As Chinese President Hu Jintao and President Obama prepare to meet in Washington next week, economic and security issues have been receiving the most attention in recent press. However, the visit also presents an opportunity to discuss climate and energy issues, which have long represented areas for cooperation between the two nations, even amid tensions over other issues. We asked several experts from the ChinaFAQs network to provide their views on what they would like to see result from this summit:
Assistant Professor, Geography & Environment, Boston University
Joint Research Fellow, Ash Center and Belfer Center, Harvard Kennedy School
Any political goals to be accomplished through Chinese President Hu Jintao’s US visit next week are likely to be complicated by several powerful factors, however the US-China energy relationship remains an area in which significant economic and diplomatic progress can be achieved. Those among us hoping for major steps forward on North Korea, currency, and military relations should not hold our breath during this visit. For others hoping for incremental yet long-term steps to address one of the central areas of mutual gain in the relationship, evidence of momentum continues to mount. President Hu could be able to capitalize on such momentum through key meetings this visit and deliver concrete results. In particular, the creation of a public (or public-private) energy clearinghouse between the US and China would address a specific failure in current energy innovation networks between the countries, and provide an institutional mechanism through which current gains in energy cooperation can be amplified.
Structurally, and perhaps most importantly, President Hu’s planned departure from Party leadership in 2012 has already resulted in the inevitable shift of focus away from continued meaningful political progress in US-China relations under his watch. Such focus has turned toward anticipation of what changes the Xi Jinping era will bring. The seemingly muted goals of this trip from the Chinese perspective reflect such reticence to further major outstanding issues and instead privilege management of the status quo during Hu’s final year. Economically, China’s rapid fourth quarter rise in foreign exchange reserves has set an even more combative tone in Washington that will fuel pressures to place the issue of currency manipulation squarely in the center of discussions. Politically, the perceived timing of the Chinese J-20 stealth fighter launch during the visit of US Secretary of Defense Robert Gates to China has only fueled further suspicion of China’s long-term intentions in the region.
In contrast, deepening energy relations – particularly in support of major corporate partnerships – remains a central focus of recent US-China interaction. Despite the flare-up that the United Steelworkers petition to USTR has generated, the raft of energy delegations planned through the US-China Energy Cooperation Program in the first quarter of this year is just one example of how momentum is building to support trade and confidence building in this critical sector. However, while major US companies enjoy sufficient resources to launch agreements with Chinese partners, much of the US innovation in energy technology and industrial capacity is occurring at the small- and medium-sized company level. Moreover, it is often at the pre- or near-commercial phase that these US firms are most willing to co-develop with Chinese partners. Such interest has only grown given the current weak US investment climate and lack of US policies supporting the demonstration and deployment of new energy technology applications. While innovative, these smaller US firms do not have the capacity and in-house knowledge to identify potential Chinese partners. Significant information gaps therefore exist, leading to gaps in adequate financing channels between these two groups.
A concrete and meaningful result of this January trip would be a commitment to create a public or private energy clearinghouse that could close these crucial gaps. US firms often feel at a disadvantage vis-à-vis their Chinese competitors, arguing that the Chinese government is aiding Chinese firms by providing such subsidized financing, land, and the capacity to identify foreign acquisition/JV targets. An energy clearinghouse between the US and China that provided such capacity would link smaller innovative firms in the US with financial and energy firms in China, small and large, but would also serve to temper some of the political rhetoric around one-sided government support. The clearinghouse could provide channeled solutions for the expansion or commercialization of various technologies in areas already highlighted by the USCERC, and provide the medium-term support that such collaborations require. There have been discussions addressing this need and successful precedents in part exist, such as the China Coalbed Methane Clearinghouse, which was established through an EPA/SEPA partnership and is managed by the China Coal Information Institute.
A concerted effort to establish such a clearinghouse function across energy technologies would provide the long-term institutional capacity to ensure that this January trip does not simply result in a few more signed energy agreements. Rather, the trip has the potential to serve as a capstone of the momentum created by USCERC and other related endeavors, and could result in sustained partnerships that are bottom-up between innovative companies in clean energy clusters of the US and China. Such an agreement would enable discrete progress in addressing a key long-term challenge faced by the US and China, and would bridge the current gap between what promises to be a lengthy list of global concerns on the US side and the seemingly muted expectations and goals of the Chinese delegation.
