tag:theconversation.com,2011:/au/topics/us-china-climate-13546/articlesUS-China climate – The Conversation2020-10-08T04:48:36Ztag:theconversation.com,2011:article/1472682020-10-08T04:48:36Z2020-10-08T04:48:36ZChina just stunned the world with its step-up on climate action – and the implications for Australia may be huge<figure><img src="https://images.theconversation.com/files/362346/original/file-20201008-24-ynhm4p.jpg?ixlib=rb-1.1.0&rect=12%2C0%2C4088%2C2735&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">
</span> <span class="attribution"><span class="source">Lukas Coch/AAP</span></span></figcaption></figure><p>China’s President Xi Jinping surprised the global community recently by committing his country to net-zero emissions by 2060. Prior to <a href="https://news.cgtn.com/news/2020-09-23/Full-text-Xi-Jinping-s-speech-at-General-Debate-of-UNGA-U07X2dn8Ag/index.html">this announcement</a>, the prospect of becoming “carbon neutral” barely rated a mention in China’s national policies. </p>
<p>China currently accounts for about <a href="https://www.bp.com/content/dam/bp/business-sites/en/global/corporate/pdfs/energy-economics/statistical-review/bp-stats-review-2020-co2-emissions.pdf">28% of global carbon emissions</a> – double the US contribution and three times the European Union’s. Meeting the pledge will demand a deep transition of not just China’s energy system, but its entire economy. </p>
<p>Importantly, China’s use of coal, oil and gas must be slashed, and its industrial production stripped of emissions. This will affect demand for Australia’s exports in coming decades.</p>
<p>It remains to be seen whether China’s climate promise is genuine, or simply a ploy to win international favour. But it puts pressure on many other nations – not least Australia – to follow.</p>
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<img alt="A man walking against an industrial skyline" src="https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&rect=4%2C13%2C2991%2C1971&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362341/original/file-20201008-24-1ibkk3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">It remains to be seen whether China will deliver on its climate pledge.</span>
<span class="attribution"><span class="source">Da qing/AP</span></span>
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<h2>Goodbye, fossil fuels</h2>
<p>Coal is currently used to generate <a href="https://ieefa.org/coals-share-of-china-electricity-generation-dropped-below-60-in-2018/">about 60%</a> of China’s electricity. Coal must be phased out for China to meet its climate target, unless technologies such as carbon-capture and storage become commercially viable.</p>
<p>Natural gas is <a href="https://chineseclimatepolicy.energypolicy.columbia.edu/en/natural-gas">increasingly used</a> in China for heating and transport, as an alternative to coal and petrol. To achieve carbon neutrality, China must dramatically reduce its gas use. </p>
<p>Electric vehicles and hydrogen fuel-cell vehicles must also come to dominate road transport - currently they account for <a href="http://www.xinhuanet.com/fortune/2020-01/08/c_1125433202.htm">less than 2%</a> of the total fleet.</p>
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<p>China must also slash the production of carbon-intensive steel, cement and chemicals, unless they can be powered by renewable electricity or zero-emissions hydrogen. One <a href="https://www.energy-transitions.org/publications/china-2050-a-fully-developed-rich-zero-carbon-economy/">report</a> suggests meeting the target will mean most of China’s steel is produced using recycled steel, in a process powered by renewable electricity.</p>
<p><a href="https://www.energy-transitions.org/publications/china-2050-a-fully-developed-rich-zero-carbon-economy/">Modelling</a> in that report suggests China’s use of iron ore – and the coking coal required to process it into steel – will decrease by 75%. The implications for Australia’s mining industry would be huge; around <a href="https://minerals.org.au/minerals/ironore">80%</a> of our iron ore is exported to China. </p>
<p>It is critically important for Australian industries and policymakers to assess the seriousness of China’s pledge and the likelihood it will be delivered. Investment plans for large mining projects should then be reconsidered accordingly. </p>
<p>Conversely, China’s path towards a carbon neutral economy may open up new export opportunities for Australia, such as “green” hydrogen. </p>
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<img alt="A bust road in China" src="https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362342/original/file-20201008-18-pxn6wu.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">To meet its pledge, China must decarbonise its transport system.</span>
<span class="attribution"><span class="source">DIEGO AZUBEL/EPA</span></span>
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<h2>A renewables revolution</h2>
<p>Solar and wind currently account for <a href="https://www.bp.com/en/global/corporate/energy-economics/statistical-review-of-world-energy.html">10% of China’s total power generation</a>. For China to meet the net-zero goal, renewable energy generation would have to ramp up dramatically. This is needed for two reasons: to replace the lost coal-fired power capacity, and to provide the larger electricity needs of transport and heavy industry.</p>
<p>Two factors are likely to reduce energy demand in China in coming years. First, energy efficiency in the building, transport and manufacturing sectors is likely to improve. Second, the economy is moving <a href="https://apjjf.org/2018/10/Tan.html">away</a> from energy- and pollution-intensive production, towards an economy based on services and digital technologies.</p>
<p>It’s in China’s interests to take greater action on climate change. Developing renewable energy helps China build new “green” export industries, secure its energy supplies and improve air and water quality. </p>
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<img alt="A solar array in China" src="https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362345/original/file-20201008-22-yy2fxt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">A transition to renewable energy would improve air pollution in China.</span>
<span class="attribution"><span class="source">Sam McNeil/AP</span></span>
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<h2>The global picture</h2>
<p>It’s worth considering what factors may have motivated China’s announcement, beyond the desire to do good for the climate.</p>
<p>In recent years, China has been viewed with increasing hostility on the world stage, especially by Western nations. Some <a href="https://www.japantimes.co.jp/news/2020/09/23/asia-pacific/china-carbon-neutral-2060/">commentators</a> have suggested China’s climate pledge is a bid to improve its global image. </p>
<p>The pledge also gives China the high ground over a major antagonist, the US, which under President Donald Trump has walked away from its international obligations on climate action. China’s pledge follows similar ones by the European Union, New Zealand, California and others. It sets an example for other developing nations to follow, and puts pressure on Australia to do the same.</p>
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<p>The European Union has also been <a href="https://www.euractiv.com/section/energy/news/europe-urges-china-to-match-its-climate-ambitions/">urging China</a> to take stronger climate action. The fact Xi made the net-zero pledge at a United Nations meeting suggests it was largely targeted at an international, rather than Chinese, audience.</p>
<p>However, the international community will judge China’s pledge on how quickly it can implement specific, measurable short- and mid-term targets for net-zero emissions, and whether it has the policies in place to ensure the goal is delivered by 2060.</p>
<p>Much is resting on China’s next <a href="https://chinadialogue.net/en/climate/11434-the-14th-five-year-plan-what-ideas-are-on-the-table/">Five Year Plan</a> – a policy blueprint created every five years to steer the economy towards various priorities. The latest plan, covering 2021–25, is being developed. It will be examined closely for measures such as phasing out coal and more ambitious targets for renewables.</p>
<p>Also key is whether the recent <a href="https://www.carbonbrief.org/guest-post-why-chinas-co2-emissions-grew-4-during-first-half-of-2019">rebound</a> of China’s carbon emissions – following a fall from 2013 to 2016 – can be reversed. </p>
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<img alt="President Xi and President Trump" src="https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=355&fit=crop&dpr=1 600w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=355&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=355&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=446&fit=crop&dpr=1 754w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=446&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/362343/original/file-20201008-16-1mrrzeo.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=446&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
