China and Climate Co-operation
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China and Climate Cooperation – Prospects for the Future RAPPORT 5448 • FEBRUARI 2005 China and Climate Co-operation Prospects for the Future A 2004 country study for the Swedish Environmental Protection Agency 2005 Joakim Nordqvist Environmental and Energy Systems Studies Lund University Joakim.Nordqvist@miljo.lth.se This report, originally published in Swedish, has been translated into English on behalf of the Swedish Environmental Protection Agency. ii Table of Contents Abbreviations and Acronyms.............................................................................................. v Summary ........................................................................................................................... vii 1 Population and Government............................................................................................. 1 2 Economic Profile.............................................................................................................. 1 3 Energy Profile .................................................................................................................. 2 4 Climate Indicators ............................................................................................................ 7 4.1 Carbon dioxide profile .............................................................................................. 7 4.2 Other greenhouse gases than carbon dioxide .......................................................... 10 4.3 Chinese climate policy in brief................................................................................ 10 5 The Climate Arena in China........................................................................................... 11 5.1 Institutional structure for processing climate issues ............................................... 11 5.2 Competence centres for climate policy and climate science................................... 12 5.3 Trade and industry and the climate issue ................................................................ 13 5.4 Civil society............................................................................................................. 14 5.4.1 The media and educational institutions............................................................ 15 5.4.2 Non-governmental organisations ..................................................................... 15 5.5 Bilateral and multilateral co-operation.................................................................... 16 6 The Position of Environmental Policy ........................................................................... 17 7. Incentives in Climate Contexts ..................................................................................... 19 7.1 Perspectives and key concepts ................................................................................ 19 7.1.1 The foreign policy perspective......................................................................... 19 7.1.2 The domestic policy perspective ...................................................................... 20 7.1.3 The scientific perspective................................................................................. 21 7.2 China’s priorities ..................................................................................................... 21 7.2.1 Development .................................................................................................... 22 7.2.2 Economic growth ............................................................................................. 22 7.2.3 Sustainability.................................................................................................... 23 7.2.4 Energy security................................................................................................. 23 7.2.5 Technological advancement............................................................................. 24 7.2.6 Strategic development security ........................................................................ 24 8 Opportunities and Limitations Beyond 2012 ................................................................. 25 8.1 The Kyoto heritage.................................................................................................. 25 8.1.1 National emission commitments ...................................................................... 25 8.1.2 The Clean Development Mechanism ............................................................... 26 8.2 Potential key issues beyond Kyoto.......................................................................... 28 8.2.1 Technology co-operation.................................................................................. 28 8.2.2 Internal actors and incentive structures............................................................ 29 9 Conclusions .................................................................................................................... 32 Literature and References.................................................................................................. 34 iii iv Abbreviations and Acronyms ADB Agr. AIJ AMM APEC ASEAN BP C C5 CAAC CAS CASS CBM CCICED CCT CCTV CDM CERUPT cf. CH4 CIIC CMA CMM CNY CO2 COC DNA DRC ERI ESTH et al. EU EU-15 g GDP GEF GJ GONGO HFC i.e. IEA IPCC kWh Asian Development Bank agriculture Activities Implemented Jointly abandoned mine methane Asia-Pacific Economic Cooperation Association of South-East Asian Nations British Petroleum carbon (chemical symbol) Canada-China Cooperation in Climate Change Civil Aviation Administration of China Chinese Academy of Sciences Chinese Academy of Social Sciences coal-bed methane China Council for International Cooperation on Environment and Development clean coal technologies China Central Television Clean Development Mechanism Certified Emission Reduction Unit Procurement Tender confer (Latin: “compare”) methane (chemical symbol) China Internet Information Center China Meteorological Administration coal-mine methane Chinese yuan (international currency code) carbon dioxide (chemical symbol) China’s Organizing Committee for the World Summit on Sustainable Development designated national