In the United Nation’s annual climate change conference held in Doha last December, delegates from 194 countries came together at the last minute to extend the Kyoto Protocol. The Protocol is a legally binding climate accord by which rich countries are required to make quantified carbon emission cuts.
But the second phase of the Protocol, commencing in 2013, still omits China – the world’s biggest national source of greenhouse gases.
China is often seen as a roadblock in international climate change talks. Its own greenhouse gas emissions have soared in the past decade. With a population of 1.3 billion it has contributed 19.1% of the greenhouse gas emissions produced worldwide.
Senior Chinese officials reject emission reduction in absolute terms. They insist that rich nations should do more on the climate before they commit more.
But China is more ambitious back home than it appears in international scenes.
It has pledged to cut back emissions intensity (emissions per unit of GDP) by 40-45%, relative to 2005 by 2020. Short-term goals include reduction in energy intensity by 16% and carbon intensity by 17%, for the period from 2011 through 2015. The most prominent plan is to run a national emission trading scheme (ETS), ahead of the US and along with Australia. It is destined to be the world’s second-largest emissions market.
The notion of carbon emission trading has found its way in industrialised economies, notably the European Union (EU). Yet, carbon trading had experienced an uncertain period in 2009 when the world economy stumbled and international climate change negotiations encountered major hurdles. At the time of uncertainties, a non-traditional market advocate cast a vote of confidence for the contested concept of carbon trading.
That is China, which has called itself a “socialist market economy”.
In late 2011, the Chinese government appointed seven pilot sites across the country, including two provinces (Guangdong and Hubei) and five cities (Beijing, Tianjin, Shanghai, Chongqing, and Shenzhen). Altogether they account for 27.4% of China’s national GDP and 18.4% of its population.
The short-term goal is to establish trans-provincial and trans-regional trading schemes in transition to a national scheme by 2015. The pilot schemes begin operation from 2012/2013. Beijing, Shanghai and Guangdong launched their pilot programs on March 28, August 16, and September 11, 2012, respectively.
Australia is happy to see the roll-out of China’s emissions trading scheme. In this Asian Century, the Chinese scheme is one institutional window through which Australia can strengthen its role in regional climate policy development.
South Korea and Vietnam have also approved plans for implementing a national emissions trading scheme. Tokyo has a metropolitan ETS and India started a pilot scheme in three states. If the Chinese ETS works, one may expect other Asian national economies to follow suit. With the current efforts by Australia and New Zealand, there are some prospects for an Asia-Pacific network for emission trading.
From 2015, Australia will run a national ETS, eventually tied to the EU ETS. In the same year (if not 2016), China (and South Korea) will introduce a national ETS. This means Australia is moving forward in tandem with two key developments in the international carbon economy; that is, maturation of the world’s largest emissions trading scheme, operated by the EU, and evolution of an Asian ETS, with China destined to be a key player.
Australia would benefit from establishing bilateral or multilateral linkages with these regional schemes. Emission permits would be traded across these regions. Australian firms would be able to meet their assigned emission reduction targets by sourcing emission permits from officially linked carbon markets abroad. The regional developments could offer better trading opportunities for Australia. Ultimately this means lower costs of emission reduction.
The challenge is that China falls short of what is required for an efficient trading scheme.
A binding emission cap is a prerequisite of “cap-and-trade” mechanisms, such as an ETS. China has no national cap. Local authorities are left to set the rules as they see fit. Under the pilot schemes they have the discretion to determine emission targets and permit allocation rules, and to develop governance systems and market infrastructure. These include the emission caps for the pilot schemes.
Conceivably, there is very strong resistance from the ground. To the local officials, strong economic growth remains top priority. GDP always comes first. Pilot schemes are likely to be based upon emission intensity caps, rather than absolute caps. This situation is different here in Australia – it’s just one technical issue for bilateral linking.
There are political-economic challenges too. In China, key commodity prices, including electricity prices, are actively regulated by a central authority. Since the prices of emission permits are supposed to be reflected in commodity prices, will permit prices under the Chinese ETS actually follow market fluctuations? They are more likely to reflect political judgements, which are a source of price distortion. Synchronising carbon prices across continents would then be impractical.
Legal enforcement is another issue. The pilot schemes face considerable challenges in setting up robust monitoring, reporting and verification mechanisms. Chinese experience with trading other emissions is not very encouraging. For example, the country’s SO2 (sulphur dioxide) emissions trading schemes are predominantly based on self-reporting. Emissions are not regularly monitored. The regulatory infrastructure is far from complete and not up to international standards.