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<span class="caption">President Xi, left, has taken the high ground over the Trump-led US with its bold climate plan.</span>
<span class="attribution"><span class="source">AP</span></span>
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<h2>Wriggle room</h2>
<p>The 2060 commitment is bold, but China may look to leave itself wriggle room in several ways.</p>
<p>First, Xi declared in his speech that China will “aim to” achieve carbon neutrality, leaving open the option his nation may not meet the target.</p>
<p>Second, the Paris Agreement states that developed nations should provide financial <a href="https://unfccc.int/files/essential_background/convention/application/pdf/english_paris_agreement.pdf">resources and technological support</a> to help developing countries reduce their emissions. China may make its delivery of the pledge conditional on this support.</p>
<p>Third, China may seek to game the way carbon neutrality is measured – for example, by insisting it excludes carbon emissions “embodied” in imports and exports. This move is quite likely, given exports account for a <a href="https://www.sciencedirect.com/science/article/pii/S0140988316302432">significant share</a> of China’s total greenhouse gas emissions.</p>
<p>So for the time being, the world is holding its applause for China’s commitment to carbon neutrality. Like every nation, China will be judged not on its climate promises, but on its delivery. </p>
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<p class="fine-print"><em><span>Hao Tan receives funding from the Australia Research Council (ARC) Discovery Project 2019-2021. He previously received funding from the Academy of the Social Sciences in Australia, and funding from the Confucius Institute Headquarters under the "Understanding China Fellowship" in 2017. </span></em></p><p class="fine-print"><em><span>Elizabeth Thurbon currently receives funding from the Australian Research Council (ARC) and the Academy of Korean Studies. She has previously received funding from the Academy of Social Sciences in Australia and the Korea Foundation. She is an elected member of the Executive Council of the Society for the Advancement of Socio-Economics (SASE) and a Research Committee member and Board member of the Jubilee Australia Research Centre (JARC).</span></em></p><p class="fine-print"><em><span>John Mathews receives funding from the ARC for the study of the clean energy transition in East Asia. </span></em></p><p class="fine-print"><em><span>Sung-Young Kim receives funding from the Australia Research Council (ARC) and has previously received funding from the Academy of Korean Studies (AKS). He is Chair of the Organising Committee for the 2021 Australian Political Studies Association (APSA) Annual Conference and is Treasurer of the Korean Studies Association of Australasia (KSAA).</span></em></p>It remains to be seen whether China’s climate promise is genuine. But it puts pressure on many other nations – not least Australia – to follow.Hao Tan, Associate professor, University of NewcastleElizabeth Thurbon, Scientia Fellow and Associate Professor in International Relations / International Political Economy, UNSW SydneyJohn Mathews, Professor Emeritus, Macquarie Business School, Macquarie UniversitySung-Young Kim, Senior Lecturer in International Relations, Discipline of Politics & International Relations, Macquarie School of Social Sciences, Macquarie UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/687952016-11-21T07:33:24Z2016-11-21T07:33:24ZWill China lead on climate change as green technology booms?<p>The election of Donald Trump as president of the United States is <a href="https://theconversation.com/president-trump-could-kill-the-paris-agreement-but-climate-action-will-survive-68596">bad news for the global environment</a>. He has made it clear that he will not implement the steps required to meet the pledges to reduce emissions as part of the agreement reached in Paris at the end of 2015. </p>
<p>Paul Krugman reflects the mood among Americans who favour climate action in a <a href="http://www.nytimes.com/2016/11/11/opinion/thoughts-for-the-horrified.html?action=click&pgtype=Homepage&clickSource=story-heading&module=span-abc-region&region=span-abc-region&WT.nav=span-abc-region">recent editorial</a>:</p>
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<p>I particularly worry about climate change. We were at a crucial point, having just reached a global agreement on emissions and having a clear policy path toward moving America to a much greater reliance on renewable energy. Now it will probably fall apart, and the damage may well be irreversible.</p>
</blockquote>
<p>But, bad news is not the same as fatal news. And, it is less likely that global efforts to reduce emissions will “fall apart” than many believe. Here are some reasons why.</p>
<h2>China stays the course</h2>
<p>Let us begin with the world’s largest emitter, China, and consider China’s motivations for <a href="http://www.forbes.com/sites/jillbaker/2016/11/14/climate-expert-says-china-committed-to-battling-climate-change-even-if-the-u-s-drops-out-of-paris-accord/#9fface474404">continuing with emissions reductions</a>. </p>
<p>China has powerful incentives to reduce coal use due to local air pollution. As anyone who has recently visited almost any large city in China will tell you, the air quality is frequently <a href="http://www.scmp.com/topics/beijing-air-pollution">abysmal</a> and constitutes a serious <a href="http://journals.plos.org/plosone/article?id=10.1371/journal.pone.0135749">health</a>, <a href="http://dspace.mit.edu/bitstream/handle/1721.1/66294/MITJPSPGC_Rpt196.pdf?sequence=1">economic</a>, and <a href="http://www.bbc.com/news/world-asia-china-35024904">political</a> threat. Because of the congruence between reducing coal use and greenhouse gas emissions, China would be likely to make substantial efforts to shift to lower emissions technologies over the next decade whether they cared about global emissions or not.</p>
<p>And <a href="https://www.scribd.com/document/270088380/China-s-INDC-in-English">the Chinese do care about emissions</a>. Unlike the incoming American leadership, the Chinese leadership knows that global warming is not a concept created by their predecessors, as Donald Trump famously tweeted, and they have <a href="https://www.theguardian.com/us-news/2016/nov/17/climate-change-a-chinese-plot-beijing-gives-donald-trump-a-history-lesson">said as much</a>. </p>
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<p>Rather, with nearly 1.4 billion people crammed into a relatively small area, the Chinese leadership correctly views global warming as a real threat.</p>
<p>The Chinese have already invested heavily in low emissions technologies including <a href="https://www.technologyreview.com/s/601093/china-is-on-an-epic-solar-power-binge/">solar</a>, <a href="http://www.bbc.com/news/science-environment-37409069">wind</a>, and <a href="http://www.world-nuclear.org/information-library/country-profiles/countries-a-f/china-nuclear-power.aspx">nuclear power</a> generation. Another motivation for undertaking these investments is a desire to be global leaders in the production and servicing of low emissions energy technologies, which are highly likely to be very important parts of the global energy mix by the middle of this century.</p>
<p>Finally, China aspires to be <a href="http://thediplomat.com/2016/09/the-g20-another-step-down-chinas-road-to-global-leadership/">a global power</a>. By reneging on US commitments made in Paris, a Trump administration will be handing China the opportunity to assume the mantle of global leadership on the defining issue for the 21st century. </p>
<p>A strategically wise China will accept the offer. While doing so, the leadership is likely to make comments about the fickle nature of democracies in general and the unreliability of the world’s second-largest emitter, the United States, in solving long-run structural problems.</p>
<h2>America can still act</h2>
<p>Let’s also not forget that American democracy has been rather robust for more than 200 years. While the federal government under a Trump administration should be expected to be <a href="http://www.nytimes.com/2016/11/12/science/myron-ebell-trump-epa.html?smprod=nytcore-iphone&smid=nytcore-iphone-share&_r=0">at best unhelpful</a> in reducing emissions, there remains a great deal that America and Americans can do to reduce emissions based on actions by states, counties, cities, companies, families and individuals, particularly in coalition. </p>
<p>The West coast and New England, along with a broad swathe of mid-Atlantic states have already been active in <a href="https://www.arb.ca.gov/cc/ab32/ab32.htm">taking steps to reduce emissions</a>. These efforts frequently <a href="http://e360.yale.edu/feature/californias_clean_car_rules_help_remake_us_auto_industry/2492/">spill over to other states</a> or even to the nation due to the economic weight that these areas represent.</p>
