Submitted by Experience Not Logic Blog

William Chandler has an interesting article at the Carnegie Endowment entitled, “Breaking the Suicide Pact: U.S.–China Cooperation on Climate Change.” The suicide pact to which he refers was coined by Joe Romm who said that we’re not going to come to a climate change solution because the two largest carbon emitters in the world are at loggerheads. The Chinese say that Americans individually pollute a tremendous amount and have been doing so for decades so the Americans have to fix the climate change problem. The Americans says that Chinese emissions are growing so rapidly that this growth must be responsible for climate change so the Chinese must take action. Though applying the laws of physics to social sciences may be a mistake, it seems that inertia takes over when each side blames the other and cooperation on valuable climate change initiatives will remain at rest. Fortunately, Mr. Chandler has some recommendations to break the loggerheads, reverse the inertia, and guide the US and China down the path of fruitful climate change cooperation.

Mr. Chandler’s recommendations are conditioned upon Chinese and American policy-makers finding “a deeper understanding of energy realities; grasp[ing] the need for immediate action to reduce carbon emissions; and develop[ing] a new, non-treaty-based approach to reaching an international agreement.” The deeper understanding that he refers to is the realization that Earth’s environment cannot handle a billion more Americans. Frankly, we use A LOT of energy, and as China becomes more middle class, the nouveau milieu are going to want to spend their disposable income on such toys as cars and computers and products that require energy intensive manufacture. Basically, they’ll be using more energy. Action needs to be taken by both the US and China to reduce energy intensity so that current Americans’ energy use decreases and the energy use of Chinese in the future will be lower than it otherwise would be.

Mr. Chandler has several recommendations on where to begin cutting:

• Cuts in industry including the use of cogeneration and more efficient devices.
• Tougher automobile emissions controls from the pair of countries that manufacture some of the most inefficient automobiles in the world.
• Greener commercial building tech. One area where the US is dominant is window technology where China could do a lot to catch up.
• Greater reliance on natural gas and nuclear.
• Greater efficiency. The US in general, and California in particular leads the world with its virtually unique consumer appliance efficiency standards.

To help in cutting, Mr. Chandler suggests that the US and China need to back away from their “perverse policies” and adopt energy policies that look to curb emissions. Here is a list of his “perverse policies”:

• Chinese intervention in energy pricing has actually made energy prices more not less expensive.
• US subsidies to gas and oil producers encourages expansion of these high-emitting energy sources.
• Chinese sponsorship of “massive, inefficient” SOEs encourages growth of coal-burning facilities and discourages innovative companies from effectively competing.
• US regulators set retail prices at the average cost of power rather than the marginal cost which gives a greater than free market return to power companies.
• China needs to adopt US style appliance efficiency standards.
• Chinese controls on foreign investment creates transaction costs, “inadvertently blocking a vital pathway for investment in energy efficiency where it could make the most difference.”
• Though China’s central government is committed to clean renewable energy, this “has not been translated into tangible incentives at the provincial level.”

Rather than rely on Kyoto, or Bali, Mr. Chandler suggests that:

“China and the United States could cooperate to set individual, national goals and then work together to achieve them through domestically enforceable measures and international agreements that prevent either nation from taking advantage of steps taken by the other.”

Mr. Chandler writes that:

“Cooperation could be organized in three priority areas: deployment of best practice technologies, innovation in new technologies, and agreements to prevent the two countries from taking advantage.”

Unfortunately, I think this is where Mr. Chandler starts running into problems. I support Mr. Chandler’s solutions for cooperation and hope that they are aggressively lobbied for. They are pragmatic and truly stress cooperation, but I wonder if they are possible.

The “deployment of best practice technologies” can be helped by tax breaks for best practice technologies and looser investment regulations, as Mr. Chandler suggests. The big problem is getting business leaders to cooperate by “by working with both governments to solve problems impeding the market application of existing technologies.” Which business leaders? What if the best practice technology is not the best for their bottom-line, do they invite shareholder lawsuits? Is it understood that the government will implement policies to encourage the technologies so that the business leaders don’t have to worry about breaching fiduciary duties? Can we trust business leaders to act fully in the interest of reducing climate change at the possible expense of their corporation’s coffers? Bringing business into the mix is necessary, but dangerous.

The “innovation in new technologies” priority area relies on US state representatives, hopefully from California, heading to China and assisting provincial governments in developing similar efficiency programs. Great idea! But who will pay for it? Would the pride of local politicians scuttle the help? When US state politicians can’t always agree on the best policies, how are they going to have the authority to presume to help China’s provinces? It is worth a try, but it could be costly.

And, Mr. Chandler points to a general unwillingness from both Congress and Beijing to finance and work together in developing tech and testing it in the market place. Asking Congress to become a scientist is a tall order, but I suppose that it is necessary.

We need to grow closer as nations before we can cooperate, and costly programs might increase tensions rather than loosen them. Mr. Chandler acknowledges this when he writes, “A global climate change agreement will first require accommodation between the United States and China.” Whether this accommodation grows from realizing that cooperation in addressing climate change should be “considered an act of mutual self-preservation,” or something else, Mr. Chandler makes a good point that the US and China need to find some way to cooperate on climate change rather than simply playing the blame game that will hurt us both in the long term.