Kelly Sims Gallagher
Associate Professor of Energy and Environmental Policy, Tufts University
"Obama-Hu Decide to Jointly Reduce Pollution From Coal to Boost Energy Security." This should be the headline from the upcoming Presidential Summit. Because the United States and China are the two largest energy consumers in the world, they share a strong interest in energy security. Both countries also rely heavily on coal because of large domestic coal reserves, but unrestrained exploitation of these resources would cause unacceptable climate disruption.
Thus, the two countries should jointly support early demonstration of advanced coal technologies that greatly reduce emissions of air pollutants and greenhouse gas emissions. In so doing, the countries would share costs, reduce financial risk, and gain valuable knowledge about how advanced coal and carbon capture and storage technologies work, in various contexts. The projects would be international public-private partnerships with each government only supporting its own firms and researchers, but sharing information. Such collaboration would benefit U.S. firms because they would gain experience in the Chinese market and expose the Chinese to U.S. technology and practices, while obtaining the opportunity for greater learning about the technologies themselves through learning-by-doing.
President, Robert A. Kapp & Associates, Inc.
Former President, U.S.-China Business Council 1994-2004
First, the two leaders should make a deliberate and specific effort to deal with the problem of evaporating strategic trust between the US and China, whether by reinvigorating the "Strategic and Economic Dialogue" that is already on the books, or by creating a separate mechanism focused specifically on the problem of rising suspicion as to each country's motives in virtually every sector from the military to the economic to the cultural. The downward spiral in the psychology of US-China relations needs to be acknowledged, arrested, and reversed.
Second, the two leaders should reach undertakings that signify to the world that the US and China understand their unique roles in the preservation of life on earth in the face of environmental degradation and climate change. For different reasons, the problem here is whether either government -- and especially the US government -- is currently able to "deliver" on any programmatic or financial commitments that its President might wish to make.
Third, in the economic and trade sector, the two leaders should re-emphasize their shared understanding of the need for "rebalancing" of each country's economy; place emphasis on the economic benefits to both countries of the vast US-China engagement now underway; commit to increased attention to facilitating two-way investment flows, and press ahead in efforts to create truly win-win business relationships in the areas of clean energy, environmental protection, and environmentally-related technical cooperation.
Fourth, "people to people" engagement is more important than generally recognized, and the two Presidents should be prepared to expand it. This should include enhanced media and journalistic opportunities in both countries, expanded programs of language and cultural studies in high schools and colleges, and enlarged opportunities for exchanges in the arts -- music, drama, the visual arts, and literature -- not only in each country's "cultural centers" but more broadly across the face of each nation.
Given that President Hu is nearing the end of his ten-year term of office as China's president, and that President Obama now faces the aftermath of significant mid-term election losses for his party in the Congress, there may be a tendency to seek the "lowest common denominator" in any joint statement concluding the Hu visit. The challenges facing the US-China relationship, however, are significant and deepening. We may hope for a more dynamic, results-oriented set of understandings arising from this important meeting, and for a clear bilateral demonstration of civility and mutual respect as a message to the citizens of both nations.
Senior Vice President, the Energy Foundation*
Director, China Sustainable Energy Program
*The Energy Foundation provides support for ChinaFAQs
China and the United States Must Join Hands in Moving Toward a Low-Carbon Future
One of the best outcomes of President Hu’s visit to the U.S. would be to make Sino-U.S. collaboration on energy, environment, and climate change a cornerstone of the strategic relationship between the two countries in the 21st century. The Clean Energy Research Center established by the U.S. and China is an important step in re-energizing our cooperative work on energy issues and addressing the critical long-term technological challenges for a clean energy future. We are proud to be part of this partnership.
We can imagine that the U.S. and China take joint action to enhance our energy security and reduce oil dependency while boosting our economies and the development of clean energy technologies. For example, as the world’s two largest markets for automobiles, a commitment to make all of our cars super-efficient—reaching 50 mpg by 2020-25—would substantially reduce our oil consumption and import. We can re-invest the savings in our own economies.
We can also imagine the U.S. and China embracing renewable energy technologies so that by 2025 renewable sources supply at least 25 percent of electricity use in both countries. This kind of commitment would create a gigantic market worth trillions of dollars for clean energy technologies. That in turn would send a powerful signal to investors and innovators around the world to develop and invest in the cleanest energy technologies in our two countries, which will create local jobs and drive our future economy. In fact, these ideas already enjoy strong support in both countries.
It is time that we take joint action to move decisively toward a low-carbon future and build a robust clean energy economy both in China and the U.S.
