Beijing’s CBD on Saturday, when the pollution was near its worst…

… and today (Wednesday), when the severe air pollution of the last few days began to mitigate. The China World Tower, Beijing’s tallest building, is barely visible on the left side of the hazy photo.

The haze of the last few days has been widely covered by Chinese media, with mainstream media outlets declaring the need to take actions to address pollution in China and urging the public to stay inside and to wear face masks when outside to protect themselves from the pollution. On Tuesday morning, Li Keqiang, China’s premier-to-be, addressed the haze, stressing that the air pollution was a long-term problem that required a long-term solution and vowing to take action and increase enforcement of environmental protection. He also voiced support for the government’s timely and accurate public reporting of PM 2.5 levels, based on the new air quality standards that took effect January 1st in 74 key air pollution cities. (Hourly air quality data for these cities can be checked via the China National Environmental Monitoring Centre website.)

In Beijing, the Environmental Protection bureau took emergency measures to address the haze, including halting outdoor activities for primary and middle school students, suspending construction at 28 construction sites, reducing emissions by 30% at 58 factories, and taking up to 30% of government vehicles off the road. 

The cause of the haze and how to address it short term and long term

While the haze the last few days has been of a much more extreme nature and of a longer duration than ever before, the root causes of this particularly severe episode can be traced to existing emissions sources, coupled with a weather “inversion” that trapped the pollution and allowed it to accumulate, rather than allowing it to blow out.  (See this helpful China Dialogue article.) The usual suspects are pollution such as sulfur dioxide and nitrogen oxide from coal combustion, which provides 70% of China’s energy and 80% of its electricity, and is primarily used by coal power plants, heavy industry such as iron and steel and cement factories, and for residential heating in the winter; emissions from vehicles, particularly heavy vehicles such as trucks; and dust from construction sites. In other words, fossil fuels, particularly coal and oil. (You can see just how reliant northern China is on coal and oil on NRDC’s China Climate and Energy Map — click on the coal and oil buttons on the left.)

Map of coal consumption in 2010 by province, showing the areas of highest coal consumption in the north of China. Image via the China Climate and Energy Map. 

In the short term, cities such as Beijing have begun to develop and implement air pollution emergency response measures, such as shutting or slowing factories and limiting car use, and will be improving forecasting of weather conditions that can lead to severe air pollution and measures to inform the public so that people can take protective measures. The new pollution reporting standards which take wider effect in 74 cities starting this year and include hourly PM 2.5 reporting are an important step in improving the availability of pollution information so that the government, enterprises and the public can take action to improve air quality and protect themselves from pollution.

In the longer term, however, China’s persistent regional air pollution problems require a more systematic and sustained approach that includes:

• Strengthening monitoring and enforcement of pollution removal equipment such as SO2 scrubbers and NOx removal equipment for coal power plants and factories. (Emissions standards for coal power plants were strengthened last year, as my colleague Barbara Finamore blogged on);  
• Expanding the use of low-sulfur fuels and emissions systems for vehicles, particularly for heavy vehicles such as trucks and buses. Vance Wagner from ICCT has written on the need to move without delay to less-polluting China IV fuels and emission systems and to put in place a timeline for global best practice China VI standards;
• Shifting China’s industrial structure away from heavy industry and towards less-polluting industry and services, a goal that has so far eluded policymakers. And of course, greater energy efficiency in industry, building, appliances and vehicles, so that we use less electricity and burn less coal and oil in the first place, is also key.
• Improving regional efforts to address air pollution, particularly in key air pollution regions. The Ministry of Environmental Protection released its “Twelfth Five Year Plan for Air Pollution Prevention and Control in Key Areas” (see Chinese here) in December, which sets targets for reduction of key pollutants by 2015 such as reducing PM 2.5 in the Beijing-Tianjin-Hebei region and the Yangtze and Pearl River Deltas by 5%. It also emphasizes joint regional coordination and management of air pollution by city and provincial governments.

Fundamentally, China needs to shift its energy supply structure away from its heavy reliance on polluting coal by increasing the use of cleaner-burning natural gas and non-polluting renewable energy sources such as wind and solar. On the renewables front, China has a goal of increasing its use of non-fossil energy to 15% of primary energy consumption by 2020, has greatly increased wind power over the last several years, and in the last few months has announced new policies and targets to greatly expand the use of solar PV, particularly distributed roof-top PV.

