US-China Carbon Pact Relies on Clean Technologies Helping Corporate America

by | Apr 4, 2016

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Calling their quest to conquer climate change a “pillar” of the relationship, the White House says that this country and China will ink a deal on April 22 — Earth Day — that formally advances their mutual cause. The goal, it says, to get a grip on global warming before it is too late.

Man-made climate change, in reality, is largely a function of Western industrialization. And now those richer countries are asking China to clamp down on its use of coal, which is abundant and inexpensive relative to its other fuel options. It is on board, albeit China won’t see much of a let up before 2030, while the United States has been aggressively trying to mitigate its carbon releases.

“The Presidents recognize that the Paris Agreement marks a global commitment to tackling climate change and a strong signal of the need for a swift transition to low-carbon, climate-resilient economies,” says the formal release, issued last Thursday. “The joint efforts by China and the United States on climate change will serve as an enduring legacy of the partnership between our two countries.”

In 2014, President Obama and President Xi Jinping entered into a non-binding bilateral accord. In 2015, they had fleshed out that agreement, as well as how China would finance the technologies to make it all possible. The two countries want to lay the framework for how others that have doubts may also proceed — a pact that requires the world’s biggest emitters to adopt the “COP21” plan.

The United States and China are the two biggest carbon polluters, accounting for about 40 percent of such releases. As for this country, President Obama’s Clean Power Plan — now under legal challenge — would cut carbon emission levels by 32 percent by 2030, from a 2005 baseline. Already, the United States is nearly halfway there because coal plants are getting retired and being replaced mostly with those that run on natural gas, which emits half the carbon that coal does.

China’s coal generation now accounts for about 65 percent of its electricity portfolio. That country’s goal is to cut its coal usage to 50 percent of energy mix by 2050. Regardless of China’s energy diet, it still has an insatiable appetite for the fuel source, consuming 47 percent of all coal and as much as the rest of the world combined, says the U.S. Energy Information Administration.

For its part, China also has a goal of generating 15 percent of its electricity from green energy by 2020 and 30 percent by 2030. But it will still need other carbon-intensive fuels, which include coal and natural gas. Therein is the challenge and the potential reward: developing new technologies that will cut those emissions. If it works for corporate America, it can work for corporate Europe, or the developing world. Sharing the wealth, though, may be problematic.

The ultimate answer to cleaning the environment — whether that be through better coal technologies or through more renewables — is modern technology. In a conversation with Tim Profeta, director of the Nicholas Institute for Environmental Policy Solutions at Duke University, he said that placing a cost on carbon would facilitate the effort.

“Our public sector should encourage us to become the patent holder and exporter of those technologies that do not emit carbon,” Profetta had told this reporter earlier. Utilities such as Southern Co. have said it would like to export its own advanced coal technology around the world.

Consider: Some 80 percent of the world’s energy comes from coal, oil and natural gas and the Energy Information Administration says that number is not going to fall below 65 percent. In 2040, it says that coal will still make up 35 percent of the global electricity supply — a fuel responsible for one-third of all man-made carbon emissions.

Okay, how will the finance agreements work — the ones that allow the developing world to buy western technologies to mitigate their carbon releases?

Generally speaking, the developed world says that it will provide $20 billion to the less-developed countries to help finance their clean technology investments. At the same time, private benefactors such as Microsoft’s founder Bill Gates, Facebook’s Chief Executive Mark Zuckerberg and investor George Soros have started the so-called Clean Energy Fund, which is promising to aid that effort.

The ultimate goal is to limit the rise in global temperatures to no more than 2 degrees Celsius this century, using pre-industrial levels as the benchmark. Possible? If countries live up to their non-binding targets, it will be. However, experts are fearful that global population growth along with economic expansion will mean temperature increases of as much as 3.6 degrees Celsius.

Altogether, BP projected in its 2015 outlook a 37 percent increase in energy consumption worldwide, which would lead to a 25 percent jump in carbon dioxide emissions, all by 2035. That’s notably more what climate scientists say is safe and to avoid such catastrophic events as rising sea levels, prolonged droughts and aberrant weather conditions.

“China has been strengthening its green and low-carbon policies and regulations with a view to strictly controlling public investment flowing into projects with high pollution and carbon emissions both domestically and internationally,” says the joint statement between the White House and China.

Reducing carbon and limiting the effects of climate change is a daunting challenge. But the best path forward is the creation of new technologies — ones that are proving beneficial to America’s environmental and energy managers and ones that could also benefit Chinese corporations.

Ken Silverstein is editor-in-chief of Business Sector Media, publisher of Environmental Leader and Energy Manager Today.

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