<p>The potential role of cities, epicenters of power consumption and home to a citizenry that takes climate change seriously, should not be underestimated. I write this from Fort Collins Colorado, which has a very ambitious <a href="http://www.fcgov.com/environmentalservices/pdf/cap-framework-2015.pdf">climate action plan</a>. The plan calls for emissions to fall to 80% below 2005 levels by about 2030 and carbon neutrality by about 2050. Until 2030, about half the planned reductions are expected to come from low emissions electricity supply and delivery. </p>
<h2>Rapid advances</h2>
<p>The chances that ambitious plans will succeed have increased substantially due to very rapid technical advance in clean energy generation technologies, notably <a href="http://www.nrel.gov/docs/fy14osti/62558.pdf">solar</a> but also <a href="http://www.nrel.gov/docs/fy15osti/63267.pdf">wind</a>, combined with rapid advances <a href="http://www.nrel.gov/esi/">in systems integration</a> approaches for coping with the inherent variability in renewable energy supplies. </p>
<p>Clean energy systems now regularly <a href="http://www.bloomberg.com/news/articles/2016-08-19/solar-sells-in-chile-for-cheapest-ever-at-half-the-price-of-coal">outperform fossil fuels</a> in open, large-scale energy supply auctions. As my coauthors and I point out in a forthcoming book, this competitiveness substantially eases <a href="https://www.wider.unu.edu/project/political-economy-clean-energy-transitions">the political economy of clean energy transitions</a>.</p>
<p>And, investors are responding. More renewable energy generation capacity was added than fossil fuel generation capacity in <a href="http://www.ren21.net/wp-content/uploads/2015/07/REN12-GSR2015_Onlinebook_low1.pdf">2014</a> for the first time. In <a href="http://fs-unep-centre.org/sites/default/files/publications/globaltrendsinrenewableenergyinvestment2016lowres_0.pdf">2015</a>, global investment in renewable power capacity was US$265.8 billion, a bit more than double dollar allocations to new coal and gas generation, which were estimated at US$130 billion.</p>
<p>With these investment volumes, the private sector has <a href="https://theconversation.com/why-trumps-vow-to-kill-obamas-sustainability-agenda-will-lead-business-to-step-in-and-save-it-68616">ample incentive</a> to pursue innovations in the clean energy space. </p>
<p>This means that expected <a href="http://fivethirtyeight.com/features/its-hard-to-tell-whether-trump-supports-renewable-energy-and-that-may-not-matter">budget cuts</a> to publicly funded centres of energy innovation, such as the National Renewable Energy Laboratory, will be much more likely to set back the long-run ambitions of American companies seeking to secure a position in an enormous global market than substantially slow the pace of innovation globally. </p>
<p>Private investment will continue. And, public investments in innovation undertaken abroad is likely to rebound first to the benefit of companies located outside the United States.</p>
<h2>The world can keep the ball rolling</h2>
<p>The incoming Trump administration’s stated intentions on global warming are terrible. But, they are not necessarily fatal, at least not yet. And China has far greater incentives to stay the course on its emissions commitments than is often recognised. </p>
<p>While avenues to emissions reductions based on federal policies of the United States are likely to be foreclosed for the next four years or more, avenues at other levels remain open. </p>
<p>And, the very favourable technology dynamics that have been in place over the past decade look likely to continue. </p>
<p>These factors, combined with solid commitments to emissions reductions from other major economies such as the <a href="http://ec.europa.eu/clima/citizens/eu/index_en.htm">European Union</a> and <a href="http://www.japantimes.co.jp/opinion/2015/07/30/commentary/japan-commentary/japans-action-plan-to-fight-climate-change/">Japan</a> imply that the global movement to limit emissions might not fall apart. Instead, the world may demonstrate just how alone the Trump administration is in refusing to confront the climate threat.</p><img src="https://counter.theconversation.com/content/68795/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Channing Arndt does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>All is not lost for the climate with the election of Donald Trump.Channing Arndt, Senior Research Fellow, Development Strategy and Governance, CGIAR System OrganizationLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/652912016-10-19T16:09:38Z2016-10-19T16:09:38ZHow Western companies can succeed in China<p>Not too long ago, when Western CEOs pondered China’s fast-growing market and billion-plus potential customers, their eyes would fill with dollar signs. But these days, thoughts of China are more likely to elicit serious soul-searching, as some of the companies that eagerly dove into China have withdrawn.</p>
<p>Earlier this year, the car-hailing service Uber <a href="http://www.wsj.com/articles/china-s-didi-chuxing-to-acquire-rival-uber-s-chinese-operations-1470024403">surrendered</a> its China operations to arch competitor Didi Chuxing in exchange for a 17.7 percent stake in the combined company. Later this month, Yum Brands, the owner of KFC and Pizza Hut, <a href="http://www.yum.com/press-releases/yum-brands-names-expected-board-of-directors-of-yum-china-holdings/">plans</a> to spin off its China unit amid growing competition in the food delivery business. Even Coca-Cola has <a href="http://www.coca-colacompany.com/press-center/press-releases/the-coca-cola-company-announces-plans-to-significantly-accelerate-bottler-refranchising">announced</a> its intention to refranchise its company-owned bottling operations in China. </p>
<p>Was the <a href="https://theconversation.com/ubers-didi-deal-dispels-chinese-el-dorado-myth-once-and-for-all-63624">China dream just a mirage</a> with Beijing simply using foreign ventures to import Western technologies and skills? Or is there a way to make money in the People’s Republic of China without giving away the store? </p>
<p>While finding success in the People’s Republic can be tricky, several Western companies have prospered – and even some of the companies that have “retreated” in recent years have profited handsomely from their China operations.</p>
<h2>Partnerships and profits</h2>
<p>While some research on joint ventures <a href="https://hbr.org/1994/07/collaborative-advantage-the-art-of-alliances">has tended to see success</a> in terms of harmony, longevity and the “ability to create and sustain fruitful collaborations,” other research has focused more on the <a href="https://hbr.org/1989/01/collaborate-with-your-competitors-and-win">benefits</a> of <a href="https://hbr.org/1991/11/the-way-to-win-in-cross-border-alliances">participation</a> in a joint venture and company profits. </p>
<p>Unduly attached to the longevity of a partnership as a measure of success, several recent articles seem dismayed by the retreat of some American companies from China. Reconsidering the activities of such companies from a profit perspective, however, reveals a somewhat different picture than the one <a href="http://www.economist.com/news/business/21703409-chinas-didi-chuxing-and-americas-uber-declare-truce-their-ride-hailing-war-uber-gives-app">suggested</a> by the <a href="http://www.smh.com.au/business/china/yum-brands-mcdonalds-look-for-buyers-as-chinese-tastes-shift-20160804-gqkzk3.html">headlines</a>. </p>
<p>Of course, the idea that China is a dangerous place for outsiders has been around for a while. Jack Perkowski, a Wall Street veteran who founded a Chinese investment firm, <a href="http://www.wsj.com/articles/SB1013037331816672480">famously dubbed</a> China “the Vietnam War of American business” – because so many promising young careers were lost there.</p>
<p>In the 1990s, international brewers arrived in China like “stampeding wildebeest,” <a href="https://www.amazon.com/China-Dream-Quest-Untapped-Market/dp/0802139752">according to journalist Joe Studwell</a>, opening 60 breweries and operating another 30 via licensing agreements. Not one of those 90 foreign breweries, however, is believed to have turned a profit. </p>
<h2>Not so fast</h2>
<p>The picture, however, is more mixed than the above stories and anecdotes suggest. While Bank of America, Yahoo and Uber all engaged in well-publicized retreats, such moves were far from disastrous.</p>
<p>Bank of America, for example, made headlines when it sold the remainder of its stake in China Construction Bank in 2013 after once owning as much as almost a fifth of the Chinese lender. The <a href="http://www.wsj.com/articles/SB10001424127887324432404579052401692576092">move was seen as a retreat</a> at the time, but the eight-year relationship was <a href="http://www.wsj.com/articles/SB10001424127887324432404579052401692576092">certainly profitable</a> for Charlotte, N.C.-based Bank of America, producing an annual return of over 10 percent.</p>
