CHINA CALLS FOR STOP TO EMISSIONS RENDITIONS

China seeks export carbon relief
17 March 2009 (BBC News)
and
US should consider duties on polluting nations-Chu
Ayesha Rascoe (w/Jim Marshall), 17 March 2009 (Thomson Reuters)
and
China minister rejects U.S. carbon tariff idea
Paul Eckert (w/Cynthia Osterman) March 18, 2009 (Reuters)

SUMMARY
Li Gao, China’s lead climate change negotiator, proposed that importers of goods, not the manufacturers, be held accountable for the emissions generated in the export goods' production.

China, the world’s biggest emitter, generates 15-to-25% of its greenhouse gases (GhGs) making goods for export to the develped world. If emerging economies did not do this emissions-intensive manufacturing, the nations where the goods are consumed would either suffer the burdens of the GhGs or be forced to change their habits.

If the coming global emissions-reduction plan holds China solely responsible for GhGs emitted in the manufacturing of goods consumed in other nations, it will likely drive China's power prices up and render a blow to China's economy. China (and other emerging economies such as India and Indonesia) will refuse to participate in such a plan, rendering it impotent against global climate change.

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Li announced China's position at a meeting with U.S., EU and Japanese climate change negotiators hosted by the Pew Center on Global Climate Change in Washington, D.C. They met to prepare for the December Copenhagen world summit at which a new world agreement on global action to fight climate change will be finalized.

It is hoped the Copenhagen treaty will, unlike the expiring Kyoto Protocol it will replace, include the U.S. and China in active roles in the emissions reduction effort.

China suggested its exports be exempted from any agreement reached in Copenhagen.

U.S. Secretary of Energy Steven Chu’s suggestion was to use a tariff to goods imported from China and other emerging economies that would account for the cost of the emissions generated in their manufacture. He said this would keep U.S. goods competitive with those made at a lower cost that did not account for emissions.

Li called Chu’s proposal protectionist and rejected it, saying the U.S. needs to focus on its own emissions rather than China’s.

Chu said he hopes nations like China and India, whose emissions are growing much faster than those of the U.S., will be able to participate in the world’s effort to reverse global climate change.

Rendition is the practice getting somebody else - like China - to do the dirty work. (click to enlarge)

COMMENTARY
- China enters the climate change debate with a slight moral advantage over the U.S. because it participated in the Kyoto agreement, though with a developing economy exemption allowing it to ignore emissions reductions. The U.S. is one of the few nations in the world that did not participate in the Kyoto agreement.
- China’s suggestion reflects its attitude that it should not be limited in its economic development by climate change considerations.
- Chu’s suggestion reflects his commitment to the market-based GhG-reduction program incorporated in the EU’s cap&trade system and expected to be part of the climate change legislation pushed by the Obama administration.
- The U.S. cap&trade legislation is expected to put a cost burden on emitters that will generate federal revenues with which (1) New Energy and Energy Efficiency programs and infrastructure can be built and (2) the burden of higher short-term power prices can be offset for taxpayers.
- Pointing out that the GhGs now in the atmosphere and causing global climate change were generated as economically developed nations amassed wealth and power, China has repeatedly stressed that its reluctance to participate in the global effort against climate change is because it wants the opportunity to likewise develop its own economy and amass its own wealth.

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- Representatives of developed economies that import inexpensive Chinese goods believe it would be extremely challenging logistically to enact China’s suggestion of applying the GhG burden of China’s exports in consuming nations.
- The bookkeeping logistics of applying emissions costs to imported Chinese goods would, it should be pointe out, likely be more convenient than dealing with the worst impacts of global climate change.
- Secretary Chu’s proposal (made at a hearing of the House Science and Technology Committee and not in direct negotiation with the Chinese representative) makes it clear that the point of an international agreement is to put a price on emissions to discourage consumption of goods whose manufacture is GhG-intensive.
- The 2 questions: Would tracking Chinese imported goods and applying a price burden on consumers exert economic leverage to reduce Chinese emissions? Does China want to give up control of that economic activity?
- A Chinese expert has suggested the issue of import tariffs and the issue of emissions be worked out separately. This is exactly counter to Secretary Chu’s argument that they are inextricably intertwined.

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QUOTES
- Li Gao, lead climate change negotiator/director of the Department of Climate Change, China: "About 15 percent to 25 percent of China's emissions come from the products which we make for the world…These products are consumed by other countries... This share of emissions should be taken by the consumers but not the producers …”
- Li, on the parameters of the Copenhagen agreement: "It is a very important item to make a fair agreement…We are at the low end of the production line for the global economy…We produce products and these products are consumed by other countries, especially the developed countries. This share of emissions should be taken by the consumers but not the producers…"

China's New Energy ambitions are admirable... (click to enlarge)

- Li, on the proposed U.S. tariff on goods imported from nations that have no restrictions on emissions: "If developed countries set a barrier in the name of climate change for trade, I think it is a disaster…"
- Artur Runge-Metzger, climate change negotiator, EU, on the Chinese proposal: "[It] would mean that we would also… have jurisdiction and legislative powers in order to control and limit [China’s emissions]…I'm not sure whether my Chinese colleague would agree on that particular point…I think the issue here is we take full responsibility and we... regulate all the emissions that come from our territory…"
- Shinsuke Sugiyama, chief negotiator, Japan: "Japan will not repeat Kyoto…At Kyoto we were not able to involve the biggest emitters in the world by now - and that means the United States of America and China…"
- Steven Chu, U.S. Secretary of Energy: "If country X doesn't do this then I think we should look at considering perhaps duties that would offset that cost…"

...But something has to be done about the coal. (click to enlarge)

- Xie Zhenhua, Climate Change and Coordinating Committee head, China: "Climate change and charging carbon taxes in imports ... are two issues in two areas…I oppose using climate change as an excuse to practice protectionism on trade…"
- Xie Zhenhua, Climate Change and Coordinating Committee head, China: "China is not a country that does nothing…On the contrary we have done a lot…The United States is in the same boat. They just talk about it but there are no actions, and we don't even know whether Congress will pass it…"