Establishing a coal consumption cap policy that would limit the use of and growth of coal in key air pollution areas would add an important policy lever to existing policies such as China’s energy and carbon intensity targets and plans to implement a total energy consumption target. China consumed 3.6 billion tons of coal in 2011, half the world’s coal consumption, and there are proposals to build some 558 GW of new coal-fired power plants according to a recent WRI global coal risk assessment (a 73% increase over China’s 2011 thermal power plant capacity). Such continued growth in coal consumption is simply unsustainable, no matter how many scrubbers are operating on power plants.

Limiting the growth of coal is a key part of addressing China’s energy and pollution challenges. The Ministry of Environmental Protection is already engaged in planning coal consumption cap pilots in the key regions of Beijing-Tianjin-Hebei, the Pearl River Delta, Yangtze River Delta and Shandong city cluster as part of its “Twelfth Five Year Plan for Air Pollution Prevention and Control in Key Areas.” Establishing a coal cap in these areas will increase the use of more efficient and cleaner technologies such as renewables and combined heat and power, and provide an example for how coal use can be controlled in other regions.

Addressing the root causes of China’s severe air pollution will not be done overnight, but a long-term problem requires a long-term solution, one that can effectively and permanently clear the haze today and for generations to come.

In China and other developing countries, increasing electricity demand and concern about pollution from coal-fired power and its impact on climate change have led policymakers to focus on expanding nuclear power as a source of electricity. Before the March 2011 Fukushima nuclear disaster, China had been undertaking the world’s largest nuclear power plant construction program, with plans to expand its then approximately 11.5 GW of nuclear power to as much as 80 GW of nuclear capacity by 2020. (Given that current reactors are about 1 GW in size, this would be equivalent to building nearly 70 reactors over a decade.) In expanding at this pace, China was projected to meet its 2007 “Nuclear Power Medium- and Long-Term Development Plan (2005-2020)” target to have 40 GW of nuclear power capacity in operation by 2020 a full five years early, by 2015.

Map of nuclear power plants in operation and under construction

Following Fukushima, however, Beijing immediately suspended approval of all new nuclear power projects while it undertook a comprehensive safety review of existing and under-construction nuclear power plants, as well as research reactors and fuel cycle facilities, and developed its Twelfth Five Year Plan for Nuclear Safety. In June 2012, after gaining approval of the State Council in principle, the National Nuclear Safety Administration released drafts of the Nuclear Safety Plan (Chinese here) and the “Report on Safety Inspection of National Civilian Nuclear Facilities” (Chinese here) for public comment.

As discussed in the Safety Inspection report, the safety inspection took over 9 months and covered 11 areas of safety, including site selection and external event evaluation; flood and earthquake resistance capacity; extreme natural disaster prevention and protection; electricity blackouts and emergency plans; severe accident prevention and mitigation; environmental monitoring systems; and emergency response system effectiveness.

The report concluded that operating reactors “basically fulfill” China’s nuclear safety laws and regulations and the International Atomic Energy Agency’s most recent standards, that they have the capacity to respond to design-basis accidents and severe accidents, and that safety risks are under control. However, in spite of these conclusions, the inspection report and nuclear safety plan also identified areas for improvement. In particular, the nuclear safety plan lays out short- (by the end of 2012), mid- (by the end of 2013) and long-term (by 2015) tasks to strengthen safety for operating and under-construction plants, research reactors and fuel cycle facilities.

For example, short-term tasks for operating reactors included inspecting and waterproofing all openings, electric cable lines, etc.; ensuring cooling functions for the reactor core and spent fuel in the event of a blackout, through mobile generators and pumps; and ensuring the effectiveness of seismic monitors and strengthening capacity to respond to earthquakes. Medium-term tasks include strengthening flood response measures; re-evaluating earthquake and tsunami risks for coastal plants and undertaking necessary changes; establishing and implementing severe accident management guidelines; evaluating and implementing improvements to respond to severe accidents and hydrogen explosions; and establishing response plans for multi-reactor emergencies. The long-term task for operating reactors is to undertake probabilistic safety assessments for external accidents. It is vital that these short, medium and long-term tasks are implemented and that the steps taken to improve safety are reported to the public. (See the excellent analysis of the inspection report and safety plan by Zhou Yun of Harvard’s Belfer Center.)

