Crucial cooperation on climate

As Obama visits Asia, John Podesta, Andrew Light, Julian L Wong and Orville Schell present their proposal for US-China collaboration on carbon capture and sequestration.

The United Nations climate-change summit in Copenhagen is less than a month away. Nations will negotiate a framework for a successor treaty to the Kyoto Protocol, which expires in 2012. Any successful outcome at Copenhagen will require a commitment from the world’s major economies, not least of which are China and the United States, the two largest emitters of greenhouse gases and two largest consumers of energy. The Center for American Progress and Asia Society has published a new report, “A Roadmap for U.S.-China Collaboration on Carbon Capture and Sequestration,” which sets out a detailed plan for how these two countries can mutually benefit from working together to achieve greater emissions reductions than they can alone.

Recent history makes clear the importance of these two countries working together. The past decade of unprecedented economic expansion has helped China lift millions out of poverty, but not without consequence to its environment and emissions profile. The past eight years in the United States have been marked by the conspicuous absence of climate policy at the federal level and a lack of participation in any international climate agreement. Both countries are also representative of the antagonism that still dominates much of the current discussion over forging a new UN climate treaty. The Senate, the upper house of the US Congress, has previously expressed its opposition to joining any agreement that does not include major developing countries such as China; China has insisted that western countries take responsibility for a problem that they caused and provide assistance for developing countries in the form of finance and technology to move them toward a low-carbon pathway.

Yet both countries have an unprecedented opportunity to move beyond this impasse. There has been a sea change in Chinese leadership on climate change during the past few years. China is now embarking on some of the world’s most aggressive energy efficiency, renewable energy and forestry projects. The recent change in presidential leadership in the United States has heralded a fundamental shift in climate policy, with president Barack Obama laying the foundation for a domestic transition to a clean-energy economy in his initial economic stimulus package. This was quickly followed by passage of the first comprehensive climate and energy legislation in the House of Representatives, the lower house of the US Congress. Both countries have emerged as active and productive participants in the international negotiating process in the UN Framework Convention on Climate Change (UNFCCC) and leaders in smaller rounds of negotiations in the G-8, G-20, and Major Economies Forum.

A series of recent developments have raised the prospects of more concrete US-China cooperation on climate change, including US energy secretary Steven Chu’s visit to China, which resulted in the announcement of a joint US-China clean energy research center, declarations at the Major Economies Forum on Energy and Climate after the last G-8 summit in Italy in July and a memorandum of understanding (MOU) on energy and climate signed later in the month at the US-China Strategic and Economic Dialogue in Washington, DC.

President Obama is preparing to leave for the US-China summit in Beijing, and the time has never been more ripe for the launch of a commitment between both countries to embark on a collaboration on clean energy that will not only benefit China and the United States, but also have a galvanising effect for the rest of the world to move towards a successful outcome in Copenhagen.

The July MOU from the Strategic and Economic Dialogue identifies 10 specific areas for cooperation between the United States and China on low-carbon technology and climate change, including energy efficiency, electric cars and carbon capture and sequestration. General declarations of goodwill are a necessary step for cooperation, but the upcoming summit must put meat on these bones and focus on specific proposals for collaboration. Our aim in this new report is to provide just such a proposal for discussion and as the basis for action.

All of the areas for low-carbon and clean-energy cooperation identified in the July US-China MOU must be pursued. Nothing in our report should be interpreted as suggesting that any one of these is more important than any other. There is a compelling argument, however, that neither country can achieve the emissions reductions it needs to make without addressing its heavy reliance on coal. For this reason, secretary Chu issued on October 12 a “call to action” on CCS, advocating widespread, affordable deployment of this technology.

CCS is a process that separates and captures carbon dioxide from large point sources, such as coal power plants, and stores it away from the atmosphere by several means, including underground sequestration in geological formations. Our proposal for US-China collaboration on CCS technology answers this call by helping to prove, or not, the feasibility of this technology as part of the solution to climate change.

We identify three areas of collaboration for the United States and China in the development of CCS technologies in the short-, medium- and long-term, navigating potential political, technological, financial and regulatory hurdles.

1. Cooperation on sequestration of pure carbon dioxide (CO2) streams from existing Chinese industrial plants. There are now approximately 100 facilities throughout China producing pure streams of CO2 for various industrial purposes. This climate pollution is vented unabated into the atmosphere where it contributes to global warming. China also has a large documented geological storage capacity, consisting mostly of deep saline formations. A first step to mitigate these emissions can be to jointly fund five geological sequestration projects that can easily capture this source of carbon and store 2 million to 3 million tonnes of CO2 per year. Each project would cost US$50 million to $100 million, with the United States contributing $20 million to $40 million. Together, these sites could sequester 10 million to 15 million tonnes of CO2 per year, equivalent to taking 1.7 million to 2.5 million cars off the road.

2. Invest in research-and-development for retrofitting existing power plants. Much attention has been placed in both countries on producing a new generation of integrated coal-fired electricity plants that combine power production, capture of CO2 and sequestration. But both countries will have to maintain huge fleets of traditional plants in the short- to medium-term that will have to be retrofitted later for capture and sequestration. China and the United States should therefore develop a strategy for research, development and deployment of a series of pilot facilities for CCS retrofits for existing coal power plants under the auspices of the already planned US-China joint clean energy research centre.

3. Catalyze markets for CCS. China and the United States will have to mobilise private capital to fund the plants envisioned in step two by investing public funds and stimulating public-private partnerships. This focuses on developing financial incentives for companies to invest in cooperation initially through government-backed public finance structures that serve as a bridge to market mechanisms such as a carbon offset regime that includes proven CCS facilities and the creation of a global market for carbon abatement.

Cooperation in these three areas could accelerate CCS deployment in the United States by five to 10 years. This would deliver immense gains for US job creation and consumer savings and more than compensate for American investment in this roadmap. Under a business-as-usual scenario, a proven CCS sector would create 127,000 jobs in the United States by 2022, including jobs in equipment manufacturing and infrastructure construction. A five-year acceleration of CCS deployment as a result of US-China collaboration increases that figure to 430,000. A 10-year acceleration in deployment could create as many as 940,000 new US jobs by 2022. Collaboration will also quickly help lower the cost of CSS, and such savings will be passed along to electricity consumers. A five-year acceleration of CCS deployment in the United States would lead to US$5 billion in savings, and a 10-year acceleration would lead to $18 billion in savings.

Cooperation between the United States and China on this roadmap would also serve as an example of a specific bilateral step that the two countries could take together on climate change for mutual benefit. Our hope is that the recommendations contained here have the potential to contribute to—in the words of presidents Hu and Obama—a “positive, cooperative and comprehensive” Sino-American relationship for the 21st century. Such a relationship could become the cornerstone for a new era of greater cooperation between developed and developing countries overall on finding solutions to climate change by setting an example that could be emulated and duplicated many times over.

Read the full report: “A Roadmap for U.S.-China Collaboration on Carbon Capture and Sequestration” [pdf] (Chinese version here)

John Podesta is president and CEO, Andrew Light is senior fellow, and Julian L Wong is a senior policy analyst at the Center for American Progress. Orville Schell is the Arthur Ross director for the Asia Society Center for US-China Relations.

Homepage image from The White House