China Wants to Take "a Leadership Role" On Climate: An Interview with WWF's Yang Fuqiang, Part 2

by Alex Pasternack, New York, NY on 11. 9.09

When it comes to China's efforts to curtail greenhouse gases, Dr. Yang Fuqiang, director of global climate solutions at the World Wildlife Fund, has an optimal vantage point. He began his career as a researcher at the National Development and Reform Commission, the Chinese government's main economic planner, before continuing in the realm of energy and the environment. We spoke with him recently in Beijing, a few weeks before President Obama's upcoming visit.

This is the second part of our interview; also see the first part of our interview, about US-China collaboration.

TreeHugger: What's the best way China can address its carbon emissions in the short term?
Yang Fuqiang: They have two chances. One is Obama. Maybe China will give him some gift. The second chance is Copenhagen. China might say we have our binding targets for our emissions domestically, but not internationally.

To lower emissions, they have to have a package. First, energy efficiency. In the power sector they closed down and eliminated the small coal-fired power plants. Now they plan to close down the 50 MW plants. In the next couple of years they will close down 100 MW plants. And then up to 200, if some 200 MW some plants are old enough. This is gradual. But it's a lot. They also have these new extra-supercritical coal-fired power plants. If you look at a graph of energy efficiency in the power sector from 1980 to 2003 - that's how much energy per kWh - the trend is very flat. But in recent years the graph shoots up. They've improved a lot.

The question now is about the energy use for iron, steel and cement - the government has to do more, and there's a lot of improvement to be made. And because of the country's reliance on coal and the force of central government policies, these are the sorts of improvements that can only happen in China.

What role will coal play in China in the coming decades?
So far, China is trying to diversify power generation. Renewable, nuclear, natural gas. But right now, 80 percent of China's electricity generation comes from coal. In the future it could be 50 percent. Carbon capture and storage will make it easier to improve energy efficiency and handle carbon emissions. Meanwhile, small coal boilers will use natural gas.

Can you envision China embarking on a massive effort to capture carbon and store it?
It has to. But at this moment, the minds of Chinese government officials have to be changed, particularly by the NDRC. The question is, how can we have a very strong argument that says this is good, this technology is promising, and in the future we can cut costs. You'd say to an official, "You're an engineer and I'm an engineer. If you try to improve the technology maybe you say it's wrong, but maybe I say it's right. There's no evidence for argument. So maybe demonstration can prove who is wrong or right. After a demonstration project, the facts tell them, data tells them, this is right for us. Otherwise, they don't believe it. They say it's too costly. It's very hard to convince them.
At the beginning CSS is very expensive, but if China can start soon on the technology learning curve, in the future this can be one area for the Chinese to gain a competitive advantage. For exports, so China could sell it to developed countries.

What has made climate change an important issue for the Chinese officials with whom you've worked?
Because I've been involved in climate change for two decades, I have seen that the Chinese government's senior officials' attitude has changed. Before they were more defensive. They used to say, "Climate change - that's your responsibility. You have to take care of that. We are a developing country, and we have a right to emit more for our economic goals." But gradually they're saying, "Okay, we'd like to work together, and we'd like to even take a leadership role."

They're all thinking about China's future. Climate change, this is a major concern of the international community. If China doesn't take this concern seriously, it's isolated from the international community. And they have to take care because the countries most damaged by climate change are the developing countries, not the developed countries. So they think, we have to care about this, for the sake of China.

I think this is very important now for the government in economic terms too. They're realizing that the world's resources are not enough to support China, and seeing that they need to accept and implement a low carbon economy in the future.

And moving in that direction will also keep China competitive with other countries, right?
Now globally, China realizes that if they don't think about climate change, other countries will develop technologies that are different from theirs. "I can still use coal," they're saying, "but in the end, I lose. The economy is globalized. Other countries are moving in that direction, and you say you want to be competitive.

What more can the central government do to encourage energy efficiency and the growth of renewable energy?
I disagree with what they've been doing. They've issued [cooling mechanisms] to six sectors that are experiencing over capacity, including wind and solar. They need to separate renewables out of that policy. And at the moment they're trying to do too much. I tell them, "You have no personnel to handle six sectors." They're talking about closing down and improving energy efficiency for iron and steel, but we haven't done anything yet. Try to do too many things and you screw yourself up. So we need to concentrate on iron and steel and not mix them in with renewables.

Now China is giving very high tariffs for wind and solar. That's why many investors are seeing the signals, and investing so much. But on the other hand, in the future I'd like to see other incentives, like a carbon tax and energy tax, and even carbon allocation.

Do you mean a national carbon market? When will that happen in China?
In the next two years. But first China officially needs to say, we need a carbon target. This is a kind of cap and trade, but it will be based on a relative target, not an absolute one. That's not perfect, but it's still okay. So a carbon tax will be imposed and then a carbon market. They have already started one in Beijing, Shanghai and Tianjin. But for a mature market they'll need ten years.

How important and credible are carbon and energy targets in China?
At the moment the developing countries say we don't accept MRV (measurable, reportable and verifiable emissions reductions). But if China sets a carbon target at 17 percent, and they announce it internationally, we will really get this.

The [central] government thinks, "If I have no number, who cares? How can we make this happen, realize this goal? We have to do something. Governors and officials, if you don't do a good job step down." The same goes for state-owned companies.

In other countries you don't see that kind of push. They use mandatory institutional tools well, but not enough. But equally important and more efficient for China is the market. They have to use both hands. One hand is very strong, the other hand is weak. You have to make this hand, the market, much stronger.

What do you know about the impact of the performance evaluation standard for officials?
They recently put environment and energy efficiency in there. If they have a carbon target, they'll put carbon in too. They're making a more integrated performance evaluation system. Two years ago, many governors said, "If I cannot reach this target, I will step down." Well, you say that, but maybe you just have a big mouth. We'll wait and see at the end of 2010 [the deadline for the country's energy goals] how the media reports this. If there's no significant improvement, perhaps there will be calls to "step down please!"

What role are reporters and citizens playing in terms of putting pressure on the government when it comes to meeting targets or keeping pollution down?
The people's representatives at the National People's Congress set this 20 percent energy efficiency target. It's a legally binding target. After five years, the government will say they reached or didn't reach their goal. And the congress will say, "why did this governor get promoted if he didn't achieve his goal?" We can deliver this message to the media. This is what NGOs will do. We will take this very seriously.

Lastly, what place does climate change have in the mind of your average Chinese citizen?
I don't want to say this is fortunate exactly, but when it comes to climate change, Chinese people can touch it and feel it. Every year we have these natural disasters. China suffers. So now WWF is carrying out a study on climate change impact. Nobody has really looked at total loss yet. But people know that the water issue is more serious than the energy issue. They understand that water supplies are decreasing, and that affects food supplies. And that's connected to climate change. We need to make it clear that tackling it won't just benefit the economy but benefit all of China.