Clearing the Air With a Sino-U.S. Climate Pact

Hu Shuli Leads Interview with China’s Chief Climate Negotiator, Xie Zhenhua

A long-anticipated, Sino-U.S. agreement aimed at curbing greenhouse gas emissions was announced on November 12 at the Asia-Pacific Economic Cooperation meeting in Beijing.

The deal marked a surprise turn toward compromise for the world's largest economiesand largest greenhouse gas emittersafter two decades of sometimes acrimonious discussions.

A White House statement said the United States "intends to achieve an economy-wide target of reducing its emissions by 26 percent to 28 percent below its 2005 level in 2025, and to make best efforts to reduce its emissions by 28 percent.

"China intends to achieve the peaking of CO2 emissions around 2030, and to make best efforts to peak early, and intends to increase the share of non-fossil fuels in primary energy consumption to around 20 percent by 2030."

According to U.S. Secretary of State John Kerry, the two countries have been "leaders of opposing camps in climate negotiations" for some 20 years. But now they have "come together to find common ground, determined to make lasting progress on an unprecedented global challenge."

The agreement followed several months of low-profile talks between the Americans and China's international climate negotiations team headed by Xie Zhenhua, Deputy Director of the central government's National Development and Reform Commission.

Before joining NDRC, the 65-year-old Xie was in charge of a government agency overseeing environmental protection regulations. He held that post between 1993 and 2005, spearheading several nationwide anti-pollution campaigns.

In an exclusive interview with Caixin on November 15, Xie offered his take on the Sino-U.S. climate pact. His comments came as the Chinese government is under mounting pressure to combat air pollution, and world leaders are gearing up for a fresh round of global climate talks in Europe.

Xie expects the pact's latest emissions goals for China will give Beijing authorities a new springboard to push reform projects.

The following are excerpts from the interview.

Caixin: The Sino-U.S. climate agreement has won widespread acclaim. Can you tell us more about the negotiations?

Xie Zhenhua: The two countries had been preparing to issue [an agreement] for awhile. In late September, Vice Premier Zhang Gaoli participated in a UN Climate Summit and met President Barack Obama, delivering two messages on behalf of President Xi Jinping. One was an invitation asking President Obama to visit China for the APEC meeting. The second was a call to enhance cooperation on climate change issues and set goals for action beyond the year 2020.

The two countries have had a clear understanding from the beginning and have worked together to help each other reach targets. Teams from both sides have had many opportunities to communicate. They've made contact via telephone and video calls, and at face-to-face meetings, in order to settle several key issues. The final statement was fixed in stone on the day of the announcement.

In the statement, China and the U.S. made it clear that we are looking forward to an agreement being reached at the 2015 Climate Change Conference in Paris. China shall make contributions to help reach the agreement and it should be a fair one reflecting different countries' distinct responsibilities and capacities.

The China-U.S. joint agreement is a win-win result because it highlights a new kind of relationship between the two major countries, playing an historic role in pushing forward a global response to climate change.

The negotiations included not only technical discussions about climate issues but, to some extent, they were also political discussions with decisions that had to be approved by top leaders. How did the top leaders from the two countries negotiate?

Top leaders from both sides attached great importance to the issue. They personally followed the issue and pushed for progress by seeking consensus.

You mentioned the agreement was well-timed because it was released during the APEC meeting. With the 2014 Climate Change Conference in Lima approaching, and an agreement expected at the 2015 conference in Paris, are China and the United States trying to influence international negotiations?

At the UN Climate Summit in September, Vice Premier Zhang Gaoli delivered a speech saying China supports and is willing to contribute toward concluding an international agreement on climate change by 2015. But the agreement should be fair and based on the principle of common but differentiated responsibilities.

The vice premier outlined China's targets for fighting climate change by 2020. These had to do with reducing carbon intensity, increasing non-fossil fuel energy consumption levels, increasing total forest area, and seeking to cut carbon emissions as soon as possible.

Zhang's speech clearly voiced the opinions of China's leadership regarding multilateral climate change negotiations beyond 2020. And this time, in the joint agreement with the United States, China set two quantitative goals.

Will more detailed goals be released next year?

Yes, more will be released as required and according to the progress of multilateral negotiations. There will be blanket targets, marking China's entry into a period of development with low-carbon emissions.

What impact will the China-U.S. joint agreement bring to the global, multilateral climate change negotiations?

One is the largest developed country and the other is the largest developing country. The world's two largest economies and two largest emitters of greenhouse gases have taken proactive steps based on their own situations. This activity has greatly contributed to multilateral progress.

Countries are required to propose individual targets by the first quarter of next year. China and United States have thus announced [their goals] in advance. Actually, the European Union made its announcement even earlier. That's good news for the multilateral talks.

What are your expectations for the Lima Climate Change Conference and the 2015 conference in Paris?

The Lima conference will be crucial because it will determine the results of next year's meeting in Paris. It lays the groundwork for an agreement expected to be reached next year. Lima conference [participants] need to work out a preliminary consensus on the framework, principles, factors, and key issues for the agreement. There will be a lot of disagreements that will be left waiting to be resolved, one by one, at the Paris meeting. I think the Lima meeting will see a lot of disputes. And every country will try to inject its opinion in the draft agreement.

Before the Paris meeting, countries will resolve disagreements through negotiations and draft a tidy agreement next year.

Some experts say China has set an emissions reduction target for 2030 that's quite high and that it may be difficult to reach under the current development model. What's your opinion?

The central government has made it clear that a mechanism will be set to push reform through emissions reduction efforts by promoting adjustments to the economic structure, and by improving the quality and efficiency of economic growth.