<p>Yahoo had a similar experience with Alibaba. Yahoo invested US$1 billion in Alibaba in 2005 and handed over all of its China operations in return for a 40 percent equity stake. It <a href="https://www.yahoo.com/news/yahoo-closes-7-6-billion-deal-alibaba-group-161614948--finance.html">sold half back</a> for about $7.6 billion in cash and preferred stock in 2012. Considering Yahoo still owns a sizable stake, its return looks pretty impressive. </p>
<p>Even Uber’s retreat is less than a total rout. Assuming a $35 billion valuation of the combined Uber-Didi Chuxing entity that remains, Uber’s 17.7 percent stake is worth about $6.2 billion. While this represents a haircut of nearly 25 percent from the <a href="http://www.reuters.com/article/us-uber-china-valuation-idUSKCN0UT0C9">$8 billion value</a> placed on Uber’s China operations before the surrender, Uber stands to make more from its investment. In the two years before Uber decided to fold its operations into Didi’s, Uber <a href="http://www.economist.com/news/business/21703409-chinas-didi-chuxing-and-americas-uber-declare-truce-their-ride-hailing-war-uber-gives-app">lost $2 billion in China</a>. Now, with the Uber – Didi price war in the rearview mirror, the future seems fairly promising for Didi shareholders like Uber. </p>
<p>On top of that, for a favored few, China has been a gold mine, and both Coca-Cola and GM represent examples of American companies that have achieved some version of the China dream.</p>
<h2>Coca-Cola: From ‘bourgeois’ to dominance</h2>
<p>Coca-Cola had an auspicious start in China a century ago, some trouble with Communists in the mid-20th century, and enormous success in more recent years. </p>
<p>The soft-drink maker <a href="http://fortune.com/2014/09/11/opening-happiness-an-oral-history-of-coca-cola-in-china/">had been successful</a> in China as early as the 1920s. But Mao Zedong, who <a href="http://fortune.com/2014/09/11/opening-happiness-an-oral-history-of-coca-cola-in-china/">deemed</a> the company’s fizzy brown drink a “<a href="http://thesilkinitiative.com/5-things-to-learn-from-cokes-brand-building-story-in-china/">bourgeois concoction</a>,” nationalized the bottling companies after the Communist takeover in 1949. The company would have to wait nearly thirty years for another crack at the market. </p>
<p>That came in 1978, when efforts to reach out to state-owned import-export companies led to a meeting with the China National Cereals, Oils and Foodstuffs Corporation. After that, <a href="http://www.coca-colacompany.com/stories/celebrating-35-years-of-coca-cola-in-china">things moved quickly</a> and rapidly led to a deal, helped by the Carter administration’s <a href="http://millercenter.org/president/carter/speeches/speech-3935">normalization of diplomatic relations</a> around the same time. </p>
<p>Things did not, however, always go smoothly. Initially, Coca-Cola <a href="http://www.coca-colacompany.com/stories/celebrating-35-years-of-coca-cola-in-china">only received permission to sell</a> to international visitors in foreign hotels and “friendship” stores in three cities, and the company <a href="http://fortune.com/2014/09/11/opening-happiness-an-oral-history-of-coca-cola-in-china/">lost a lot of money</a> in the first two or three years shipping Coke from Hong Kong. In the early 1980s, the company was <a href="http://fortune.com/2014/09/11/opening-happiness-an-oral-history-of-coca-cola-in-china/">barred from selling</a> its products in the country for a year.</p>
<p>Over time, however, restrictions on company sales were loosened, and the company began to see real growth in the market. From a shipment of <a href="http://www.coca-colacompany.com/stories/celebrating-35-years-of-coca-cola-in-china">20,000 cases in January 1979</a>, Coca-Cola was <a href="http://www.joc.com/maritime-news/coca-cola-uncaps-plan-build-bottling-plants-chinese-venture_19930721.html">operating 13 bottling plants</a> in China by 1993 and controlled 23 percent of the country’s carbonated soft-drink market by 1996. By 2010, it <a href="http://www.wsj.com/articles/SB10001424053111903596904576515553953471040">held a 60 percent share</a> and <a href="http://www.coca-colacompany.com/stories/celebrating-35-years-of-coca-cola-in-china">owned 43 bottling plants</a> in 2014. Today, the country is now Coca-Cola’s <a href="http://www.coca-colacompany.com/stories/coke-breaks-ground-on-45th-plant-in-china-as-part-of-4-billion-investment">third-largest market</a> in the world after the U.S. and Mexico.</p>
<h2>GM’s late start</h2>
<p>In contrast to Coca-Cola’s long history in China, General Motors is a relative newcomer to the People’s Republic – even compared with other foreign automakers.</p>
<p>While Jeep formed its first joint venture in China in 1984 and Volkswagen entered in 1985, GM didn’t make <a href="http://articles.latimes.com/1992-01-16/business/fi-377_1_auto-markets">its first investment</a> until January 1992. Even less auspicious, GM <a href="http://www.nytimes.com/1998/06/23/business/gm-to-expand-investment-in-building-trucks-in-china.html">abandoned</a> that investment three years later, before local production had even begun.</p>
<p>In retrospect, the <a href="http://www.bloomberg.com/news/articles/1995-11-05/how-gm-got-the-inside-track-in-china">key to GM’s long-term success</a> in China would have to wait until the fall of 1995, when China’s leading car maker, Shanghai Automotive Industry, <a href="https://history.gmheritagecenter.com/wiki/index.php/1995,_GM_Links_with_SAIC">picked the company</a> as its foreign partner in a billion dollar project to build sedans. </p>
<p>The deal was significant enough that then-Vice President Al Gore and Chinese Prime Minister Li Peng presided over the signing ceremony of the 50/50 joint venture in 1997, and by 1999, Shanghai GM <a href="http://www.wsj.com/articles/SB940882358599254880">was selling Buicks</a> as fast as it could make them.</p>
<p>Since then, GM’s partnerships in China have thrived. In 2015, GM’s automotive China joint ventures <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=231169&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTEwNzA4NjE4JkRTRVE9MSZTRVE9NzMmU1FERVNDPVNFQ1RJT05fUEFHRSZleHA9JnN1YnNpZD01Nw%3d%3d">generated</a> roughly $45 billion in net sales and nearly $4.3 billion in net income, and the country accounted for <a href="http://phx.corporate-ir.net/phoenix.zhtml?c=231169&p=irol-SECText&TEXT=aHR0cDovL2FwaS50ZW5rd2l6YXJkLmNvbS9maWxpbmcueG1sP2lwYWdlPTEwNzA4NjE4JkRTRVE9MSZTRVE9NSZTUURFU0M9U0VDVElPTl9QQUdFJmV4cD0mc3Vic2lkPTU3">37 percent of its total vehicle sales</a>. Despite being late to the party, the Shanghai partnership put GM on top of the pack.</p>
<h2>How to understand China</h2>
<p>Despite this kind of success, there have been frequent concerns raised in the press about the long-term costs of doing business in China, ranging from fears of regulatory fallout to the common allegation that Western businesses get pushed out once domestic companies are able to acquire and master key technologies. </p>
<p>Back in 1998, The Wall Street Journal <a href="http://www.wsj.com/articles/SB887147472543929500">reported</a>: </p>
<blockquote>
<p>“While the world’s biggest auto maker wants access to what one day may become the world’s biggest auto market, China wants the technology and training to build its own cars – and possibly compete with GM.</p>
</blockquote>
<p>And others have gone further, <a href="http://www.wsj.com/articles/SB10001424127887324482504578451410328454302">suggesting GM</a> – through its technical partnership with its Chinese partners – is gradually transitioning from a company that wraps its cars and trucks in the patriotism of "Old Glory” to one selling vehicles with “Made in China” stickers affixed on the bumper.</p>
<p>Having thought about China’s <a href="http://thediplomat.com/2016/10/the-race-to-chinas-19th-party-congress/">politics</a> and <a href="http://www.fletcherforum.org/2014/11/14/brookfield/">business environment</a> for a number of years, I think that being in China, when done right, can yield significant benefits. Moreover, if one believes that China’s renminbi is only going to get stronger, then there may be no better time than the present to invest in China. The tuition for learning about the place will never be smaller, the cost of mistakes will never be lower, and a long-term presence in the country may open the door to increasingly valuable sales over time.</p>
<p>Of course, there are many different factors that go into a successful investment decision, and it may be that Clint Eastwood’s character Harry Callahan was on to something. At a certain point, a CEO has got to ask him or herself one question: “Do I feel lucky?” Well, do you?</p>
<figure>
<iframe width="440" height="260" src="https://www.youtube.com/embed/bwSxtPEZz9A?wmode=transparent&start=0" frameborder="0" allowfullscreen=""></iframe>
<figcaption><span class="caption">Feeling lucky?</span></figcaption>
