China and the Post-Kyoto Climate Change Regime

Janet Xuanli LIAO, PhDJanet Xuanli LIAO, PhD

Nottingham UniversityNottingham University

26 October 201026 October 2010

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CONTENT

• The International Regime on climate change

• The principle of common and differentiated responsibilities: from Kyoto to Copenhagen

• Key Issues under debate

• China’s position on climate change

• How to find a “fair” solution?

• China and the post-Kyoto climate change regime

The International Conventions on Climate Change

International Conventions on Climate Change

• The UN Framework Convention on Climate Change (UNFCCC), NY, 1992

• 1995 - COP (Conference of the Parties) 1, Berlin Germany

• 1996 - COP 2, Geneva, Swiss

• 1997 - COP 3, The Kyoto Protocol on Climate Change, Kyoto, Japan

• 1998 - COP 4, Buenos Aires

• 1999 - COP 5, Bonn, Germany

• 2000 - COP 6, The Hague, NL

• 2001 - COP 7, Marrakech, Morocco

• 2002 - COP 8, New Delhi, India

• 2003 - COP 9, Milan, Italy

• 2004 - COP 10, Buenos Aires, Argentina

• 2005 - COP 11/CMP1 (COP serves as the Meeting of the Parties) , Montreal, Canada

• 2006 - COP 12/CMP 2, Nairobi, Kenya

• 2007 - COP 13/CMP 3, Bali, Indonesia

• 2008 - COP 14/CMP 4, Poznań, Poland

• 2009 – COP 15/CMP 5, Copenhagen, Denmark

• 2010 – COP 16/CMP 6, Cancun Mexico

The Kyoto Protocol, 1997

• Open for signature in 1997 and came into force in 2005

• The developed countries agreed to specific targets for cutting their emissions of greenhouse gases – The Intergovernmental Panel on Climate Changes’ report in

1990: a 60% reduction in emissions was needed;

– The US position: just stabilize emissions and not cut them at all;

– The European Union: called for a 15% cut;

– Many industries such as oil and coal had a huge campaign to discredit the conference, and claimed that it will hurt the global (or USA's) economy and affect people's jobs.

• The final trade off - developed countries were committed to an overall reduction of GHG emissions to 5.2% below 1990 levels for the period 2008 – 2012.

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The Kyoto Protocol, 1997

• It is a legally binding agreement, with 192 signatories by December 2009;

• National targets: EU 8%, US 7%, Japan & Canada 6%

• US was the only major player that did not sign it– President Jr G.W. Bush in 2001: because China and India

were not committed to specific targets

• The principles for target-setting in Kyoto-Protocol– The common but differentiated responsibilities; and,

– The specific development priorities, objectives and circumstances of the parties involved.

• The tools under the Kyoto-Protocol: – Emissions trading, CDM, and Joint implementation

The Kyoto Protocol, 1997

• As of December 2009, 192 parties have ratified the Kyoto Protocol

Source: http://earthtrends.wri.org/updates/node/105, the data on the maps by 2006.

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Political Compromise in Bali

• The UN Intergovernmental Panel on Climate Change (IPCC): three recommendations, 2007 – To stabilize GHGs at safe levels throughout this century,

worldwide emissions need to peak by 2015;

– Developed nations

o Need to cut emissions 25-40% by 2020 & by 80-90% by 2050 from 1990 levels;

o Should set specific reduction targets;

– Developing nations

o Cannot continue business as usual;

o Should take nationally appropriate mitigating actions in a measurable, reportable & verifiable manner.

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Tasks for Copenhagen, 2009

• To reach a binding agreement replacing the Kyoto Protocol - but was unsuccessful

• The IPCC: – The rich needs to cut 25%-40%, and the poor 15%-30% by

2020; otherwise by 2100, the global degree will be 4-6.4°C higher than that of 2000;

• The Copenhagen Communiqué:– The rich: should take CO2 reduction commitments that are

much higher than the global average;

– The poor: make CO2 reduction plans in line with their common by differentiated responsibilities and capabilities:

o Advanced developing nations: low-carbon commitments by 2020;

o Least developed economies: additional assistance.