Associate Professor of Environmental Science, University of San Francisco
One important thing to understand about climate and energy action in the US and China, is that China is looking ahead and acting for the future, recognizing the dramatic shifts already happening. The US would do well to help itself by supporting innovation and resource conservation -- values and skills upon which the country was founded. We have clean technology and investors standing by; we have people ready to shift toward healthy, local communities. What's needed is the political support and policy consistency to let a clean and lean economy flourish. We're putting ourselves behind, not China.
In terms of the Obama-Hu visit, both leaders can strengthen US-China relations by highlighting collaborative efforts on eco-cities, low-energy buildings, industrial efficiency, and renewable energy. With multi-year commitments for collaboration and funding, investors can have the surety they need to proceed. Both leaders can encourage domestic actions by noting the progress in each other’s countries. China is devoting increasing funds to public transit (including high-speed rail), thereby lessening dependence on oil-based, energy-intensive air and automobile transport. US governors, take note. Key US states are issuing public greenhouse gas inventories and implementing emission reductions, attracting jobs and investment in a climate-friendly economy. China is devoting more attention to infrastructure for renewable electricity, directing money toward the so-called “smart grid.” Even more importantly, China is putting greater resources into education. As one professor from Tsinghua University (sometimes called the MIT of China) noted at a conference on eco-cities: what we need even more than smart grids, are smart people.
Deputy Director of the Energy and National Security Program, Center for Strategic & International Studies
Both the United and China face the daunting task of transforming their energy systems to deal with the economic, security and environmental risks of continued primary reliance on fossil fuels. At their upcoming summit President Obama and President Hu Jintao have an opportunity to reiterate and reinforce their commitment to address these global issues of energy security and climate change. Because the United States and China represent nearly 40% of total world energy consumption, this shared commitment is critical in the global effort to provide a more secure and cleaner energy future. Without meaningful efforts by these two countries the global effort will fail.
The transformation of the energy infrastructure will require concerted efforts to introduce a wide array of new and advanced technologies to both improve the efficiency of energy consumption, expand the production of energy by non-fossil fuel energy sources, including renewables and nuclear, and to begin to capture and sequester the carbon emitted by the burning of fossil fuels. Driving the transformation fast enough to have a chance to avoid the economic, security and environmental risks requires government action in the form of increased funding of research and development, new regulations and subsidies (incentives)to accelerate the deployment of clean energy as well as to achieve large enough market scale to reduce their costs. Both countries have made major commitments to this transformation but real and lasting progress requires continued effort.
To demonstrate their commitment to leading their countries to a more sustainable energy future Presidents Obama and Hu should:
- Make a clear statement that they understand the importance of this transformation and that they intend to continue their domestic efforts;
- Commit to closer and more intensive collaboration between the two countries to accelerate the development and deployment of clean energy technologies;
- Commit to work together to assure that adequate supplies of conventional energy will be available during the transition to a lower carbon future;
- Agree that open markets are critical to creating the necessary scale for the deployment of new clean energy technologies and the need to avoid incentive policies that inhibit global trade and investment flows.
- Pledge to work together within the variety of international fora,(including the G20, APEC, WTO, IEA, MEF, World Bank) working to create the policy, financial, technology and trade framework necessary to accelerate the creation of a sustainable energy system.
Principal Advisor, China Climate and Energy Program, World Resources Institute
Presidents Obama and Hu lead the world’s two largest economies, each of which has large energy markets, world-class companies, top creative minds and research institutions and innovative policymakers. It would be great to see these two leaders embrace collaboration and competition as equally positive forces in advancing a new energy economy. Companies must compete with each other, but they can also form alliances, engage in joint research and build on each other’s strengths. Researchers share information, data and results in the open field of academic discourse, but they also compete for prizes, grants and recognition. Governments create environments for innovation that foster their own companies and researchers, but also promote excellence around the world.
The United States has more than sixty years’ experience in furthering the idea that a more prosperous world with many successful nations is best for Americans’ long-term prosperity. As Europe and Japan grew wealthier in the 1950s and 1960s Americans benefited from new opportunities and innovations. Similar promise now beckons as the major developing countries -- China, India, Brazil and others -- have entered their period of rapid growth.
The Clean Energy Research Centers (CERCs) are a concrete example of how government, business and research centers can work together even as the businesses also compete in the global market. The power of this new model of simultaneous collaboration and competition is demonstrated by the number of new business deals we are likely to see during this upcoming visit. We need to reject the simplistic idea of a zero sum game, dominated by trade disputes that are either “won” or “lost.” Instead, Presidents Obama and Hu should lead the way in finding ways to ensure that healthy competition supports clean energy development in both countries.