The ETS developments in Asia raise prospects for a common carbon price across the globe. Nations may be able to achieve more together through such economic mechanisms than international “talks”.
But this is Asia.
Unlike stock markets, compliance carbon markets are primarily regulation driven.
The Chinese ETS operates in a different institutional system. Not built upon a mature free market and a transparent democratic regime as we know in the western world, it is going to be a totally different animal from what we have here. Negotiations on trade terms will be highly politicised. Emissions trading schemes with Asian linking are likely to become just another venue for political struggles among participating countries.
John Newlands
tree changer
I've seen other statistics that suggest China accounted for 28% not 19% of world emissions. This week's smog in Beijing suggests there is a long way to go to reduce coal dependence. If China is intent on major reductions the negative reaction to the proposed EU airline carbon tax was surprising. Major development of Australia's Galilee coal basin is based on increasing Chinese coal imports, with one mine to be called 'China First'.
Since the West has outsourced a lot of heavy industry to China I think it is fair to carbon tax manufactured goods from China. It hurts the Western consumer and could replace generous compensation for example to Australia's steel and aluminium industries. Tax proceeds could be returned to Chinese green programs. When China reduces its annual emissions by say 5 billion tonnes of CO2 (Australia's total is 0.55 bn) then the tax on imports could be dropped. If the West doesn't do this then we are not serious about global emissions cuts.
James Jenkin
EFL Teacher Trainer
As Alex says, the system is not transparent - is there any question the statistics may not be reliable?
Iain Wicking
Director
I don't think you can take any 'stats' (environment or economic) from China as being reliable.
Ozzy Patriot
Watermelon interrogator
The sneaky Chinese are not serious about reducing their emissions. If they were they'd treat big emitters the same way they treat practitioners of Falun Gong.
Alex Cannara
logged in via LinkedIn
There are so many Chinese and so many govt. groups that some may actually not be "sneaky" and concerned with their 1 kid, relatives, even themselves...
http://globalchange.mit.edu/research/publications/2237
www.smartplanet.com/blog/bulletin/chinas-smog-hits-new-highs-and-lows/10176?tag=nl.e660&s_cid=e660
Ozzy Patriot
Watermelon interrogator
Talk is cheap. Show me one person who was tortured or had their organs harvested against their will because they put to much carbon dioxide in the atmosphere.
Alex Cannara
logged in via LinkedIn
An analysis from up here may be of interest...
http://media.hoover.org/sites/default/files/documents/CarlFedor_HooverETF2012_RevenueNeutralCarbonTaxesInBCandAUS.pdf
Peter Lang
Retired geologist and engineer
Carbon pricing can never work in the real world. Here are some reasons why
In this analysis we consider one example of the policies that would require a legally binding international agreement. The example we consider is the Nordhaus ‘Optimal’ carbon price policy http://nordhaus.econ.yale.edu/Balance_2nd_proofs.pdf. To my knowledge no one has analysed the probability that this policy could be implemented globally and achieve the expected net benefits.
The probability the chosen ‘Legally…
Read moreIain Wicking
Director
Aside from the technical it is another vehicle for the banks to game and create a new bubble so they can 'skim' more unearned wealth from the rest of us.
Lincoln Fung
Economist
What you mentioned is too complicated than necessary.
Read moreOne of the problems in international negotiations on climate change is that it has included too many details. Instead, it should be focused on important ones, such as CO2 and leave most relatively unimportant emissions out.
Further, the many problems you mentioned in the Nordhaus study/paper have the same relatively easy solutions. For example, the key for a global solution is the fairness of an agreement. Once that is achieved, participation…
Peter Lang
Retired geologist and engineer
Lincoln Fung you haven't understood the issues. If you have less than 100% participation in all GHG from all sources, all emitters and all sovereign states, the cost penalty on the participants is huge. Then you would have conflicts. Everyone knows this so they will not participate, and not should they. On top of this you have the problems of measuring emissions. The issues are enormous here too. And if you can't measure the substancve you are wanting to trade or tax, you can't trade it or…
Read moreDoug Hutcheson
Poet
"every cow, sheep and goat"? Alarmism does not help, Peter. You and I both know that carbon recycled through the biosphere does not increase the net emissions figure. It is only fossil carbon that creates the problem. Your exaggeration brings the rest of your argument into question.