In addition to the measures to improve the safety of nuclear power plant facilities, the nuclear safety plan also discusses changes needed to improve the regulation of nuclear power safety in China. NRDC has been advocating for changes to strengthen the regulatory capacity and role of China’s National Nuclear Safety Administration, having held a workshop in June 2011 on strengthening nuclear safety post-Fukushima and publishing recommendations in various Chinese media outlets for strengthening China’s regulatory system. We were thus pleased to see that a number of the changes called for in the nuclear safety plan echo our recommendations for strengthening China’s nuclear safety regulatory system, including that China:

1. Rationalize the duties and functions of nuclear safety management among the various agencies responsible for nuclear power in China;
2. Strengthen the independence, authority, and professionalism of the nuclear safety regulatory body;
3. Strengthen the capacity and expertise of the nuclear safety regulatory body;
4. Ensure appropriate checks and balances on the power of the nuclear safety regulatory body;
5. Strengthen the establishment of nuclear safety culture, increase transparency of nuclear and radiation safety information, and establish mechanisms for public participation;
6. Strengthen nuclear safety laws and regulations and pass the “Atomic Energy Law” as soon as possible;
7. Establish a nuclear safety fund to provide adequate compensation in the event of an accident;
8. Strengthen the nuclear safety regulatory body’s international cooperation by establishing the nuclear safety regulatory body as a primary representative to the IAEA;
9. Ensure that the nuclear safety regulatory body participates in every level of nuclear accident emergency planning and provides technical support to local governments on nuclear accident emergency response.

In October, the State Council approved the nuclear safety plan with some slight revisions (see the revised version in Chinese here and an article in Chinese about the changes here). Later that month, the State Council Standing Committee also approved the Nuclear Power Safety Plan (2011-20) and the Nuclear Power Mid- and Long-Term Development Plan (2011-20) (see announcement in Chinese; neither of these plans has yet been made available online). In approving these plans, China officially lifted the freeze on approving new nuclear power plants, while also deciding not to build any inland nuclear power plants through 2015 and, significantly, to require all new plants to meet higher Generation III safety standards (see English news articles here and here). Although China has not announced new nuclear power installed capacity targets for 2020, it is expected that targets will be adjusted downward from previous expectations. We applaud China’s decision to take a more cautious approach to development and hope this reflects a strengthened emphasis on nuclear safety as the primary consideration in developing its nuclear power program. 

There is still more that China can do to improve the quality of its nuclear safety regulation. A significant and common sense step would be to take its nuclear safety regulatory body out of its current position in the Ministry of Environmental Protection and to set up a new, independent regulatory body directly under the State Council or National People’s Congress, as would fit China’s political system. The establishment of a National Nuclear Safety Regulatory Commission that is an independent legal entity with its own budget, human resources and decision-making authority would help to ensure that China’s regulators have the tools necessary to effectively regulate the safety of China’s rapidly expanding nuclear power program. China must also quickly pass the Atomic Energy Law and a Nuclear Safety Law to provide a comprehensive legal foundation for China’s nuclear development and safety.

Nuclear power could be important in helping China to diversify its electricity mix, but only if it cautiously developed in a manner that places safety first in every aspect of development, operation and regulation. The occurrence of one major accident would bring irreparable harm to the lives and property of Chinese citizens and the environment. It would also bring unprecedented doubt and damage to China’s nuclear industry and with it the prospects for future development of China’s nuclear power program.

China is planning emission-trading trials in key spots including Beijing and Shanghai. Alvin Lin and Yang Fuqiang have some words of advice.

China’s decision to launch a group of city and provincial-level carbon-trading trials is widely considered to be preparation for an absolute cap on emissions. The scheme, led by the National Development and Reform Commission, China’s top economic planner, will see pilots established in five cities and two provinces: the cities of Beijing, Tianjin, Shanghai, Chongqing and Shenzhen and the provinces of Hubei and Guangdong

A good foundation for these trials is already in place: much experience has been gained from the operation of earlier environmental exchanges in Beijing, Shanghai and Tianjin. But even the best laid plans can go awry, and so we make the following suggestions:

1) Push for a carbon-emissions peak as soon as possible

If carbon output continues unrestrained, China’s carbon-dioxide emissions will account for 25% to 30% of the global total by 2020. In major Chinese cities, per capita carbon emissions are already higher than in many of the world’s large cities. But China’s city and provincial strategies rarely include an emissions peak. Long-term plans – to 2030 or 2050 – involve continued growth of energy consumption and carbon dioxide emissions in support of energy-intensive sectors such as industry and manufacturing.

These plans will only cement the link between economic development and higher energy consumption and emissions. They reinforce energy-hungry modes of development and economic structures, and a reliance on high-carbon routes for achieving prosperity. As a result, necessary changes in the future will be even more costly.

City and provincial plans for responding to climate change should be extended out to 2050, or at least 2030, and specify a point – as early as possible – at which emissions will peak. This point should be between 2020 and 2025 for cities, and between 2025 and 2030 for provinces, or even sooner. The later the peaks, the higher the costs of dealing with climate change down the road.

Such plans would mean that emissions controls gradually get stricter. This is in line with investor expectations of a rising carbon cost and will help to promote emissions cuts. When post-peak reduction targets are given in terms of absolute numbers, mature carbon markets will come fully into play.