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Key Issues under Disputes

• Common and different responsibilities– Still a valid principle?

– What should be used as a benchmark?

• The carbon emissions reduction target (CERT)– More nations have made pledge on specific targets;

– But, are they sufficient and how to ensure implementation?

• The financial cost: who should bear it?– UNFCCC has suggested that the annual could be about $70bn

or $100bn (£44bn and £63bn) by 2030;

– Prof Martin Parry, the lead author of the report, Assessing the Cost of Adaptation to Climate Change: “these numbers are underestimates”, and the cost will be £190bn (The Independent, 28 Aug 2009)

China’s Position on Climate Change

China’s GDP Growth 1952-2005

http://www.zaksinvest.com/notes/China_Economy-vs-Markets.html

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Problems with China'sEconomic Development Strategy

• Economic development had been taken as top priority

– 9.7% annual growth rate in average since 1979

– Began to slow down recently: 9.6% in the third quarter 2010 from a year earlier – down from 11.9% in Q1 and 10.3% in Q2

– 25 Oct 10: Bluebook of Nation competitiveness, NI Pengfei,

o China’s GDP = No. 2 yet its competitiveness = No. 17

o Due to its low economic efficiency (No. 56) and structure (No. 89)

• The cost of the rapid growth: energy shortage & environmental damage

– Energy consumption 5.2% annually (1979 – present)

– Energy consumption per GDP growth rate 4.6%

– GHG annual growth rate 4% (1994-2004) & CO2 emissions: 76%>83%

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China’s CO2 Emissions

• The U.S. Oak Ridge National Laboratory – China became the world’s No.1 CO2 emitter in 2007 = 1.8 bts (1.6bts by US)

• Steven Chu, U.S. Secretary of Energy – If China fails to use more renewable sources, the "amount of

carbon China emits in the next 30 years will equal all the carbon the U.S. has emitted in the life of the country“;

• WAN Gang: Minister of Science and Technology (China)– China’s carbon emissions will peak between 2030 and 2040

• QI Jianguo: Director, Centre of Circular Economy & Environmental Evaluation & Forecast, CASS– China's GDP will double by 2020 and its GHG emissions will

accordingly increase by 100 per cent.

– The target for cutting CO2 emissions means that GHG 10 yrs from now will "be only a small increase" from the current level.

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China’ position on climate change

• Signed the Kyoto Protocol in 1998 but was not required to undertake specific targets

• Having taken new measures but being explicit for not ready to undertake specific targets in the post-Kyoto era– Concerns about economic development

– Responsibility: the industrialised nations had a long history of industrialization & massive use of energy

– Rights for development: low per capita emission in China

• But being keen on international cooperation– Having set up specific targets domestically

– Working with int’l organizations and other countries

– Interested in technology transfer from Western countries

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A Brief Comparison between EU, China & the US,

EU-27 China USA

Population 495mln (7%) 1.32bn (20%) 304mln (4.6%)

GDP $16.8 tn (30%) $4.91 tn (5.7%) $13.8 tn (24%)

GDP (PPP) p/c $ 28,213 $6,600 (130th) $46,300

Oil consumption 8,188 kbp/d* 7,201 kbp/d 20,687 kbp/d

CO2 emissions (by 2007)

605mts * 6,538 mts (22.3%) 5,838 mts (19.91%)

CO2 E p/c (2004) 2.28 1.02 5.61

* The figures only cover the 4 EU states: Germany, France, UK and Italy.

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Energy Mix: China vs U.S.A, 2009

Coal 70%

Oil19%

Gas4%

Hydro6%

Nuclear1%

The US energy mix is featured by a High ratio of oil consumption, and fossil fuel is in dominance for its power generation (71%)

Coal 23%

Oil38%

Gas27%

Hydro3%

Nuclear9%

China’s energy mix is dominated by coal, whose CO2 per unit calorific value is 36% and 61% higher than oil & gas

The world average primary energy mix: Oil 35% + Gas 24% + Coal 29% + other

Source: Adapted from the BP Statistical Review of World Energy, June 2010.

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Emissions: China vs the US

Source: FT Energy Source, 9 Dec 2009.