Peter Lang
Retired geologist and engineer
"Livestock emissions make up about 12 per cent of Australia’s total greenhouse gas emissions or 70 per cent of our agriculture emissions. In fact, livestock are Australia’s third largest source of emissions — nearly equal to all transport emissions."
http://www.daff.gov.au/climatechange/australias-farming-future/climate-change-and-productivity-research/emissions_reduction2
Emissions from livestock have been given a temporary reprieve from carbon pricing in Australia because they cannot be measured sufficiently accurately and the compliance cost would be huge..
All sources of anthropogenic CO2 emissions would have to be included in an international GHG emissions pricing scheme eventually, otherwise the scheme cannot work.
Doug Hutcheson
Poet
Sigh. When will you admit that carbon consumed by an organism becomes carbon emitted by that organism, either in life or after death? A cow taking in carbon (embodied in grass, for instance, which in turn has absorbed it from the atmosphere very recently) and re-emitting it as CO2 or Methane is not affecting the overall carbon budget. No new carbon has been introduced to the biosphere.
Your argument seems to be that CO2 we exhale should be measured, ignoring the obvious notion that it is just the same carbon we inhaled in our previous breaths.
The problem is not with recycling carbon that is already in the carbon cycle. The problem is in digging up carbon that has been safely sequestered away underground for umpteen years and releasing it into the atmosphere, thereby increasing the total amount of carbon in the biosphere.
Alex Cannara
logged in via LinkedIn
True, Doug, to some extent. The problem is farming, which is a fossil-hydrocarbon-intensive effort, now carried on around the world.
Food for animals depends on crops grown to feed them. Those crops depend on fertilizer, made using fossil hydrocarbons. The crops also depend on fuelled vehicles for tilling, planting, weeding, spraying, harvesting & transport to markets.
Ir goes on from there. In the US, for example, methane emissions from meat production swamp those from natural gas extraction…
Read moreDoug Hutcheson
Poet
Hi Alex.
I think we agree that recycling carbon already in the biosphere is not the problem. That is what the carbon cycle does.
As you said, fossil carbon is used in manufacturing nitrogen fertilisers and FF carbon is used to power agricultural machinery and these uses are part of the problem. I was only trying to correct Peter's assertion that livestock methane emissions are part of the problem.
Carbon absorbed by grass, consumed by cattle and emitted as methane is just going round and…
Read moreDoug Hutcheson
Poet
I have posed the question of domestic livestock emissions over at Skeptical Science, to see what the assembled boffins make of it: http://www.skepticalscience.com/Greenhouse-Gas-Concentrations-Reach-New-Record_WMO.html#89676
Peter Lang
Retired geologist and engineer
Doug Hutcheson,
“Sigh!” yourself! If you make silly assertions like you did which demonstrate you haven’t a clue what you are talking about, who’d waste time answering your questions (also govenh uyou’ve made it clear you are not interested in any aswer that doesn’
Read moret tell you what you want to hear. And I notice you resort to CAGW Alarmist propaganda site to get back up for your beliefs. How pathetic. Why don’t you go to authoritative sites. Here is the DCCEE site for Australia’s CO 2 emissions…
Peter Lang
Retired geologist and engineer
Just before some pedant picks me up on my error, it is 54 Mt CO2, not 53 Gt CO2, from farting domestic livestock.
Alex Cannara
logged in via LinkedIn
Oh, so you don't have as many cows in Australia as Crocodile Dundee led us to believe?
;]
Alex Cannara
logged in via LinkedIn
Hey Doug. Yes, the real issue ios simply combustion power, which is the vast source of unnatural carbon. The rest of emissions is small potatoes.
To understand how bad we are off now, consider the Carbon Cycle can naturally handle ~200Mt of the stuff per year, recycled into seabed limestone, mostly.
We're supplying over 6000Mt/year. So for years we've swamped the natural system by ~30x.
You can check the dePaolo papers here...
http://energyseminar.stanford.edu/node/461
Doug Hutcheson
Poet
Nah, the crocs ate 'em over winter "8-)
Peter and Alex, I have been corrected over my assertion that domestic livestock only recycle carbon already in the system: my assertion is correct, but I had not allowed for the phase change from CO₂ to CH₄, which does create a forcing as CH₄ is a more powerful greenhouse gas.
The source of my correction was Skeptical Science, so I expect Peter to tell me it is wrong advice, as he has been told it is a "CAGW Alarmist propaganda site", which he would find is laughable if only he would go there to discuss the science.
Peter Lang
Retired geologist and engineer
Doug Hutcheson,
Your problem is you think a web site is good if it supports your beliefs.