2) Cut coal at the same time

Strict controls should be placed on coal consumption in China’s carbon-trading pilot zones, including year-on-year reductions. This will help to control the air pollution from which all these densely populated cities and provinces suffer, and which comes mainly from coal burning and vehicle emissions. The substitution of clean energy – in particular natural gas – should be encouraged. Beijing has taken the lead in urban energy planning: annual coal consumption is targeted to fall by six million tonnes between 2010 and 2015 under the 12th Five-Year Plan.

China already has a well-developed renewable energy sector: solar, wind and geothermal power are all widely used. Government policy should encourage further growth of these industries. The capping and allocation of carbon emissions and the use of carbon funds should incentivise the development and use of clean sources of energy such as natural gas and renewables in favour of coal and strengthen the power of these sectors.

3) Create local legislation

As with stock markets, constant high-volume carbon trading will give rise to inevitable disputes. A robust system of supporting legislation that provides for adjudication and penalisation is essential, along with regulatory and auditing bodies vested with clearly defined powers that allow them to resolve issues promptly.

In each location, the Standing Committee of the People’s Congress should put these rules in place in order to regulate all interested parties – including government authorities and the carbon exchange itself. Local development and reform commissions cannot and should not act as adjudicators. Local governments in the trial locations all have full powers to legislate and experience in doing so. They should take the lead here.

4) Take a broad approach to emissions reduction

There are ways to respond to climate change beyond tackling carbon emissions from energy consumption. Other areas of focus include land use, vegetation cover, the urban heat island effect, building techniques, low-carbon technology and urban-rural coordination. Greenhouse gases besides carbon dioxide must also be considered, in particular methane from organic waste: soil, vegetation and rubbish alone account for 35% of total greenhouse-gas emissions.

Currently the main greenhouse gases being captured or cut are carbon dioxide, methane, nitrogen dioxide, nitrous oxide, fluorocarbons and sulphur hexafluoride. As China’s level of vegetation cover is low and methods of calculation are imperfect, the carbon storage role of biomass should be emphasised in emission-reduction plans, but not included in trading.

China’s carbon-trading trials should be closely coordinated with other government projects – there are obvious synergies with plans to achieve energy-saving and renewable-energy targets. For example, carbon quotas in the power sector can be distributed in proportion to electricity generated. Renewable-energy generators can then sell their quotas and become more competitive, driving the development of renewables.

Carbon-emissions reduction has significant benefits for reducing other pollutants. Carbon-emission rights can be linked with sulphur, nitrogen and particulate pollution, adding to the value of carbon trading and further reducing pollution. The seven locations identified for China’s carbon-trading trials are also key areas in the Ministry of Environmental Protection’s efforts to cut pollution and coal use, and it is important to combine these tasks. The focus has to be broader than carbon alone.

These parts of China also suffer from smog and the public is well aware of the threat to their health. There can be no further delay. Dealing with PM 2.5 pollution – the finest and most damaging particulate matter – is particularly problematic, and research on how to tether this to carbon trading, energy-saving and carbon reduction is needed.  

5) Respond to market supply and demand

China’s environment ministry has run previous trials – all now terminated – in the trading of sulphur-dioxide emission rights. Those experiments demonstrated how a lack of participants, low trading volumes and high transaction costs can cause markets to fail. Supply and demand issues need to be closely watched in the new trials. If a single city cannot support enough trading, the scope of the market should be expanded to surrounding areas. Trading volume will be the key to the success or failure of these carbon markets.

Both China’s Ministry of Finance and Ministry of Environmental Protection have long funded research into the introduction of a carbon tax and a number of models are available. But, as the outcome of such a levy is still unpredictable, it is not yet certain that China will impose one. A carbon tax would, however, help the process of establishing and testing a viable carbon-trading system. It would also give carbon a value: firms could decrease their tax burden – and hence increase profits – through energy saving and emissions reduction.

In the early stages of a carbon market, its low trading volumes and the immaturity of its systems can create uncertainty over the carbon price, something to which investors are very sensitive. During these early stages, there should be a price floor and cap: this will prevent economic or other uncertain factors from seriously affecting the carbon market, for example over-supply or over-demand causing the carbon price to be too low or too high.  If human interference is too great, it will affect the carbon market’s normal operation. As the carbon market expands and becomes more mature, it is possible to relax and eventually do away with the interferences to the carbon market.

Alternatively, a carbon tax would, in those early stages, provide a fixed price for the period during which a mature and nationwide carbon market develops. Medium and long-term carbon prices could only be higher than that tax, as investors will expect it to increase with time. A carbon tax and carbon markets can coexist. And when the carbon market itself is able to set a stable price signal, the carbon tax can be abolished or modified to serve other ends. 