</figure><img src="https://counter.theconversation.com/content/65291/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Jonathan Brookfield does not work for, consult, own shares in or receive funding from any company or organization that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Uber’s ‘retreat’ from China has led to soul-searching about whether the country is worth it. Don’t tell that to Coca-Cola and GM, however, which have found great success in the People’s Republic.Jonathan Brookfield, Adjunct Associate Professor, Tufts UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/344962014-11-20T23:49:00Z2014-11-20T23:49:00ZAustralia’s coal and gas exports are being left stranded<figure><img src="https://images.theconversation.com/files/65140/original/image-20141120-4490-fpmjaf.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Australia's official forecasts for expanding fossil fuel exports don't match up with what's needed to avoid severe climate change. </span> <span class="attribution"><a class="source" href="https://www.flickr.com/photos/62459458@N08/6719854525">Jeremy Buckingham/Flickr</a>, <a class="license" href="http://creativecommons.org/licenses/by/4.0/">CC BY</a></span></figcaption></figure><p>In the last week the US and China announced goals to reduce emissions by 26-28% and cap emissions by 2030 respectively. India also signalled its aim to <a href="http://www.theaustralian.com.au/business/latest/india-to-stop-coal-imports-possibly-within-3-years/story-e6frg90f-1227122769658">end coal imports</a> within 2-3 years. </p>
<p>These are telling signs of a move away from fossil fuels by some of the world’s biggest emitters of greenhouse gases, including countries that are key importers of Australia’s coal and gas. </p>
<p>The <a href="http://www.unep.org/newscentre/Default.aspx?DocumentID=2812&ArticleID=11082&l=en">latest report</a> from the UN Environment Programme (UNEP), released this week, called for an end to carbon pollution by 2070, followed by action to reduce greenhouse gas emissions already in the atmosphere (what we call “beyond zero”).</p>
<p>But <a href="http://www.bree.gov.au/publications/australian-energy-projections-2049%E2%80%9350">government forecasts</a> produced by the <a href="http://www.bree.gov.au/">Bureau of Resources and Energy Economics</a> (BREE) predict continuing expansion of fossil fuel exports at least until 2050. </p>
<p>A new research report released by <a href="http://media.bze.org.au/fossileconomy/fossileconomy.pdf">Beyond Zero Emissions</a> today shows how far off these projections are, and the potential impacts to expect when the world implements policies to limit global warming to 2C. </p>
<h2>Expanding fossil fuels</h2>
<p>The Australian government is relying on BREE’s energy projections when producing the country’s over-arching energy strategy, the new <a href="http://ewp.industry.gov.au/">Energy White Paper</a>.</p>
<p>BREEs Australian 2014 <a href="http://www.bree.gov.au/publications/australian-energy-projections-2049%E2%80%9350">energy projections</a> to 2049-50 indicate continued expansion of fossil fuel exports long into the future. In fact, the new projection indicates more coal production through to 2050 than the previous issue which supported the <a href="https://theconversation.com/energy-white-paper-plans-to-burn-burn-burn-it-all-10616">2012 Energy White Paper</a>. </p>
<p>This projection translates to Australia’s total energy production increasing from around 4% of global emissions today to 16% of the global budget in 2050 recommended by the Intergovernmental Panel on Climate Change (IPCC) — and rising sharply (see the figure below). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=488&fit=crop&dpr=1 600w, https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=488&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=488&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=613&fit=crop&dpr=1 754w, https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=613&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/65080/original/image-20141120-28651-1ahnz3m.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=613&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Australian combined domestic and export fossil energy emissions based on 2012 Energy White Paper projection compared with the IPCC recommended annual emission budget (RCP2.6). Proportion of combined emissions (Aust. %) on right axis.</span>
<span class="attribution"><span class="source">Data source: BREE</span></span>
</figcaption>
</figure>
<p>It is not credible to expect Australia’s fossil resources to gain such international prominence when all producing countries will be under pressure from reducing demand. The proportions of domestic and exported emissions are irrelevant: all consumers will be shifting away from fossil fuels and this will impact on Australian producers and the wider economy.</p>
<h2>Diverging energy futures</h2>
<p>Each year the International Energy Agency (IEA) releases projections of global energy demand in its <a href="http://www.worldenergyoutlook.org/">World Energy Outlook</a>. This outlook provides energy trends for the next couple of decades according to national energy policies recently announced (new policies scenario), as well as energy trends in-line with global efforts to limit CO<sub>2</sub> emissions to 450 parts per million (450 scenario), the concentration estimated by the IPCC to correspond with 2C warming.</p>
<p>Both the IEA’s 2014 <a href="http://www.worldenergyoutlook.org/">World Energy Outlook</a> new policies scenario and the 450 scenario indicate substantially less demand for Australia fossil fuel resources than the BREE forecasts suggest. </p>
<p>Not surprisingly, the 450 scenario suggests dramatic shifts in the world’s use of fossil fuels. Coal consumption would reduce in absolute terms by around one third. This will impact on Australian exports and the revenue being anticipated from their exploitation.</p>
<p>Successive short term forecasts from BREE’s <a href="http://www.bree.gov.au/publications/resources-and-energy-quarterly">Resource and Energy Quarterly</a> have revised expectations down, forcing the treasury to revise down its expectation on revenues. Projected coal and gas revenue for 2015 was almost A$15 billion lower in September 2014 forecast than that of September 2013. </p>
<p>This does not include iron ore downgrades which have the industry reeling at the present time. It may be just the beginning.</p>
<p>Comparing the BREE projections with those of the IEA’s 450 scenario, shortfalls in projected revenue could amount to AU$40 billion by 2020 and AU$100 billion by 2030 (in 2014 dollars).</p>
<h2>Everyone else is doing it, why can’t we?</h2>
<p>Such dramatic changes hinge largely on the ambitions of only a few nations. China, Japan, Korea and India account for 80% of Australia’s fossil fuel exports. </p>
<p>The recent policies and goals of these nations are explored in the report and indeed indicate a substantial change occurring. China is on the verge of “<a href="http://www.abc.net.au/news/2014-02-10/china-peak-coal-and-ets/5249436">peak coal</a>”, rebalancing the economy away from energy intensive industry and introducing a <a href="http://reneweconomy.com.au/2014/china-plans-65bn-carbon-market-at-around-18tonne-48911">national emissions trading scheme</a>. </p>
<p>Japan is on an <a href="http://www.greentechmedia.com/articles/read/how-japan-replaced-half-its-nuclear-capacity-with-efficiency">energy efficiency</a> drive to reduce its fuel import bill. </p>
<p>Korea has introduced a tax on coal of AU$18 per tonne and is finalising an emissions trading scheme. </p>
<p>India has doubled its tax on coal which funds renewable energy projects and has signalled its intention to <a href="http://www.theaustralian.com.au/business/latest/india-to-stop-coal-imports-possibly-within-3-years/story-e6frg90f-1227122769658">stop importing coal</a> within 2-3 years. </p>
<p>A clear change of direction is occurring however government forecasts are unmoved. </p>
<p>Ignoring global political action on climate change places Australia at risk of being unprepared, economically and financially, for changes already taking place.</p><img src="https://counter.theconversation.com/content/34496/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Stephen Bygrave is CEO of Beyond Zero Emissions.</span></em></p>In the last week the US and China announced goals to reduce emissions by 26-28% and cap emissions by 2030 respectively. India also signalled its aim to end coal imports within 2-3 years. These are telling…Stephen Bygrave, Adjunct Professor, Faculty of Science, UNSW SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/344022014-11-19T19:26:54Z2014-11-19T19:26:54ZFactCheck: are Australian and US climate targets the same?<blockquote>
<p><strong>If you use the full Kyoto period — 1990 to 2020 — the US is minus 5% and Australia is almost exactly the same.</strong> Environment minister Greg Hunt, <a href="http://www.abc.net.au/radionational/programs/breakfast/greg-hunt/5895738">Radio National</a>, November 17.</p>
<p>*<em>We and the United States are pretty much on the same page. Over a 30 year period from 1990 to 2020, we have the same — roughly the same — reduction … If you compare apples with apples, the American position and our position on reductions are effectively the same.