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Key Emission Sources: China vs the US

Source: FT Energy Source, 9 Dec 2009.

China’s New Energy Policy Initiatives

• The Medium- and Long-Term Plans for Science & Technology Development (Feb 06)

– 1st Stage (2006-20): E conservation, optimization of industry structure and E efficiency

– 2nd Stage (2021-35): nuclear share>16%, enhancing renewable & introduction of hydrogen

– 3rd Stage (2036-50): reducing the coal share <50%, nuclear + renewable > 30%

• The “1000 enterprises” in energy intensive sectors: – Steel & non-ferrous, Coal production, power generation,

petroleum & petrochemical, building materials, textile & paper

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China’s Five-Year Plans

• The National 11th Five-Year Plan (Oct 2006)

– 7.5% of average annual GDP growth

– 20% reduction of energy intensity of GDP

– 10% reduction of pollutant emission

– 15% renewable energy by 2020

• The National 12th Five-Year Plan (Oct 2010)

– 8% or less of annual GDP growth

– 15-20 % reduction of energy intensity of GDP

– 40-45% reduction in CO2 emissions by 2020

– 15% renewable energy by 2020

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China’s New Pledge in 2009

• On 26 Nov 2009, Chinese government announcement– To cut intensity of CO2 emissions per unit of GDP by 40% to

45% from 2005 levels by 2020;

• SU Wei, head of NDRC Climate Change Bureau,– China’s CO2 emissions will not grow endlessly, and we will

not insist on equal CO2 emissions per capita with other nations. Otherwise, the earth will be ruined by us (Aug 09);

– But CN will not accept the three “-ables” request (June 10).

• Fatih Birol, IEA chief economist: – The target means that China will bear more than 1/4 of global

emissions reduction, with an estimated cost of $400bn by 2020.

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Likely Cost of China’s New Pledge

• Prof ZOU Ji, Renmin University

– Cutting CO2 by 30% is the benchmark based on current technologies;

– If CO2 cut →45%, additional cost = $30bn in the next 10 years

– If CO2 cut →50%, additional cost = $86bn /year

• Prof HE Jiankun, Tsinghua University– To reach the 2-degree goal, the advanced nations have to cut

CO2 by 80%, as their emissions per capita is 253 tons;

– The developing nations’ CO2 emissions p/c is only 82 tons, further cut will constraint their development severely;

– Accumulative GHG emissions p/c: 1850-2050 • The Rich = 1206 tons;

• The Poor = 330 tons.

The Pledge by Other BRICS Nations

• Brazil: by president Luiz da Silva pledged on 13 Nov 09:

– To cut CO2 by 50% below 1990 levels by 2050;

– To cut 36 -39% of CO2 by 2020, by slowing deforestation in the vast Amazon region.

• Russia: by President Medvedev on 18 Nov 09:

– To reduce GHGs by 22-25% by 2020 from 1990 levels.

– The previous target was 10-15%

• India: announced on 3 Dec 09:

– 20-25% reduction of carbon intensity by 2020 from 2005 levels, but not legally binding obligations.

UN Climate Change Conference: 4 - 9 October 2010 in Tianjin, China

Tianjin Meijiang Convention and Exhibition Center (MJCEC)

Related meetings at MJCED:

• Meeting of the Least Developed Countries: 28-29 September, 2010

• Meeting of the Small Island Developing States: 30 September - 1 October, 2010

• Meeting of the African Group: 30 September - 1 October, 2010

• Meeting of the G-77 and China: 2-3 October, 2010

The delegates in frog dressing at the Tianjin UN Climate Change Conference

• The talks involved 177 nations • But again ended with partial

progress: the rich and poor countries still divided over responsibilities for emissions cuts.

The Remaining Uncertainty

• John Ashe, Chairman of the Kyoto Protocol negotiating group, 9 Oct 2010– As of today, we are not yet close to making a final

decision on the second commitment period. There is still some work to be done on that.

– The developed countries all had their own worries on the problems of green-gas emissions reduction, capital and techniques.

– Some developed countries even hoped to abolish or amend the Protocol, saying developing countries should share the same responsibilities.