This article is published as part of our Green Growth project, a collaboration between chinadialogue and the Energy Foundation.

The 17th meeting of the Conference of the Parties to the UN Framework on Climate Change – COP17 – was shaped, much like COP15 in Copenhagen and COP16 in Cancun, by the emerging dynamics between the world’s two largest economies and emitters – the United States and China.  But they were by no means the only influential players.  With the end of the only legally-binding commitments on reducing greenhouse gas emissions – under the Kyoto Protocol – drawing to a close in 2012, the European Union came into the negotiations as the only party willing to extend those commitments.  In exchange, they sought agreement from all countries on a “roadmap” that would bring on board developed and developing countries (including the U.S., which is not a Kyoto-signatory) to reaching a legally binding agreement by 2015 coming into force post-2020. 

The agreed roadmap, the Durban Platform on Enhanced Action, is a compromise of various positions of the EU, BASIC countries (Brazil, South Africa, India, and China), the U.S. and others. Early on, China expressed flexibility in taking on legally-binding commitments post-2020.  The head of China’s delegation, Minister Xie Zhenhua of the National Development and Reform Commission, laid down five conditions for this and a successful Durban outcome to take place: (1) the agreement sticks to the principle of common but differentiated responsibilities and respective capabilities, equity and environmental integrity; (2) the Kyoto Protocol is extended to a second commitment period; (3) developed countries honor their commitments in Copenhagen to provide climate financing of $30 billion for 2010-12, increasing to $100 billion per year by 2020; (4) countries will start promptly a review of the adequacy of existing mitigation pledges, to be completed 2015; and (5) the mechanisms agreed in previous meetings – e.g., technology transfer, financing, forestry – are implemented and operationalized.

The United States also expressed flexibility in signing on to a legally binding agreement, if: (1) the agreement was “symmetrical,” meaning that all countries would be bound in a similar fashion; (2) there was a process for developing countries to graduate to commitments similar to developed countries; and (3) commitments by major developing countries were unconditional, that is not dependent on financial or technical support.

A good result from a negotiation, Minister Xie has said, is when no party is completely happy with the result, but they can all live with it.  The compromise that was ultimately reached Sunday morning—after ministers met in many “indabas,” a Zulu word meaning a gathering, usually among leaders—represented just such a deal.  It effectively extends the Kyoto Protocol and launches a process for all parties to agree to “a protocol, legal instrument or agreed outcome with legal force” by 2015.  The Durban Platform also begins to operationalize the Green Climate Fund and the Technology Center and Network, although the funding sources are yet to be decided (one possibility that is under serious consideration is a tax on maritime shipping). 

The final language—an agreed outcome with legal force—was the product of a heated debate in the early hours Sunday morning—with India’s negotiator in particular resisting the push by the EU to insert stronger language for a legally binding agreement by 2015, citing equity considerations of developing nations whose emissions are the lowest.  After reaching a stalemate, the ministers met in a huddle in the front of the plenary hall, finally agreeing to change the phrase “legal outcome” to the somewhat stronger “agreement outcome with legal force.” 

That compromise threaded the needled and brought into sight an end to the COP.  But it has left many wanting more.  Multilateral climate negotiations should call for greater ambition from countries to reduce their emissions to scientifically acceptable levels, and financial and technical support for developing countries to address climate change: many of these still require further negotiation.  Equally important, however, is how these talks build up mutual trust among countries that they are doing all they can and a commitment to help others in their efforts.

Mutual trust between the U.S. and China has improved as a result of bi-lateral clean energy and climate initiatives, many begun in 2009 prior to the Copenhagen climate talks. This starts with recognition of the political realities in both countries.   The U.S. has a challenging political environment for comprehensive federal actions to address climate change, but the U.S. is taking actions in many other ways, including stronger federal vehicle efficiency standards, an abundance of state-level actions, and regional carbon trading schemes.  China is making robust efforts on efficiency and renewables, but will have difficulties agreeing to a treaty which places the burden of emissions reductions equally on developed and developing countries.

The ultimate effect of the Durban Platform will not be known for several years. We must see what countries do at home with the words so carefully negotiated and debated. If countries begin to make good on promises of climate finance, technology transfer, and improving reporting and transparency of their emissions and actions, then trust will grow among them. Only then will the world will have a chance of coming together to effectively address climate change.