*</em> Treasurer Joe Hockey, <a href="http://www.abc.net.au/radionational/programs/breakfast/joe-hockey/5887458">Radio National</a>, November 13.</p>
</blockquote>
<p>Treasurer Joe Hockey and energy minister Greg Hunt were responding to claims (see <a href="https://theconversation.com/the-us-china-climate-deal-leaves-australia-with-no-excuse-34256">here</a> and <a href="https://theconversation.com/us-china-climate-deal-at-last-a-real-game-changer-on-emissions-34148">here</a>) that the <a href="http://www.whitehouse.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climate-change-and-clean-energy-c">US-China climate deal</a> put pressure on Australia to revisit its efforts to reduce emissions.</p>
<p>The US target is a 17% reduction below 2005 levels by 2020 and, as <a href="http://www.whitehouse.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climate-change-and-clean-energy-c">pledged last week</a>, a 26-28% reduction by 2025. </p>
<p>Under the <a href="http://newsroom.unfccc.int/">United Nations Framework Convention on Climate Change</a>, Australia pledged an unconditional target of 5% reduction below 2000 levels by 2020, potentially moving to a target of 15% or 25% depending on international factors.</p>
<p>The current Australian government mentions the <a href="http://www.greghunt.com.au/Media/MediaReleases/tabid/86/articleType/ArticleView/articleId/3070/China-US-Climate-Change-Announcement.aspx">5% target only</a>, implying that conditions for moving to the 15% and 25% levels have not been fulfilled (the <a href="http://www.climatechangeauthority.gov.au/reviews/targets-and-progress-review-3">Climate Change Authority disagrees on this</a>). </p>
<p>A key aspect of the recently announced US target is that it is for 2025. Australia <a href="http://www.climatechange.gov.au/climate-change/greenhouse-gas-measurement-and-reporting/australias-emissions-projections/australias">has</a> a long-term 2050 target of 80% below 2000 levels, and a range of short-term 2020 targets, but no mid-term 2025 target. </p>
<p>It is therefore impossible to compare Australia’s target directly with the just announced 2025 target of the US. </p>
<h2>Comparing 2020 targets</h2>
<p>In order to make a comparison for the 2020 targets at least, we need to apply a number of adjustments. This will allow us to compare the US and Australian targets over the 30-year period up to 2020, as Joe Hockey put it, like with like, apples with apples. </p>
<p>To do this we need to: </p>
<p>a) take account of the fact that Australia got a specific clause under the Kyoto Protocol to calculate the base year emission level</p>
<p>b) set the base year against which the target is compared to 1990</p>
<p>c) factor in population growth.</p>
<h2>Australia’s deforestation history</h2>
<p>An important part of this comparison is the impact of deforestation emissions. This factor was not taken into account in Table 3.1 of <a href="http://www.climatechangeauthority.gov.au/files/files/priorities%20for%20the%20next%20agreement/Post-2020%20international%20agreement_Final_Web%20version_2.pdf">the International Climate Action Research Paper</a> (page 21), which is presumably the basis for the ministers’ statements.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/64937/original/image-20141119-7490-pygukt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/64937/original/image-20141119-7490-pygukt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=458&fit=crop&dpr=1 600w, https://images.theconversation.com/files/64937/original/image-20141119-7490-pygukt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=458&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/64937/original/image-20141119-7490-pygukt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=458&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/64937/original/image-20141119-7490-pygukt.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=576&fit=crop&dpr=1 754w, https://images.theconversation.com/files/64937/original/image-20141119-7490-pygukt.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=576&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/64937/original/image-20141119-7490-pygukt.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=576&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Australian deforestation emissions 1990 to 2011.</span>
<span class="attribution"><span class="source">Adapted from Climate Change Authority Targets and Progress Review, Figure D.39, showing historical data until 2011, i.e. without projections.</span></span>
</figcaption>
</figure>
<p>In 1990 and 2000 Australia’s emissions from deforestation were significant, but are substantially lower today. </p>
<p>Under the <a href="http://unfccc.int/resource/docs/convkp/kpeng.pdf">Kyoto Protocol</a>, Australia negotiated a lenient second sentence in Article 3.7 (sometimes referred to as the “Australia clause”) that allowed Australia to include 1990 or 2000 deforestation emissions in the base year. </p>
<p>Including deforestation increased the reference level against which the Australian target is compared to, as you can see in the figure below. The blue and grey dot for 1990 and 2000 at the top represent Australia’s emissions including deforestation, while the solid blue line represents Australia’s emissions without deforestation. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=276&fit=crop&dpr=1 600w, https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=276&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=276&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=347&fit=crop&dpr=1 754w, https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=347&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/64914/original/846rn7vq-1416348117.png?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=347&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Australian and US historical greenhouse gas emissions and 2020 targets. How the government compares them (left grey box) and an apples-with-apples comparison (right grey box). Australia’s Kyoto Protocol baseyears (KP baseyear) are shown as dots for 1990 and 2000.</span>
<span class="attribution"><span class="source">Own calculations based on UNFCCC National Inventory Submissions and Initial Reports by US and Australia.</span></span>
</figcaption>
</figure>
<p>For all other developed countries, large deforestation activities stopped a long time ago and therefore do not increase base year emissions. </p>
<p>Thus, while Australia compares future climate targets against past emissions that include those deforestation emissions, other countries — such as the US — do not. </p>
<p>It is a good thing for the climate that Australia’s substantial deforestation activities have become a thing of the past. However, because emissions from deforestation have declined, Australia was able to substantially increase emissions in fossil fuels, industry, waste and agriculture, and still meet the 5% target. </p>
<p>Deforesting some land in 1990 does not necessarily lead to more deforestation (and more emissions) in the future. In fact, it might lead to less because less forest is left over. Thus, high deforestation emissions in the past are little reason to provide lenient rules for future emissions. </p>
<p>In contrast, high-emitting fossil fuel infrastructure with trucks, coal power plants and LNG facilities leads to higher emissions now and for some time into future — essentially until that fossil fuel infrastructure is retired again. </p>
<p>Long story short: an apples-with-apples comparison would compare the US and Australia on the same footing. Thus, we account for US and Australia here basically as the accounting works for all other parties under the Kyoto Protocol i.e. excluding deforestation and forestry from the base year. </p>
<h2>Emissions since 1990</h2>
<p>Australian and US emissions developed similarly from 1990 to 1996. Thereafter, Australian emissions continued to increase, while US emissions levelled off and started to fall after 2007 (see image above). </p>
<p>The US’s -17% target for 2020 now stipulates a further 1.1% reduction per year from 2012 to 2020 (relative to 2010 emission levels). The US just pledged to increase that reduction rate thereafter to 2.3-2.8% to 2025 in order to reach its 26-28% target.</p>
<p>In contrast, Australian emissions can stay roughly constant — at 30% above 1990 levels — and still meet the 2020 target of 5% below the 2000 Kyoto Protocol Base Year. </p>