The Post-Kyoto Regime: what can be done?

• The Tianjin climate change conference was the first that being held by the Chinese government; yet little progress has been obtained.

• This has raised more doubts about the upcoming Cancun climate convention

• 2010 – COP 16/MOP 6, Conference of the Parties to the UN Framework Convention on Climate Change,

– To be held between 29 Nov – 10 December 2010, in Cancun, Mexico;

– What can be done?

China and the Post-Kyoto Climate Change Regime

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How to Find A “Fair” Solution?

• How should we define the term “fairness”?– Level of development: overall GDP or GDP p/c?

– Amount of emission: total or p/c?

– Economics vs responsibility

• Prof Bard Harstad, Northwestern University: – To encourage participation in a climate agreement:

• Conditional development aid to the poorest;

– Compliance: • Kyoto requires non-compliers to repay their carbon debt in the

next commitment period at 30% interest but ineffective; • trade barriers & border taxes could be more credible;

– Stimulating the development of new technologies

How to Find A “Fair” Solution?

• Thomas Scheling: 2007 Two kinds of architectures

– The “true” architecture • To design complete integral/whole systems, leaving

nothing out, which can all fit together economically & even aesthetically;

• BUT if part of the system fails, the rest may fail with it.

– The “looser architecture”• A set of substantially independent principles, which

can stand alone individually

• Separability: if one fails it does not collapse a structure;

Thomas Scheling (continued)

• Three missing elements in the holistic system– How the quotas may be agreed;

– How will agreement be achieved at on what the overall target should be; and,

– What cost should be accepted as bearable and on what aspects: imposing taxes vs imposing quantitative limits

• The key elements missing in the “looser” architecture– The R & D of mitigation technologies: a “centerpiece” of the

global climate regime?

– A GHG regime should be universal or discriminative among nations – LDNs vs BRICS vs Developed

• The climate change regime is unprecedented– Nothing is “enforceable” , thus focusing on “commitments” ?

The Cancun Climate Convention

• COP 16, 29 Nov–10 Dec 2010, Cancun, Mexico• The main task: to reach a “legally binding” agreement

that links with the “Green Fund” and Carbon pricing in the countries that receive the funds

• The “Green Fund” – was proposed in 2008 by Amb. Juan Manuel Gomez Robledo– objectives– To expand the scale of global mitigation efforts and

enable the participation of all countries– To support adaptation activities– To promote technology transfer and diffusion– To underpin, financially, the new climate change regime

How would the “Green Fund” work?

• Contribution:– By all countries against the principle of common but

differentiated responsibilities;

– Should be agreed multilaterally and be determined by criteria, such as: GHG emissions, Population, and GDP

• Allocation– All countries could benefit from the Fund;

– Mitigation activities to be supported should yield real, measurable, reportable and verifiable mitigation results.

• Operation– The Fund would operate under an inclusive and transparent

governance regime and will depend on an Executive Council, constituted by all participant countries.

• The Problem: does GDP/pc matter?

The Cancun Climate Convention

• The World Energy Policy Center: the climate game is a multi-player prisoners' dilemma.

• That makes cooperation unlikely without:– Inducements to cooperate: penalties and rewards

– High benefits and low costs of cooperation

– Simple, low-conflict parameters to negotiate: flexible Global Carbon Pricing: A uniform global carbon price solves the problem of carbon-intensive exports; those who remain outside the system or cheat can be penalized with trade sanctions.

– The widely held perception on fairness

• A Green Fund should be used to solve half of the "legally binding" problem.

China and the Post-Kyoto Climate Change Regime

• China needs to take more responsibilities in climate change while continuing its economic development The 30 years of unsustainable economic development has made

it a major actor responsible for the climate change; By 2050 CN will have no excuse to escape the blame even from

the historical perspective; China should undertake binding commitments in post-Kyoto

climate regime in order• To join the world’s leading group in tackling the climate change;

• To stand on equal foot with the developed nations and seeking their cooperation;

• To set a good example for other emerging powers; and,

• To facilitate implementation of its domestic targets

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The End

Thank You Very Much

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