On July 12, Chinese government representatives and climate change experts convened the opening meeting of the China climate change legislation research project, intended to examine both international experiences with climate change legislation and relevant domestic laws in an effort to inform the drafting of China’s own climate change law.  (See article in Chinese.)  Representatives from the National Development and Reform Commission (NDRC), the National People’s Congress Environment and Resource Protection Committee, the Legislative Affairs Office of the State Council, Chinese Academy of Social Sciences, Chinese Academy of Sciences, NDRC Energy Research Institute, China University of Political Science and Law (CUPL), Tsinghua University, Renmin University, and Energy Foundation, as well as other relevant units and climate experts participated in the opening meeting. 

The impetus for establishing a climate change law began in 2009, when the National People’s Congress Standing Committee passed a resolution on actively responding to climate change (English translation) (original Chinese version), including through strengthening climate change-related laws such as the Energy Conservation Law and Renewable Energy Law and incorporating climate change-related legislation on the legislative agenda.  The State Council has entrusted the National Development and Reform Commission, in particular the Climate Change Department, with leading the drafting of the law, and the Climate Change Department has in turn entrusted CUPL with organizing research related to the climate change legislation.

At the opening meeting, Climate Change Department Director Su Wei made three points regarding the legislative research project: (1) It should analyze and draw lessons from international and domestic climate legislation policy and experience, from both developed and developing countries, including research on carbon trading, carbon tax and other mechanisms; (2) In addition to collecting basic materials, it should also undertake deeper investigations; and (3) It should emphasize communications with and guide the public to participate broadly in the legislative work. 

Indeed, while the drafting and passage of the climate change law will be a multi-year process, the government has taken a very open approach to drafting the legislation, publishing a notice earlier this year in March seeking public input on the law by September 30 (see NDRC notice in Chinese).  At the same time, even as the drafting process is occurring, China is moving forward with plans to develop on-the-ground experience with programs that could be important components of the climate law, such as carbon trading pilots and gradually setting up a carbon emissions trading market (as NDRC Minister Xie Zhenhua reiterated recently), developing thirteen official pilot low carbon cities and provinces (although many other provinces and cities are also exploring how they can develop in a more sustainable, low carbon way), and strengthening mechanisms and programs for increasing renewable energy and improving energy efficiency, including through expanding demand side management programs.

As other countries, notably Australia (see my colleague Jake Schmidt’s summary of Australia’s climate legislation) and South Korea (see here and here), continue to push forward with plans to develop the legal and policy frameworks for addressing climate change and promoting a low carbon economy, including through putting a price on carbon, China is determined not to be left behind.  The climate change law that China ultimately develops will no doubt be tailored to its unique political, economic and environmental circumstances, and will require careful consideration of how experiences from abroad and within China can inform the establishment of a framework appropriate for China.  The Chinese climate change legislation research project is an important start for laying a solid foundation for this work.

Delegates in the plenary room offer a standing ovation to acknowledge the contribution of COP President Patricia Espinosa in creating an open and transparent process for the parties to reach agreement.

Even before the start of the informal plenary last night to air countries’ views, the audience of delegates and civil society offered sustained rounds of applause for the texts that the President of the conference, Mexican Foreign Minister Patricia Espinosa, provided for the parties (the two outcomes were agreements on Long Term Cooperative Action (LCA) and further commitments to the Kyoto Protocol) in an extraordinary show of support.  The applause reflected the overwhelming recognition that the agreements represented a careful balance that captured the diverse views of all the parties to some degree, and create important institutions and mechanisms for reducing greenhouse gas emissions, adapting to climate change, addressing deforestation, and providing financial, technological and capacity building support to developing countries to help them to address climate change.

Time and again, country representatives praised the open, transparent and inclusive manner by which the agreements were reached.  No country achieved all that it wanted, but countries recognized the importance of compromise and flexibility in the talks and expressed broad support for the agreements as an important building block for future progress.  The warmth and spirit in the room restored confidence in multilateralism and the ability of countries to come together to address climate change.

The new Cancun agreement on long term cooperative action builds on the commitments that countries made last year in the Copenhagen Accord and lays the building blocks for a way forward next year: 

• Countries recognized the need to take action to hold the increase in global average temperatures to no more than 2 degrees Celsius, and to review the adequacy of this target and consider strengthening it by 2015. 
• The agreement creates important institutions such as a Green Climate Fund (as my colleague Heather Allen blogged on), a Technology Executive Panel, a Climate Technology Centre and Network, and an Adaptation Committee, all of which are aimed at increasing the speed and scale of efforts to help countries deploy technologies and solutions to reduce emissions and adapt to climate change. 
• Developed countries reaffirmed their commitment to fast start funding of $30 billion for 2010-12 and long term finance of $100 billion per year by 2020 to help developing countries, in particularly those most vulnerable to the adverse effects of climate change, to mitigate their emissions and adapt to the impacts of climate change.
• Both developed and developing countries will include their mitigation commitments and actions in information documents associated with the Cancun decision.
• On deforestation, the agreement sets out strong principles and a framework for helping developing countries to scale up and receive support for their efforts to reduce emissions from deforestation.