President Xi Jinping said recently that reducing emissions is not a task that we should do when others demand it, but according to our own needs. We should use emissions cuts to promote the country's transformation to a greener growth model. The targets we set should serve this purpose.

To promote reform, there should also be supportive institutional arrangements and reform measures. First, the state should issue policies to encourage efficient energy use for industry, construction, transportation, and even in the home. Policies should especially let the market play the key role in allocating resources.

Second, policies should be issued to encourage and support the development of renewable energy sources to increase non-fossil fuel energy consumption.

How should China adjust its economic structure and adapt to change if its carbon emissions peak around 2030, thereby reaching its goal? What are some major hurdles standing in the way of achieving this target?

We must expand the development of strategic emerging industries and high-tech industries. The tertiary sector will see greater growth. And in the secondary sector, technology and products related to low-carbon emissions and recycling will be better developed. The structure of energy consumption in the country will see major changes.

In addition, the country's forest reserves will be greatly expanded, leading to big changes for the forestry industry. Now, some areas have wide forest-covered areas but their volume of trees is low, suggesting that they need to change the structure of their forestry. In the future, quality will be more important than quantity.

To meet all these goals, we will see a lot of changes in the country's industrial and agricultural sectors, as well as in urban life and other areas.

Major challenges to overcome in order to meet these goals have to do with energy structure and efficiency. China's current energy efficiency level is much lower than the world's average. If we can double our efficiency, our economic growth can be doubled even if energy consumption levels remain unchanged.

The main reason why China's energy efficiency level is so low is that outdated technologies and equipment are still widely used. Now, forced by these goals, new projects must be based on more advanced energy standards, and outdated equipment must be eliminated.

Data shows that GDP growth rates in many countries fell by about 3 percent after they reached a carbon emissions peak. How can China maintain a proper level of growth ahead of the 2030 scheduled peak for carbon emissions?

Economic development follows rules set in law. President Xi Jinping said China must adapt to a new growth pattern. China has undergone 30 years of rapid growth with annual [GDP growth] rates above 10 percent. It's been a miracle, but this can't be maintained forever. As the economy grows, the growth rate will definitely decline.

In the past, China's growth was mainly motivated by investment. Resources and the environment were sacrificed. Now, we have entered a period during which we will pursue a resource-conserving, environmentally friendly society.

Do you think China can achieve its emissions reduction targets for 2020?

China is making great efforts to meet its targets for 2020. As of 2013, we have reduced carbon intensity by 28.5 percent of the 2005 level. We have another seven years to further cut 40 percent to 45 percent. Clearly, China can do it.

Our country paid a high price for this. To meet its targets in 2009 and 2010, power supplies were limited in some regions. We have set long-term goals and five-year goals that are legally binding. Specific targets have been allocated to local authorities and individual companies.

Are emissions targets legally binding?

Emissions targets will be included in each five-year plan in the future. Each plan will be reviewed and approved by the country's top legislators. Thus, emissions goals will also be reviewed and will be legally binding.

Coal accounts for 68 percent of China's primary energy consumption. Big changes will have to be made if the country wants to double its non-fossil fuel use within the next 16 years. Does the NDRC have a detailed roadmap for energy development?

We already have it. There are detailed targets for the growth of nuclear power and hydroelectric power, as well as wind, solar, and biomass energy. Some plans have been released to the public.

China's solar energy market is huge. With technological development, costs will fall. For nuclear power, the state has clearly decided to encourage development on the condition that it's done securely.

But we will take a cautious approach when developing nuclear power facilities at inland sites. Currently, most projects are in coastal regions. China's nuclear power construction plan is the world's largest, and the country will continue implementing the plan that's been made.

What is the plan for shale gas development?

In the United States, shale gas is mainly discovered hundreds of meters underground. But in China, it is thousands of meters deeper. So development costs are totally different. But China will continue studying shale gas development. In the joint agreement, China and the U.S. agreed to cooperate on shale gas development technologies.

In your opinion, what major challenges to developing new energy resources does China face?

I think it is core technology. Without certain technologies, China has to pay a lot for foreign patents. If we own the core technology, though, costs fall. For instance, desulphurization facility costs usually account for up to 20 percent of a power plant construction project's price tag. But after desulphurization equipment started to be produced domestically, these costs were cut in half.

In the joint agreement, China and the United States promised to cooperate in many technological areas including automotive, "smart" power grids and carbon capture systems development. How will these cooperative efforts be realized?

We have set up a joint working team with special groups to focus on specific areas. Some groups are led by the U.S. side and some are led by the Chinese. There are detailed arrangements regarding the projects, companies involved and other issues.

For instance, the energy efficiency team is led by the NDRC, the U.S. Department of Energy, and the U.S. Environmental Protection Agency. There are studies focusing on setting standards, how to improve boiler efficiency, and other very specific topics.

The two parties are also looking at unifying standards for truck fuel consumption. And they plan more projects involving technological cooperation.

We have established many cooperative projects. They will be put into practice in the future. And more working groups will be established. Everything that leads to concrete action will be included in reports presented at the annual China-U.S. Strategic and Economic Dialogue meeting.

Many were surprised by the announcement of a China-U.S. joint agreement on climate change. What's your take on this?

The joint agreement is significant because it pushes forward domestic industry upgrades, while promoting multilateral climate negotiations and bilateral cooperation. It reflects an attitude and determination on the part of each country to push multilateral progress on climate change. It also marks a new type of relationship between China and the United States.

Climate change is a challenge confronting the entire human race. Every country has to face it, but we face it together. It's not a bilateral issue but a multilateral one. Every country must participate in multilateral action and respond to climate change. It's a win-win game.