You should be able to recognise it is just an alarmist web site since it is run by 'communications' specialists - i.e propaganda sepecialsists.
The headlines for their articles should be sufficient to tell you they are nothing but an extremist CAGW Alarmist site.
Doug Hutcheson
Poet
Peter, they don't support my 'beliefs', as evidenced by their correction of my mistake in not accounting for the carbon phase change in livestock emissions.
As you prefer to deride the science of AGW, I can see why you would think that a site discussing the actual science is "an extremist [sic] CAGW Alarmist site". I recommend people only go to Skeptical Science if they want informed discussion of the issues and helpful answers to their questions. I can see how you would find such a site alarming, as you fear the scientific spotlight being shone on your unsupportable assertions.
Alex Cannara
logged in via LinkedIn
Doug, you're correct to consider the systems approah -- following the carbon through chemical changes in livestock.
Nothing is as simple as first glances seem to suggest.
CH4 is also aproduct of composting and natural soil bactrial activity, so when we add in human influences, the overall picture for GHG effects gets complex.
The bottom line in some cases is that if methane is generated in any system, and can't be directed to fuel some generating system, the burn it -- burn it all. Light those cow farts!
;]
Could help locating lost members of herds at night.
Nev Norton
Farmer
You know what will happen if agriculture is included don't you? as ag sectors are predominently price takers, producers will be squeezed to collapse, you know what happens then. You all starve to death.
Though I guess that could solve AGW, just like shutting off fossil fuels would.
Peter Lang
Retired geologist and engineer
Nev Norton,
The people who want a carbon tax are not interested in the consequences. Many of them would like us to stop eating meat altogether. Some suggest we eat insects instead (seriously!).
They also are totally opposed to any rational solutions, as is frequently demonstrated by their comments on threads about global warming on The Conversation.
Nev Norton
Farmer
Yes I agree Peter, but it would also apply to cropping and horticulture and Dairy, not just meat livestock.
I am aware of the Bottom up narrow focus applied on here (TC) by some, not all, supposedly intelligent people. I have seen it frequently, and I find it disturbing.
I see it like this, there is a big flat block at the bottom called the environment, sitting on the environment block are the twin colums of fossil fuel and agriculture, and on top of that is arranged a whole pyramid of blocks…
Read morePeter Lang
Retired geologist and engineer
Nev Norton,
I agree with all this. Have you seen this recent report. It provides some excellent 'meat on the bone' in support of your comments:
"Humanity Unbound: How Fossil Fuels Saved Humanity from Nature and Nature from Humanity"
http://www.cato.org/publications/policy-analysis/humanity-unbound-how-fossil-fuels-saved-humanity-nature-nature-humanity
Lincoln Fung
Economist
Looking at the air pollution in China including in Beijing recently it is clear that China has a huge task in dealing with environment.
It also points to priorities in its task in terms of benefits and costs of analysis to determine what is most urgent and what can be left for a different time.
Peter Lang
Retired geologist and engineer
Lincoln Fung,
You are confusing air pollution and CO2. They are not the same thing. Policies to cut CO2 do not address the pollution you are referring to. You need to understand the difference.
Lincoln Fung
Economist
But once a different thinking is adopted, it is a whole different story.
Why is it so difficult to reach an international agreement, given in economics the principles and methods are so clear for a solution? The reason is that applying the economically sound principle and method would mean the rich and powerful countries would have to pay more, much more because they emit more on the per capita basis and powerful countries would not like to do it. That is why the US has refused to do Kyoto, that has caused a serious other problems, including developing countries refusal to commit to a legally binding regime for them.
Lincoln Fung
Economist
Now large developing countries are strong enough to resist the pressures from powerful countries to a unfair agreement.
Effectively, it is a loss-loss situation, unless powerful countries realise there must be a fair agreement.
Peter Sommerville
Scientist & Technologist
Pardon the cynicism but this article reads like an Apologia Pro Vitae Sua. The fact is, China's emissions are increasing and increasing rapidly, because of decisions already made. The rest is pure window dressing, Chinese style.
Peter Lang
Retired geologist and engineer
Peter,
You wouldn't be expecting China to9 stop doing it can to lift its people out of poverty would you? And India, and Indonesia and the rest of Asia, Africa and South and Central America.
The fact is, ther will be an embourmous amount of GHG emissions this century unless that "Progressives' stop blockoing progress. It is squarely in their court to stop demanding the policies they advocate: regulation, central control, legally binding international agreements, carbon pricing and the rest of what they demand. These are bad policies and the opposite of what is required.