Associate Professor of Energy, Environmental Policy and Law, University of Minnesota
In my dream world, the Summit between President Hu and President Obama will be the first step in a series of bold bilateral actions that help both China and the US transform our energy systems to dramatically reduce greenhouse gas emissions. These actions would range from joint efforts to stimulate low-carbon technology development and deploy renewable energy technologies worldwide and be accompanied by overarching agreements to begin reducing GHG emissions now.
But when I take off my rose-colored glasses of hope, I find myself in a much more pessimistic state. The advantage of this frame of mind is that anything remotely positive coming from the meeting will seem like good news, the disadvantage is that I fear nothing meaningful will address the large and important issues facing us all.
My family and I returned from a year at Tsinghua University in Beijing, where a McKnight Land Grant Professorship allowed me to study and work in China. It was a fascinating year, and I gained a new appreciation for the challenges and opportunities facing China, and U.S.-China cooperation on energy and climate issues. We found the pace of change in Beijing dizzying—50 kilometers of new metro line a year being constructed for the next 5 years, and a new high-speed rail network slashing travel times between major cities are just two examples.
Since our re-entry in August, while I have a new appreciation for the successes of the Clean Air Act, I find myself discouraged by the lack of any energy and climate policy in the U.S. and troubled by the recent framing of China during the 2010 elections. In light of our continuing economic woes, the elections and heightened political rhetoric seem to cast cooperation with China—on energy, climate or other issues—in an exceedingly negative light. I worry that the immediate and opportunistic political noise will overpower the ability to consider the important long-term issues.
Our year abroad drove home the interdependent present and intertwined futures of the US and China. In the long-term, the prosperity of both nations will depend on our ability to cooperate as well as to compete, but the possibility of short-term political calculations derailing meaningful long-term commitments seems likely. I only hope that President Hu and President Obama will be guided by our fundamental common interests and that this leadership will help us all focus on what is really at stake.
China Country Director, World Resources Institute
Professor of Environmental Economics and Management, Renmin University
We have seen progress in reaching two agreements in Cancun for global collective action to protect the climate; however, compared to the need for mitigation of and adaption to climate change they are still somewhat soft and less than adequate. In China, we are concerned about the difficulty the US Congress has in passing a bill on clean energy and climate. This is not only important for the United States itself, but it is also crucial for ensuring the United States is playing a meaningful role and supporting the multilateral process. We are also concerned about the European Union’s coordination challenges, given the financial crisis and enlargement. Moreover, there is concern about Japan, because of its negative statement on the Kyoto Protocol right before Cancun. Given this international situation, I would expect slow progress and soft commitments in international climate change negotiations. It is critical that dialogue and negotiation continue, be based on a mutual understanding that international collective action is needed to address global climate change, and that the two Presidents assure each other of their ongoing commitment to the process.
American readers may be aware that China is changing: The Chinese negotiating team is now more flexible and open in international negotiations with its willingness to agree to new provisions for measurement, reporting and verification (MRV). China is also making clear progress in implementing its commitments, including its target of reducing carbon emissions intensity by 40~45% by 2020, compared with the level in 2005, as well as its renewables, nuclear and forest targets. The upcoming 12th Five Year Plan will set in place clear 2015 implementation milestones for these targets. There is political will to implement these targets, as they are consistent with China’s development strategy to shift to a more sustainable development pathway by economic restructuring and efficiency improvement. Chinese increasingly recognize that greenhouse gas (GHG) emissions control should be part of its development strategy, which can create not only environmental benefits, but also a development bonus in terms of job and investment opportunities and improved energy security. China’s domestic efforts are becoming a positive force for responding to the global climate change challenge, and I hope this can contribute to encouraging cooperation between major economies and stakeholders from the rest of the world in international climate protection.
Undoubtedly there will be some political, economic, financial, and technological obstacles ahead to overcome. These will require that the United States, China and other countries share experience and lessons learned. Continuous dialogue, communication, and cooperation between nations, as well as bottom-up practices/initiatives by academia, business, and NGOs act as important complements and support to the more formal international climate process. The United States and China have chosen to make climate a strategic area for cooperation, and climate cooperation, rather than conflict, should be one of the focal areas of the two Presidents’ discussions.
Photo by Simon
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