China unlikely to sign on to Kyoto

BEIJING, Nov 11 (Reuters) - China is unlikely to commit to cutting emissions in the next phase of the Kyoto Protocol, fearing it would retard economic growth, but analysts say the government is waking up to the threat of climate change. China, now the world's second largest emitter of greenhouse gases after the United States, recently unveiled a five-year economic plan that stresses sustainable rather than breakneck growth, an acknowledgment of the environmental and social costs of its economic success. And not without reason. China has 20 of the world's 30 most polluted cities, according to the World Bank. They are typically choked by car exhaust, factory emissions and construction dust, and the haze worsens in winter when coal-burning heating plants are lit. Health costs are also soaring. Earlier this week, the government raised its target for reliance on renewable energy, saying it should account for 15 percent of national consumption by 2020. In January, a renewable energy law will take effect that sets tariffs in favour of non-fossil energy such as water, wind and solar power. "The situation is not hopeless. The Chinese government is determined to take measures and has started taking measures," EU Environment Commissioner Stavros Dimas told a news conference. Despite these steps, the rapidly growing economy is consuming ever greater amounts of coal and oil and China is likely to come under pressure to do more when it joins officials from 150 countries in Montreal for a U.N. climate change summit. The Montreal meeting from Nov. 28 will help shape the Kyoto Protocol after its first phase ends in 2012. Kyoto requires developed nations to cut their emissions of heat-trapping gases by 5.2 percent from 1990 levels by 2008-2012. The United States and Australia declined to ratify the pact, and developing nations, such as China and India, are exempt from emissions caps all four countries say threaten economic growth. "China's position won't change in a big way," said Yu Jie, a climate and energy campaigner at Greenpeace. DIPLOMATIC DANCE But its desire to play a bigger diplomatic role in line with its growing economic clout might see China taking the lead in discussions of new proposals that might centre on technology transfer from rich to poor countries. "China might be willing to commit to a cap at some time if there is a package on the table, for instance a technology transfer from the EU," Yu said China recently joined the six-nation Asia Pacific Partnership of Clean Development and Climate, which aims to cut greenhouse gas emissions by developing energy technology and which some say makes more sense for developing countries. "I think developing countries have made pretty clear from the beginning that they weren't going to accept cuts because that would impede their capacity to grow," said Alan Oxley, an environment and trade expert and head of the Australia APEC Study Centre. "That situation hasn't changed." The switchover to cleaner, greener energy technology will take time and for now, China's booming economy relies on coal for about 70 percent of its energy needs. Most believe the government's priority is maintaining growth rates that have been hitting more than 9 percent as it tries to overcome a huge wealth gap between the rich coastal belt and impoverished countryside. CLEAN COAL, DIRTY COAL Cuts or no cuts, Chinese officials say they will not abandon Kyoto for the Asia-Pacific pact, which groups Australia, the United States, Japan, India, South Korea and China. "To implement Kyoto, we need more means to achieve the ends," Jiang Kejun, director of the Energy Research Institute of China, told a news conference. "It (the pact) is not meant to replace the Kyoto Protocol, but as a complement to it," he said. Experts say that clean coal technologies should be a priority given China's reliance on the fuel, but that there is no incentive for local governments to pay for less polluting but more expensive fuel or to implement existing standards. "At the local level there is no strong monitoring system so people still tend to buy the cheaper but not clean coal," said Yang Fuqiang of the Energy Foundation, which helps formulate sustainable development policies. "The most important is enforcement to implement all these emissions standards and to penalise those who violate them." But China's energy bureau has only a few dozen people, compared to tens of thousands in the United States, underscoring the need for institutional changes before it can make a dent in its emissions. "First we need institutional reform to establish a powerful, independent government agency," Yang said.