12/09/2009 - 08:08

A thought for Copenhagen and beyond

Kurt Zenz House

Kurt Zenz House

House is the Chief Executive and a co-founder of C12 Energy. For nearly a decade, House has studied the physics, chemistry, and economics of capturing and storing anthropogenic carbon dioxide in...

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Much has been written in anticipation of the current meeting of diplomats and international climate change experts in Copenhagen. Indeed, these men and women deserve our gratitude because forging and implementing an international agreement to curb greenhouse gas emissions is one of the most intractable problems that humanity has ever faced.

Once China decided to engage the world, its economic growth formula was straight forward: sell to developed economies what they want for less than they would spend to make those things."

Global warming is particularly challenging because it's the tragedy of the commons on a global scale, and as such, it combines all the elements of hard-to-solve, collective-action problems. Humanity has, of course, solved such problems before. Most notably, the 1989 Montreal Protocol phased out the use of chloro-fluoro-carbons, which were used as refrigerants but also contributed to ozone depletion. However, that was a walk in the park compared to mitigating climate change. Carbon dioxide (CO2)--the primary greenhouse gas that contributes to climate change--is a direct product of 85 percent of global energy conversion. The global energy system--and therefore, the global economy--is based primarily on the production of CO2. As a result, getting countries as diverse as France and Saudi Arabia to agree to a treaty to change the global energy market is an immense challenge.

That said, the world did come to an agreement on climate change in Kyoto in 1997, and there is reason to be hopeful for a new agreement in Copenhagen--or in Mexico City at next year's meeting of the signatories of the U.N. Framework Convention on Climate Change. But for an agreement to materialize, several important steps must be taken. And China is particularly important to many of them.

It is cliché to describe the economic growth in China as miraculous since Beijing's economy has grown--at market exchange rates--by more than two orders of magnitude since market-based reforms started under Chinese leader Deng Xiaoping in 1978. Due to this dramatic economic growth, it is expected that China will surpass Germany as the world's largest exporter this year, and that in 2010 China will surpass Japan as the world's second-largest economy. In short, China has gone from a slow-growing, insular country to the world's second-largest economy and largest exporter in a single generation.

Commensurate with China's economic growth has been its growth in CO2 emissions, and in 2008, China surpassed the United States as the world's largest emitter of greenhouse gas emissions. So if Beijing doesn't partake in real climate mitigation, the hard work of other nations will be marginalized.

Of course, discussing climate agreements usually raises the question of differential responsibility. That is to say, the majority of greenhouse gases currently in the atmosphere were put there by the developed countries, and thus, developed countries should incur a larger percentage of the mitigation costs.

Differential responsibility is real, and I agree that the developed countries should agree to act first--something that is starting to happen. The European Union is prepared to commit to 20 percent reductions below 1990 levels by 2020; Japan will commit to a 25 percent decrease; and the United States is expected to commit to a reduction of 17 percent of current emissions by 2020.The U.S. commitment is smaller than most countries were hoping for--largely a result of the Bush administration's abandonment of its Kyoto obligations. Nevertheless, the Copenhagen announcement will be the first serious reduction commitment made by the United States.

On the other hand, China will offer a trifling 40 percent reduction in greenhouse gas intensity--i.e., the mass of greenhouse gas emissions per dollar of gross domestic product--by 2020, which is essentially an extrapolation of the current trend. Basically, it represents no real incurred cost. This insignificant commitment will be justified by differential responsibility.

But here is where I disagree with the conventional wisdom. China's miraculous economic growth was facilitated by the existence of large, stable external markets to which Chinese exports were sold. Once Beijing decided to engage the world, its economic growth formula was straight forward: sell to developed economies what they want for less than they would spend to make those things. This symbiotic relationship has been beneficial for both parties: Developed countries can buy what they want for less, and China has huge markets for its goods.

The main point is that China's economic growth over the last 30 years was largely facilitated by the economic development in the West over the last 100 years. In other words, U.S. emissions 50 years ago helped create the market for Chinese goods today. Thus, the arithmetic of differential responsibility isn't as easy as summing up everybody's emissions over time. Considering this, it's time for China to come to the table and offer a commitment commensurate with its responsibility as a new emitter and economic power.