Obama’s green plan

The American president is taking bold steps to address the energy and climate-change crises, writes Niu Jitao. A Sino-US partnership will have a vital role to play.

Since his election victory, US president Barack Obama has made decisive steps to deliver campaign promises on environment and energy. The nomination of the environment team, with Nobel Prize laureate Steven Chu as energy secretary and Harvard professor John Holdren as science advisor, signals his determination to tackle climate change and develop alternative energy sources. In the first week of his presidency, Obama wasted no time in issuing two memoranda: one ordering the Transportation Department to work out rules for automakers to improve fuel efficiency by 2010; and the other allowing the Environmental Protection Agency to let California set tougher tailpipe standards than are applied nationally. Moreover, the US$787 billion stimulus package includes a tax break for renewable energy development, billions of dollars to modernise the power transmission grid to support renewable power and money to retrofit public housing.

The US financial system has been battered by the fallout from the sub-prime crisis, Iraq continues to stretch the military and national budget beyond capacity and the US image in the world is in tatters. One might think the environment would represent the least of the new president’s worries. But now is a critical time to put energy and environment at the centre of the US national agenda. By prioritizing green, the Obama administration can add a new engine to the economy and redeem the country’s image as a responsible global leader. This also presents a great opportunity for China and the United States to jointly explore solutions to environmental problems, bringing the two countries’ economies and governments into a closer partnership.

The Obama campaign’s platform on energy and environment is the cornerstone of his strategy to free America from its dependence on fossil fuels. His plan calls for the United States to invest US$150 billion over 10 years in renewable energy technology, implement an economy wide cap-and-trade program to regulate greenhouse gases and re-engage in United Nations-led climate talks. Although the new energy plan’s US$150 billion price tag has caused critics to question whether Obama can maintain his commitment to such a costly program in the midst of a worsening financial crisis, it incorporates income-generating mechanisms that would offset most, if not all, of the costs associated with making America green.

As a starting point, the Obama plan calls for an economy wide cap-and-trade scheme that will encourage enterprises to find innovative and efficient ways to cut greenhouse-gas emissions. The new administration will push Congress to pass the bill at the earliest date possible. The revenue generated through auctioning greenhouse-gas emission permits will fund US$150 billion investment in green technology over 10 years and thus would be self-sustaining. 

A greater challenge for Obama will be ensuring that climate protection and energy-efficiency initiatives at home will proceed in tandem with substantial commitments from developing countries, most importantly China. Obama said as much when he declared that climate change was a “common challenge” that had seen little progress. “For too long [the United States and China] have pointed a finger at the other’s attitudes as an excuse for not itself doing more,” he wrote in September 2008 in an essay for the American Chamber for Commerce in China. Indeed, the US rejection of the 1997 Kyoto Protocol and the failure of the UN-sponsored 2007 Bali climate-change conference can be partially blamed on the inability of the United States and China to come to an agreement on each country’s responsibilities towards addressing climate change. As the new US administration renews its leadership in tackling climate change, the world will also expect China, though a developing country, to adopt stronger policies as well.

Energy and climate change will likely be the defining issues of Sino-US relations for years to come. As the United States and China account for almost half of the world’s energy use and greenhouse-gas emissions, both countries must push forward an energy revolution to address energy security and climate change. In the area of greenhouse-gas emissions, both countries must reduce their reliance on coal, which accounts for 78% of electricity production in China and 50% in the United States. Similarly, both countries face enormous challenges in the transportation sector as the US accounts for 25% of world oil consumption, more than 60% of which is used for transportation. Meanwhile, the International Energy Agency predicts that car ownership in China will rise from the current 50 million to 270 million by 2030. A February 2008 Science policy brief cautioned that by 2030, China’s carbon emissions will reach eight gigatonnes a year, given current rates of growth.

Although China has clearly been reticent in addressing climate change, it has also made strides to improve. Chinese officials have, in recent years, been acting like climate-change converts. Facing constant energy shortages and environmental degradation, the government has set an ambitious efficiency target to cut energy use per unit of GDP by 20% from 2006 to 2010. China will raise the share of renewable energy from 7.5% to 15% by 2020, and local government officials will be held accountable if the energy-efficiency targets are not met. As a result of these policies, hundreds of small, inefficient coal-fired power plants in China were shut down last year. The shift towards clean energy has encouraged the growth of China’s renewable energy technologies: the country’s solar photovoltaic cells topped world production last year and a slew of new wind farm projects led Zhang Guobao, director of the National Energy Commission at the National Development and Reform Commission, to predict that China could soon be the world’s largest wind power producer.

The progress of energy and environmental policies on China’s end is an effective antidote to the accusation – often made by US politicians – that the country is holding up global action on climate change. In fact, a study compiled by environmental NGO Germanwatch found last year that China performed better on climate protection than the United States. The study, which ranked 56 of the world’s top carbon dioxide emitters based on a combined index that evaluated emissions trends, levels and the efficacy of its climate policies, placed the United States at fifty-fifth, second only to Saudi Arabia. Both the US and China have made recent strides in tackling climate change, yet it remains a daunting task for both countries. The key, as Obama argued during the campaign, is to recognise that the challenges posed by climate change are global in scope and use this as an opportunity to establish a stronger bilateral partnership.

Niu Jitao is a Master of Public Administration student at the Harvard Kennedy School of Government. He previously worked for China’s Ministry of Foreign Affairs and served as climate and energy campaigner for Greenpeace.

This article appeared in an earlier form in China Security (Autumn 2008).

 Homepage photo by Pete Souza/White House photo