<p>Thus, Australia’s 5% target represents vastly different levels of effort compared to that of the US with its nominal 17% reduction by 2020. US emissions must return to below 1990 levels (4% to be precise) while Australian emissions can stay at 30% above 1990 levels. </p>
<h2>Australia’s population growth is higher, though</h2>
<p>To be fair, Australia’s population by 2020 is projected to be almost 50% higher than in 1990, while the US population will likely increase by only a third (<a href="http://esa.un.org/unpd/wpp/index.htm">UN 2012 medium population projections</a>).</p>
<p>There is therefore some good reason for Australia’s emissions to increase a greater rate. </p>
<p>An apples-with-apples comparison would therefore look at per-capita emissions since 1990. </p>
<p>It turns out that the US still outperforms Australia by a good margin over the 30-year period to 2020 (see figure below). While under its 5% target Australia will likely decrease its per-capita emissions to 2020 by 12% compared to 1990 levels, the US will do so by 28%, i.e., more than twice as much (under its 17% target).</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=346&fit=crop&dpr=1 600w, https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=346&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=346&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=435&fit=crop&dpr=1 754w, https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=435&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/64916/original/8kwxcz4k-1416348813.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=435&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Australia and US per-capita greenhouse gas emissions.</span>
<span class="attribution"><a class="source" href="http://esa.un.org/unpd/wpp/index.htm">Own calculations based on UNFCCC National Inventory Submissions by the US and Australia, as well as [UN World Population Prospects: The 2012 Revision](http://esa.un.org/unpd/wpp/index.htm).</a>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<h2>Meeting criteria for a more ambitious target</h2>
<p>Even before the US-China deal, the <a href="http://www.climatechangeauthority.gov.au/reviews/targets-and-progress-review-3">Climate Change Authority concluded</a> that the <a href="http://unfccc.int/resource/docs/2011/sb/eng/inf01r01.pdf">conditions</a> set under the UNFCCC for the 15% target have been fulfilled, namely:</p>
<blockquote>
<p>a global agreement which falls short of securing atmospheric stabilisation at [450 parts per million CO<sub>2</sub> equivalent] under which major developing economies commit to substantially restraining their emissions and advanced economies take on commitments comparable to Australia’s</p>
</blockquote>
<p>Every aspect of this condition has been met - or in fact over-fulfilled. We have just demonstrated that the US as an advanced economy has not only a comparable, but a more ambitious commitment than Australia’s 5% goal. </p>
<p>For Australia to match the US efforts over the 1990 to 2020 period in terms of absolute greenhouse gas emission reductions, a 29% reduction below Australia’s 2000 base year would be needed. </p>
<p>Even if the legitimate argument were brought forward that population increases are expected to be greater in Australia than in the US, the 5% Australian target is no match to US’s 17% target. A 21% Australian target would be needed. </p>
<p>As such, of Australia’s three proposed targets, only the 25% option would be sufficient to meet (and beat) US ambitions.</p>
<h2>Verdict</h2>
<p>An apples-with-apples comparison shows that Australia lags far behind the United States in efforts to reduce greenhouse gas emissions from its energy, transport and industrial sectors. </p>
<p>To match US efforts, Australia would have to increase its 2020 ambitions from the current 5% below 2000 to 21% or even 29%, depending on whether different population growth is taken into account, or not. </p>
<p>Of its three proposed targets, Australia would therefore have to move to the most ambitious 25% by 2020 to approximate the US’s target. </p>
<hr>
<h2>Review</h2>
<p>The conclusion is correct that Australia’s current 5% reduction target (for 2020 compared to 2000) is weaker than the United States’ 17% reduction target (for 2020 compared to 2005). </p>
<p>The Fact Check also correctly notes that the conditions for Australia moving to a higher point in its target range, a 15% reduction or more, have been fulfilled. This has not only been pointed out by the Climate Change Authority, but it has long been argued by academics including Prof Ross Garnaut, myself and others. </p>
<p>It is important to recognise that the US target announced at APEC is not the 17% target for 2020, but a 26-28% target at 2025 (compared to 2005). The Australian government has not made a post-2020 emissions reductions commitments. All countries are called on to submit their pledges early in 2015. The Australian Climate Change Authority has <a href="http://www.climatechangeauthority.gov.au/reviews/targets-and-progress-review-3">recommended</a> a 40-60% reduction at 2030 compared to 2000. </p>
<p>The Treasurer’s and Environment Minister’s assertion that the targets are “effectively” or “almost exactly the same” rely on comparing the 2020 target emissions levels for both countries to a 1990 base year, and including all emissions sources. This distorts the picture, as in 1990 deforestation was still a large source of emissions in Australia, as the Fact Check points out. </p>
<p>The Fact Check points out that Australia’s population growth rate tends to be higher than that of the United States, so if countries were aiming for the same reduction in per capita emissions then Australia’s absolute emissions target would be somewhat less stringent than that of the United States. </p>
<p>While this is correct in itself, it omits an important factor going the other way: Australia’s per capita emissions level is higher still than that of the United States. In a world that is gravitating towards equal per capita emissions allocations (with trading of allocations between countries to accommodate differences in physical and economic structure), the higher the per capita emissions level, the faster the required rate of reduction. </p>
<p>Which of the two effects is stronger depends on the timeframe for convergence of per capita emissions. As a working assumption, we may assume they roughly cancel out, and go straight back to a comparison of reductions in absolute emissions levels.</p>
<p>Bottom line: Australia’s 2020 target is weaker than the existing US 2020 target, and a much stronger target will be required to match the US post-2020. — <strong>Frank Jotzo</strong></p>
<p><div class="callout"> Have you ever seen a “fact” that doesn’t look quite right? The Conversation’s FactCheck asks academic experts to test claims and see how true they really are. We then ask a second academic to review an anonymous copy of the article. You can request a check at checkit@theconversation.edu.au. Please include the statement you would like us to check, the date it was made, and a link if possible.</div></p><img src="https://counter.theconversation.com/content/34402/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Malte Meinshausen works for The University of Melbourne, consults the German Ministry of Environment and he receives funding since February 2014 from the Australian Government as ARC Future Fellow. </span></em></p><p class="fine-print"><em><span>Frank Jotzo receives research grant funding from the ARC and the Australian government.</span></em></p><p class="fine-print"><em><span>Dr Anita Talberg does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>If you use the full Kyoto period — 1990 to 2020 — the US is minus 5% and Australia is almost exactly the same. Environment minister Greg Hunt, Radio National, November 17. *We and the United States are…Malte Meinshausen, A/Prof., School of Earth Sciences, The University of MelbourneDr Anita Talberg, PhD student - geoengineering, The University of MelbourneLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/342392014-11-16T19:17:52Z2014-11-16T19:17:52ZFactCheck: does the new climate deal let China do nothing for 16 years?<blockquote>
