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I have a new post up at the University of Nottingham’s China Policy Institue Blog. The post is a critical examination of how we define and diagnose China’s – and the world’s – environmental governance challenges.

During China’s annual two sessions meeting in March, delegates gave low approval ratings to the Supreme People’s Court and the Ministry of Environmental Protection. Granted, China’s judicial system and its environmental governance regime leave much to be desired. But attributing such shortcomings to these two government bodies alone is derived from either a serious misunderstanding of China’s governance system or counterproductive finger pointing that obscures the root problems. More 

 

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NDRC Hints at Forthcoming Energy and Environment Goals in the 12th Five Year Plan

China Daily – More policy tools are being worked out to encourage energy conservation and the use of renewables to propel the development of China’s energy-saving industries, an official from the National Development and Reform Commission (NDRC) said.

In the meantime, a “responsibility system” has been developed to hold various government agencies to account for national and regional targets in energy saving and emission reduction. As a result, they have rolled out their own policies and matching technological solutions, Xie said.

The (Clean Energy) Revolution Will Not Be Patented

Slate – The last few years have seen perhaps the largest energy technology transfer in human history. In 2004, China paid about $5 billion for four state-of-the art nuclear reactors from Pennsylvania-based Westinghouse Corp. In exchange, Westinghouse agreed to transfer the technology and know-how to Chinese state-owned firms. French state-owned company Areva lost out, because it refused to turn over its intellectual property. Now China is set to use Westinghouse intellectual property to build an additional 28 nuclear plants based on the same technology.

Why Has the Fixed-gear Fashion Bike Craze Skipped China?

Slate – this bike-saturated nation has—so far—managed to skip entirely what is arguably the biggest global bicycle fad in a generation: the fixed-gear. And the absence is notable. Despite the rise in car ownership, China remains the world’s largest bike market, with 51 million sold in 2009, according to the China Bicycle Association.

China’s New Dam Seen as Water Hog

USA Today – Wearing cloaks of tree bark strands, villagers from the Yi ethnic minority tend wheat terraces that cascade downhill toward the riverbank. It is a scene unchanged for centuries, and it takes place in the shadow of a modern wall of concrete as high as a 66-story skyscraper that fills a gorge of the Lancang River in remote southwestern China.

The Xiaowan dam in the hills of Yunnan province is one of eight hydroelectric projects that will bring China’s industrial revolution to the impoverished region. It is by far the biggest of the four dams built so far that when done this year will be the biggest arch dam in the world.

Kunming Environmental Court Establishes Public Interest Litigation Fund to Encourage Law Suits Greenlaw has more

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(Update II: You just gotta love the nuances of state run media. China Daily just ran Mr. Lomborg’s piece (at least online), but changed the title to “Two Cheers for China for its Stand at Copenhagen.” The fact that the China Daily chose to run this might be the closest thing to an admission from China that Ed Miliband, UK’s climate negotiator, was right when he said that there was “impossible resistance” from China to a global carbon mitigation deal (the language used by Lomborg and by association China Daily) . Granted, this does not mean that China is not pursuing low carbon options, just that they won’t do it if that means strong international commitments or threatens their pursuit of the holy-GDP-grail.

It is also noteworthy that the editors did not comment on Lomborg’s erroneous numbers. Lomborg claims that “[r]enewable sources like wind and solar meet just 0.2% of the China’s energy needs…” Well according to China’s National Energy Administration, 8.3% of China’s energy consumption came from renewable sources in 2009 (this does include hydro). In 2009, Caijing reported 50 GW of installed wind capacity in Inner Mongolia alone, though far less made it onto the grid. The same Caijing article cites NDRC and notes that 0.45% of China’s total electricity production came from wind in 2008, double Lomborg’s figure. And note also China’s goal of 150 GW of wind, 20 GW solar and 300 GW of hydro by 2020. Point being, China has expended a fair amount of energy burnishing its clean energy credibility over the past few years and it is hard to understand why the Party’s English mouthpiece would put its backing behind Lomborg’s obstruction.)

This post is in response to a recent piece by Bjorn Lomborg, in which he argues that instead of increasing the price of fossil fuels the world should just spend more on clean energy R&D. In pure Lomborg fashion he titles the piece “Two Cheers for China’s Climate Obstruction” and begins with sensationalist flare on the hopelessness of achieving a global climate agreement and his own numbers that prove the impossibility of meaningfully reducing fossil fuel use.

It is one thing to note that China has rational arguments for obstructing climate negotiations, Cass Sunstein has done a good job at that. But it is another thing to congratulate China for its obstructionism; not even the most boastful of heads within Zhongnanhai are that brash. But Mr. Lomborg is to be forgiven to some extent. Living in modern Denmark with its vibrant bike lanes, windmills, and clean air, it is easy to forget the environmental and economic harm that a heavy reliance on fossil fuels can cause.

It would be too much to expect Mr. Lomborg to fully grasp just how America’s heavy addiction to fossil fuels has resulted in lost economic opportunity, lost lives and high health care costs. Not to mention the environmental and human health costs China is experiencing. Perhaps this short summary on externalities from the WSJ’s Keith Jackson will remind Mr. Lumborg of why increasing the cost of fossil fuels is important in getting the real economics right.

To take a single example: The price that American drivers pay at the pump, frightening as it is these days, does not reflect the cost of oil and gasoline. There are additional costs to the reliance on oil that simply don’t show up in the twirling numbers at the gas pump, whether they are the environmental costs of oil extraction, transport and combustion, or the cost of U.S. military engagement to protect oil supplies and keep vital sea lanes open.

For economists, all these hidden costs are called “externalities.” They’re as real as they are hard to spot, from the Fifth Fleet’s operating expenses to the pernicious health costs of a coal-fired electricity sector.

For policymakers, these externalities represent an opportunity as much as a headache. For all the worries that a bigger role for government in the energy business—from cap-and-trade schemes to solar-power subsidies—represents a retreat from free markets, that’s hardly the case. Energy markets aren’t “free” today, and the playing field is anything but level.

New energy policies that seek to redress those problems, and unleash rather than further stifle a genuine market for energy, will point the way toward a new energy future that makes sense, both environmentally and economically. That’s because, if new policies set out to tackle those externalities once and for all, the environmental answer will quite often become the economic answer. Everything has its price—and its cost.

But perhaps Mr. Lomborg would be better persuaded by investors with real money for clean energy R&D.  In which case, here is a statement from investors who represent $13 trillion asking the US and other major nations to please put a price on carbon so that they can begin to invest in clean energy with confidence.

Luckily China’s leaders, as Tom Friedman often points out, understand the dangers that a continued reliance on fossil fuels presents and the benefits of clean energy. And while it is true that Beijing has an interest in doing all that it can to maintain breakneck economic growth, the fact of the matter is that the world cannot allow that to be done with ever growing GHG emissions. Slowing the growth of emissions is both an economically and morally defensible insurance policy. Granted, the US and China still have a long way to go before a meaningful insurance policy can be achieved. But Mr. Lomborg’s dismissal of internalizing the real costs of fossil fuels as a part of the solution and lauding China’s selfish motivations for obstruction, does not help achieve the goals that the international community has agreed to in the Copenhagen Accord.

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