Building a foundation for increased transparency and trust

The transparency of the negotiation process was mirrored by strengthened commitments to improve reporting on and transparency of greenhouse gas emissions and countries’ actions to address climate change.  Developed countries agreed to prepare annual greenhouse gas inventories as well as biennial progress reports on their progress in achieving emissions reductions, their projected emissions, and the financial, technological and capacity building support they have provided to developing countries.  They are to enhance their reporting in their national communications, including using common reporting formats and methodologies for finance, in order to ensure that the information provided is complete, comparable, transparent and accurate.  Developed country emissions and removals related to their emission reduction targets will be subject to an international assessment process with a view to promoting comparability and building confidence.

Developing countries will also enhance reporting of their national communications and inventories, with flexibility provided for least developed countries and small island states.  They will submit national communications every four years and biennial update reports with updates of greenhouse gas inventories and information on mitigation actions, needs and support received.  A registry will be created to match developing country actions seeking support with developed country financing and support.

On the issue of monitoring, reporting and verification (MRV) and international consultations and analysis (ICA) of developing country efforts, there are provisions that strengthen reporting in a facilitative and constructive way.  Both supported and non-supported mitigation actions by developing countries will be monitored, reported and verified domestically, and guidelines will be developed for the MRV of both supported and non-supported mitigation actions. 

Developing country biennial reports will undergo an ICA process that is non-intrusive, non-punitive and respectful of national sovereignty.  The ICA is intended to increase transparency of mitigation actions, and will provide for analysis by technical experts and a facilitative sharing of views.  The information to be considered includes mitigation actions and greenhouse gas inventories, including a description and analysis of methodologies and assumptions used, and progress in implementation and information on domestic MRV and support received.  Discussions about the appropriateness of domestic policies and measures are not part of the process.

All in all, the Cancun agreement reached today sets a foundation for building institutions and frameworks for collective action among countries and the global community that can scale up the solutions that we need to address the challenge of global climate change. As Minister Espinosa stated, the agreement is not an end, but a beginning.  And as Environment Minister Mohamed Aslam of the Maldives implored the audience in the plenary: There is no need to waste more time—it’s time to move on to the next stage.

Chinese climate negotiator Su Wei (center) at China’s December 1st side event on China’s climate actions. 

As the third day of the two-week climate negotiations in Cancun draws to a close, we are seeing reasons for optimism that there will be progress on the issue of countries improving the current system for tracking global greenhouse gas emissions (otherwise known as MRV, for monitoring, reporting and verification of emissions).  This was an important issue in the Copenhagen meeting last December, particularly between the United States and the major developing countries, and it led to one of the key agreements in the Copenhagen Accord: that developing countries’ reporting of their emissions and actions would be more frequent and comprehensive in the future, in order to strengthen the global system for tracking emissions.  Advancement in this area is important for improving both the international effort to address rising global greenhouse gas emissions and the efforts of individual countries to understand and improve the effectiveness of their domestic efforts to mitigate emissions.

Perhaps it is the temperate weather of the settings for the “COP”* this year, but we have already begun to see a thawing of developed and developing country positions on this issue.  The US and China report having been in discussions on this issue in the past month, with US negotiator Jonathan Pershing noting progress and China’s chief delegate Su Wei noting a “candid, very open dialogue.”  India has also sought to play a constructive role on the issue of transparency, putting forward a proposal for “international consultations and analysis” (as called for in the Copenhagen Accord) of developed and developing country emissions that would improve the frequency and accuracy of emissions reporting in a facilitative way, without punitive implications.  (See the ClimateWire news article on the Indian proposal here, which includes a link to a letter by Environment Minister Jairam Ramesh of India in November to his US counterparts explaining the proposal.)  In a meeting with Chinese NGOs last week, China’s lead negotiator Minister Xie Zhenhua noted that China can accept greater transparency and international consultations and analysis, but these must be non-invasive, non-punitive and facilitative (Chinese news article).    

NRDC has been following the issue of improving global emissions reporting closely.  Although only one of many important issues in these negotiations, we have felt that this was an issue where progress could be made because it is in the mutual and individual interests of countries to improve their understanding of their emissions.  Yesterday, we held a press conference to announce the release of our recommendations for improving countries’ reporting of their emissions and actions in their National Communications to the United Nations Climate Secretariat.  (See my colleague Jake Schmidt’s blog post on our recommendations for improving reporting and this NRDC factsheet detailing our reporting recommendations.)