<p>“<strong>As I read the agreement it requires the Chinese to do nothing at all for 16 years while these carbon emissions regulations are creating havoc in my state and around the country.</strong>” – US Republican Senate leader <a href="http://www.theguardian.com/environment/2014/nov/12/us-china-climate-deal-boosts-global-talks-but-republicans-vow-to-resist">Mitch McConnell</a>, November 12, 2014.</p>
</blockquote>
<p>Far from “doing nothing”, China will be building the world’s largest renewable energy system over the next 16 years. This is something that China has already started doing – so the targets agreed upon are feasible, if arduous.</p>
<p>As part of the <a href="https://theconversation.com/au/topics/us-china-climate-deal">US-China climate deal</a> announced on Wednesday, China is committing to raise the proportion of renewables in its total energy system to 20%. As renewables and nuclear power currently account for 10% of China’s total energy consumption, this implies a doubling of its renewables commitment. The challenge is illustrated in the graph below. </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/64625/original/m7gsdzp3-1416016211.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Energy use from zero-emission sources in China.</span>
<span class="attribution"><span class="source">Authors</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>This is why Chinese president Xi Jinping can commit China to peaking its carbon emissions by 2030. In reality, we and many other observers expect China’s carbon emissions to peak well before that date, so there is room for more dramatic announcements to come from the Chinese side.</p>
<p>In fact, at the recent <a href="http://www.apec.org">APEC meeting</a> in Beijing, China’s national Energy Bureau stated that China’s coal consumption would probably peak by 2020, at about 4.2 billion tonnes per year. So carbon emissions could peak just a little after that – and certainly before 2030.</p>
<p>Mitch McConnell and many other commentators have placed all their emphasis on China’s building of a “black” energy system, comprising new coal and other fossil fuel facilities, while ignoring the enormous commitments already made to renewables and a complementary green energy system. </p>
<p>By our reckoning, the leading edge of change in China’s energy system is already more green than black, and the total system is <a href="http://www.japanfocus.org/-Hao-Tan/4209">greening at such a rate</a> that the goals just announced as part of the climate deal should certainly be met. </p>
<p>The White House, in its <a href="http://www.whitehouse.gov/the-press-office/2014/11/11/fact-sheet-us-china-joint-announcement-climate-change-and-clean-energy-c">statement</a> announcing the joint deal, said that for China to meet its commitment: </p>
<blockquote>
<p>…it will require China to deploy an additional 800-1000 gigawatts of nuclear, wind, solar and other zero-emission generation capacity by 2030 – more than all the coal-fired power plants that exist in China today and close to total current electricity generation capacity in the United States.</p>
</blockquote>
<p>These are enormous numbers, but they fit with China’s current capacity and goals. In 2013 China’s generating capacity from all sources reached 1,247 gigawatts. Its generating capacity from water, wind and sun (leaving nuclear to one side) has already reached 378 gigawatts, far in front of all other industrial countries (see below and <a href="http://www.ren21.net/REN21Activities/GlobalStatusReport.aspx">here</a>). </p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=450&fit=crop&dpr=1 600w, https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=450&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=450&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=566&fit=crop&dpr=1 754w, https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=566&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/64626/original/8855nzxf-1416016366.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=566&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Renewable electric power capacity in China and other countries in 2013.</span>
<span class="attribution"><span class="source">Based on REN21(2014) Global Status Report</span>, <span class="license">Author provided</span></span>
</figcaption>
</figure>
<p>China’s <a href="http://en.ndrc.gov.cn">National Development and Reform Commission</a> has already announced plans to raise that total to 550 gigawatts by 2017. This is a commitment to renewables on a colossal scale that dwarfs that of other countries.</p>
<p>This goal would call for an additional 1,000 gigawatts of renewable generation capacity to be built over the next 15 years – or 1.33 gigawatts (equivalent to a large nuclear power station) <a href="http://reneweconomy.com.au/2014/china-vows-install-1-3gw-clean-energy-week-98640">every week</a>.</p>
<p>The difference between the commitments made by China and those by other countries is that China is committing to renewables as part of an industrial strategy to focus its industrial growth around such clean industries and technologies. As part of the <a href="http://www.cbichina.org.cn/cbichina/upload/fckeditor/Full%20Translation%20of%20the%2012th%20Five-Year%20Plan.pdf">12th Five year Plan</a>, China has singled out <a href="http://www.reuters.com/article/2012/07/23/us-china-economy-strategic-idUSBRE86M03R20120723">seven strategic industries</a> that it sees as being the pillars of its economy – including electric vehicles, renewable energy, and energy efficiency. </p>
<p>There is likely to be even greener tinge to the <a href="http://news.xinhuanet.com/english/china/2014-09/05/c_133621684.htm">13th Five Year Plan</a>, currently under discussion and due to run from 2016 to 2020. </p>
<p>So far from “doing nothing” over the next 16 years, China is transforming its economy and energy system so that water, wind and solar power will be its driving forces. Other countries – not least close US allies such as Australia and Canada – would be wise to pay attention.</p>
<h2>Verdict</h2>
<p>False. China has an extensive plan to curtail its emissions between now and 2030, including building renewable energy facilities on a far larger scale than any other nation. Honouring its new climate pact with the United States will involve doing a lot more than nothing.</p>
<h2>Review</h2>
<p>The view that China’s announced target is feasible but arduous is correct. It is also true that a peaking of carbon dioxide emissions in China is possible before 2025, given strong Chinese policy efforts and future changes to the rate and nature of China’s economic growth. China has extensive policies in place to constrain the growth in energy use and to shift away from coal, and under this commitment China will intensify those efforts. </p>
<p>It is important to understand that China’s effort is much broader even than the authors of this FactCheck suggest. The text correctly points out the importance of renewable energy expansion, but improvements in energy efficiency and the transformation of China’s economic structure towards high-value manufacturing and services will do more to dampen carbon emissions growth. In my <a href="https://ccep.crawford.anu.edu.au/publication/ccep-working-paper/4532/reaping-economic-benefits-decarbonization-china">own analysis</a>, my colleagues and I found that a carbon dioxide peak around 2025 would be achieved by maintaining a 4% per year improvement in economy-wide energy productivity, and a 1.0-1.5% annual reduction in the carbon intensity of energy supply. The former comes through better technical efficiency and structural change, the latter through a shift from coal to gas, renewables and nuclear power. – <em>Frank Jotzo</em></p><img src="https://counter.theconversation.com/content/34239/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Frank Jotzo receives research grant funding from the ARC and the Australian government.</span></em></p><p class="fine-print"><em><span>Hao Tan and John Mathews do not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and have disclosed no relevant affiliations beyond their academic appointment.</span></em></p>“As I read the agreement it requires the Chinese to do nothing at all for 16 years while these carbon emissions regulations are creating havoc in my state and around the country.” – US Republican Senate…John Mathews, Professor of Strategic Management, Macquarie Graduate School of Management, Macquarie UniversityHao Tan, Senior Lecturer in International Business , University of NewcastleLicensed as Creative Commons – attribution, no derivatives.