authority Development Research Center of the State Council Energy Research Institute Environment, Science, Technology & Health Section of the United States Embassy Beijing et alia (Latin: “and others”) European Union The fifteen Member States constituting the European Union from January 1995 to April 2004, i.e. Austria, Belgium, Denmark, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, Sweden and the United Kingdom grammes gross domestic product Global Environment Facility gigajoules government-organised non-governmental organisation hydrofluorocarbon id est (Latin: “that is”) International Energy Agency Intergovernmental Panel on Climate Change kilowatt hours v MCA MFA MOA MOC MOF MOFCOM MOST Mt MWh MWR N2O NBS NC4 NDRC NGO PCF PFC Res. RMB SEPA SF6 SFA SOA STEM tce TFEST toe Trpt. TWh UN UNDP USA USD WTO WWF ZKG Ministry of Civil Affairs Ministry of Foreign Affairs Ministry of Agriculture Ministry of Communications; Ministry of Construction Ministry of Finance Ministry of Commerce Ministry of Science and Technology megatonnes megawatt hours Ministry of Water Resources nitrous oxide or laughing gas (chemical symbol) National Bureau of Statistics National Coordination Committee on Climate Change National Development and Reform Commission non-governmental organisation Prototype Carbon Fund perfluorinated carbon residential rénmínbì (Chinese: “people’s currency”) State Environmental Protection Administration sulphur hexafluoride (chemical symbol) State Forestry Administration State Oceanic Administration Swedish Energy Agency tonnes of coal equivalent Task Force on Energy Strategies and Technologies tonnes of oil equivalent transportation terawatt hours United Nations United Nations Development Programme United States of America US dollar (international currency code) World Trade Organisation Worldwide Fund for Nature Zement, Kalk, Gips (German: “cement, lime, gypsum”) vi Summary Climate change, as an environmental issue of transboundary significance, has brought about an international negotiation process and debate over global climate co-operation. A centrepiece of this process is the United Nations Framework Convention on Climate Change, signed during the 1992 Earth Summit in Rio de Janeiro. More than ten years later, the world now faces the challenge of choosing the direction of its ongoing efforts to deal with and combat anthropogenic climate change. At the top of the agenda is the issue of how to progress in the wake of, and beyond, the Kyoto Protocol—the controversial declaration of ambitions from 1997, in which developed countries have committed themselves to limiting their emissions of greenhouse gases. Carbon dioxide is commonly regarded as the most important greenhouse gas. Among the nations of the world, the United States and China are the leading carbon dioxide emitters, but of the two only China has approved the Kyoto Protocol. However, the treaty does not impose any quantitative restrictions on China regarding its emissions. The aim of this report is to analyse the following question: What incentives, and what willingness and prospects, exist for more extensive participation by modern China in future international climate co-operation? The climate issue may be viewed from a variety of perspectives. With Chinese conditions in mind, three dominate. These are (i) science, (ii) domestic policy, and (iii) foreign policy. Each of them sheds a different light on the issue. The scientific perspective on climate is represented in China by an academic community with few channels to the much narrower circle of people that formulate and epitomise the two political climate perspectives. Alike in many ways, these, in turn, differ in that they are driven by separate paradigms. Whereas the main underlying concern of Chinese domestic policy is social stability, foreign policy is characterised by a strongly perceived need to uphold and defend China’s status and integrity in the eyes or the international community. Of course, climate science and domestic and foreign climate policy all interact and influence each other. However, in order to better grasp the ways in which the climate issue is perceived in China, it is helpful to view these perspectives in parallel, rather than intertwined. For an outside observer, such a stance may be helpful in discerning such mechanisms and features that might cause confusion and make constructive international climate co-operation difficult. A concrete example of such confusion is the process by which the country’s political leadership has arrived at its current position of openness towards the notion of China as a host to projects under the Kyoto Protocol’s Clean Development Mechanism. Depending on the insight and vantage point of the observer, this position may be understood as having taken shape either inscrutably and haphazardly, or steadily and consistently. China is a developing country. This general statement lies at the heart of the country’s standpoints towards international climate co-operation. It also constitutes the basis for at least six important priorities, which together envelop China’s involvement in climate issues as well as all its perceptions of the field. Without ranking them, these six priorities are: development, economic growth, sustainability, energy security, technological advancement and strategic development security. They are briefly described and commented on in the following paragraphs. The relative importance attributed to the different priorities varies depending on the context in which the climate issue is addressed. The term “context” is here meant to include the cast of actors involved, as well as their understandings of the set of relevant perspectives (i.e. science, and domestic and foreign policy) in combination with numerous other factors of greater or lesser significance. vii Development is a central concept in Chinese politics, where it should be understood in a positivist sense as a technology-oriented process of societal improvement. Modernisation is another expression of the same aspiration, which has bearing on domestic as well as on foreign policy. If the leadership fails to maintain the spirit of a positive development trend, it essentially endangers its claim to legitimacy as the people’s representative and