While a compromise on the issue of improving reporting and transparency will inevitably need to be accompanied by agreements on other key issues like finance and technology for developing countries to address climate change, it is in the best interests of all countries to make progress here because it helps them to improve the effectiveness of their domestic programs to address their emissions and to get credit for the actions they are taking.  In the last five years, for example, China has undertaken an enormous program to improve its energy efficiency and to meet a national goal of reducing its energy intensity, the amount of energy consumed per unit of GDP, by twenty percent from 2006 to 2010, and also boosted its renewable energy deployment.  (For more details, see our factsheet on China’s clean energy efforts.)  Improving its reporting of its efforts will enable China to gain broader international recognition for its efforts to address climate change.  (See my colleague Barbara Finamore’s blog post on this point here as well as China Dialogue’s interview with Minister Xie last week in which he emphasized China’s efforts to increase its communications on its actions).

As part of its next five year plan, China has indicated that it will take these efforts even further by setting carbon intensity reduction targets nationally and at the local level (in order to meet its 40-45 percent carbon intensity reduction target for 2020), establishing 13 low carbon cities and provinces to serve as a model for sustainable development, and is seriously considering adopting market mechanisms like a carbon tax and a pilot cap and trade system to further push forward investment in clean energy technologies and away from dirty fossil fuels, particularly coal.  In order to implement all of these policies, China and other developing countries will need accurate, robust data on their greenhouse gas emissions.  For their part, developed countries should be prepared to provide the funding and capacity building to ensure that domestic countries can develop the institutional capacity within their governments to prepare more frequent and comprehensive assessments of their emissions and mitigation actions.

We are still early in the climate negotiations, and many have noted that the negotiations this year may suffer from a lack of ambition, in contrast to the sky-high expectations of last year’s Copenhagen negotiations.  However, as long as countries make steady progress in working out the details of agreements that are in all countries’ interests, we have reason for guarded optimism that we will see some important outcomes in the next two weeks.

* I.e., the Conference of the Parties to the UN Framework Convention on Climate Change.

NRDC, which has been working to implement clean energy projects in China for 15 years, held a side event during the conference that highlighted the many significant actions that key developing countries are already taking to build a clean energy future and reduce the impacts of climate change.  My colleagues and I, joined by Professor Joanna Lewis from Georgetown University, highlighted some of the significant actions that key developing countries including China are already taking to address climate change and mitigate emissions, including:

• China’s commitment to reducing its carbon intensity by 40-45 percent by 2020, compared to 2005 levels, and why this is significant;
• China’s strong renewable energy laws and policies, which have, among other things, helped China to grow its windpower resources from almost nothing to second in the world (just behind the US) in just the last 5 years; and
• China’s construction of a “strong, smart grid” (with the emphasis on strong) which can help integrate greater amounts of clean, renewable power. 

These three issues are discussed in greater detail in three working papers released at our side event—click here to download the reports as well as our presentation slides.  The 2010 China Windpower Outlook released last week by the Chinese Renewable Energy Industries Association, Global Wind Energy Council and Greenpeace, has good analysis of China’s wind sector and projects that China could develop over 230 GW of windpower by 2020 in its most ambitious scenarios.

Like China, India is also taking actions to become a leader in clean energy, including:

• establishing a national solar mission with the goal of developing 20 gigawatts of solar power by 2022;
• establishing an energy efficiency mission aimed at reducing annual energy consumption by 5 percent by 2015 and improving industrial and appliance efficiency;
• putting in place mandatory fuel efficiency standards for cars and trucks by 2011;
• establishing a coal tax of 50 rupees per ton of coal, which funds a National Clean Energy Fund; and
• releasing its national GHG inventory of its 2007 emissions, making India the first developing country to publish an inventory for such a recent year. 

(See my colleague Jacob Scherr’s presentation for more details on India’s actions to address climate change.)

The message here is clear—smart policymakers are not standing still, but are taking actions now to make sure that their countries are going to be early adopters, manufacturers and innovators of the clean energy technologies and know-how that will help their countries to address climate change, improve their citizens’ health and environment, and reduce their dependence on dirty, polluting and unsustainable fossil fuels.

Even as negotiators continue to discuss the very important issues crucial to forging a global climate agreement—financing for developing countries, mitigation targets and actions, improving reporting on emissions and actions—it is important that their governments back home not wait. 

The next decade will be crucial for developing and strengthening the technologies and policies that will enable the global community to address the threat of climate change.  The time to start is now.