environmentalism

Authoritarian –concentrates authority in few executive agencies manned by capable and uncorrupt elites seeking to improve environmental outcomes

Democratic--spreads authority over several levels and agencies of government, including representative legislatures, and that encourages direct public participation from a wide cross-section of society

Gilley: Authoritarian Environmentalism in China

“Citizen participation is limited to learning and obeying state policies.” p. 291

“A Renewable Energy Law was completed in 2004 after fewer than nine months of drafting and then passed into law with no amendments by an unelected national legislature in 2005” p. 290

China – energy governance National Development and Reform

Commission (NDRC) -primary policymaking and regulatory authority in the energy sector,

National Energy Administration (NEA) (formed 2008) key energy regulator for the country approves new energy projects sets domestic wholesale energy prices implements central government's energy policies,

National Energy Commission (formed 2010) – coordinate energy policy among the various agencies under the State Council

China – National Oil Companies China National Petroleum Corporation

(CNPC) - leading upstream player in China publicly-listed arm PetroChina, together account for roughly 60 % domestic oil

and 80% natural gas output China Petroleum and Chemical Corporation

(Sinopec) downstream activities (refining and distribution)

 China National Offshore Oil Corporation (CNOOC): offshore oil exploration and production

China GHG policy

Reduce emission intensity of GDP 40-45% by 2020 (over 2005 levels)

At Durban , China agreed to negotiate a legally binding treaty (including the possibility of an absolute emission cap) by 2020

Does authoritarian work?

Can produce a rapid response to problem

But if fragmentation remains, can undermine implementation due to illegitimacy Federalism issues

Low social concern makes authoritarianism more necessary and more difficult

US Energy Policy

US energy system Institutions Policy

US energy system (2011)

http://www.eia.gov/totalenergy/data/annual/pecss_diagram.cfm

US energy system 2012

US energy system

US energy system

US GHG emissions at 1996 levels

US governance

Federalism: gives extensive powers to 50 states

Separation of powers Congress▪ 2 equal chambers▪ House – 435 seat elected every 2 years▪ Senate – 2 seats per state elected every 6

years President – elected separately every 4

years Courts

US governance: extraordinary majorities

House: 50% +1 Senate: effective majority is 60% Treaties: 2/3rd of Senate requires President needs to sign laws passed

by Congress If president vetos, 2/3rd of both

houses can overturn

US governance: extraordinary majorities

Congress and president same party: working majority is 60%

Congress and president different party: working majority is 67%

Note contrast to Canada, China

Party Balance in Congress - Obama

2009-10 House and Senate Democratic

2011-2014 House Republican, Senate Democratic

Current Senate: 55 D – 45 R Current House: 201 D – 231 R

US energy policy history

1973 oil shock prompted Creation of Department of Energy 1977 Strategic Petroleum Reserve Corporate Average Fuel Economy

Standards Every president developed a plan

but little coherence

2013 Inaugural: We will respond to the threat of climate change, knowing that the failure to do so would betray our children and future generations.  

The path towards sustainable energy sources will be long and sometimes difficult.  But America cannot resist this transition, we must lead it.  We cannot cede to other nations the technology that will power new jobs and new industries, we must claim its promise.  That’s how we will maintain our economic vitality and our national treasure -- our forests and waterways, our crop lands and snow-capped peaks.  That is how we will preserve our planet, commanded to our care by God.  That’s what will lend meaning to the creed our fathers once declared.

Automobile efficiency standards

2001 – US cars and trucks averaged 24.7 m.p.g.

2011 --29.6 m.p.g. New regs: up to 55 m.p.g. by 2025

Feb 2014: announces intention for new heavy duty vehicle standards

Sustainable Energy Policy 34

Obama agenda

Try Congress first – cap and trade Use administration action if that fails

Core focus on auto standards Emerging focus on coal▪ Strong standards on new plants▪ New coal plants essentially off the table

▪ New commitment to regulate existing plans, but timing uncertain

Climate Legislation - federal 2009 – House passes Waxman-Markey

17% reduction by 2020 Riddled with concession

2010 Senate Coalition building required giving everything away Coalition of senators fell apart when initiative got

framed as “gas tax” “on climate change, Obama grew timid and gave

up, leaving the dysfunctional Senate to figure out the issue on its own”

Personal impact

State initiatives: renewables

As of early 2014, 38 states have RPS or Alternative Energy Portfolio Standards; another six have voluntary standards (source)

California most aggressive – 33% by 2020

State initiatives - GHG

California leadership 1990 levels by 2020 (30% reduction) 80% below 1990 levels by 2050 Cap and trade program now in place

Reflections on Two Giants

Global leaders in power, energy, emissions

2/5 of global GHG emission Different stages on carbon path Chinese growth core driving force

emission intensity: >factor of 2 difference

Starkly different political systems If they cooperated, enormous

change possible Prospects for meaningful

cooperation?