agent. Therein lies the domestic importance of development. In terms of foreign policy, its significance pertains partly to strategic interests (cf. “strategic development security” below), and partly to international status. To China, prominence in the competition among nations is an important matter, and development is seen as an essential field in which the country must not lose ground, but advance. Economic growth is seen both as a prerequisite for the ambitions of development and modernisation, and as their chief indicator. It is mainly regarded as a domestic concern. Protectionism, national as well as local, constitutes a significant part of the ideas and ideals of how to create and shape economic growth. China’s membership of the World Trade Organisation might, however, gradually influence such perceptions. Sustainability, in turn, concerns the need not to limit the space for human sustenance, for growth and development. Through this priority, environmental issues have made their way onto China’s political agenda. The major sustainability concern, which has confronted the Chinese leadership for decades, however, is more socially and demographically oriented. China’s efforts to curb population growth include the well-known, or infamous, single-child policy, which allows only one child per family. In China, sustainability issues are primarily considered a domestic matter. Energy security is also a sustainability issue of sorts, and one which is intimately connected to the challenge of climate change. It is also of particular significance in China. The country is dependent on domestic fossil coal as its predominant source of primary energy, but logistic difficulties, shortcomings in quality and efficiency, technical limitations, etc., are all causes for concern. At the same time, however, the importance of safeguarding energy supplies constitutes an argument for China’s sustained focus on the further development of so-called clean coal technologies. Technological advancement naturally carries domestic as well as scientific weight. This is expressed through the pursuit of a political environment that encourages and supports domestic innovation as well as research, development and demonstration. This priority also has relevance from a foreign-policy perspective, for example as a component of bilateral and multilateral development co-operation. The concept of technology transfer, which in China is seen as an important part of the wording and spirit of the Climate Convention, is often associated with such contexts. Strategic development security is in essence an expression of risk aversion. Here, security is contrasted with the risk of jeopardising the momentum of development achieved over the past quarter century of reforms. In defence of this priority, the main argument is that China must not engage in experiments with novel development paths. The country has an obligation to its people to pursue courses of development that are secure, in the sense that they have already been proven effective elsewhere. Thus, China cannot assume a leadership role as an international testing ground for new, and therefore uncertain, policies and measures, as these might negatively affect the pace of development. As is indicated by their descriptions above, each of the six priorities presented here is related to the other ones. They are also, though in varying degrees, related to three key concerns, which centre on China’s rights, on the obligations of the international community, and on natural limitations. The illustration below shows one way of representing the connection between the major priorities and these three key concerns. viii Prioritised issues Development Economic growth Technological advancement Strategic development security Energy security Sustainability Key concerns China’s rights International community’s obligations Natural limitations To China, as a developing country, development, growth and technological advancement are inviolable rights, which must not be threatened. Sustainability and energy security constitute limitations, which nevertheless represent natural threats to the exercise of such rights, and which therefore warrant attention, at least domestically. Technological advancement and strategic development security are both aspects and parts of the moral obligation owed to China by the industrialised world. China is perceived to have the right to follow in the footsteps of other nations, which through their relative lead over China, as well as through their formal, international commitments, must be prepared to pave and show the way forward. Although not as articulated as the previously listed priorities, these three key concerns capture common and deeply rooted sentiments in China, well worthy of attention. In general it is wise always to remain attentive to which of the above priorities and concerns that, in a certain context, constitute weak spots and the most serious obstacles to accord—not least when seeking to understand Chinese positions in the climate issue, and when engaging in climate discussions with Chinese representatives. The above illustration may be helpful in preparations for such contacts. It is also worth underlining here the potential importance of bilateral dialogues as opportunities to create mutual understanding, which in turn, and in the longer run, may allow agreement in subsequent multilateral discussions. Chinese policy positions are firm and typically rest on an intricate substructure. The country’s hierarchical make-up notwithstanding, its culture is strongly consensus-oriented. This means that internal support and approval from the appropriate authorities has to be established before public standpoints can be adopted. In the case of climate policy, a national co-ordination committee has been instituted for this explicit purpose. The insights brought forward in this report, including the ones presented so far, underpin the opinion that international leadership from China should not be expected where climate change issues are concerned. However, if conflicts originating in rhetoric and mistrust can be avoided, a constructive climate for cooperation ought certainly to be possible. As a result of their global importance and their topicality in world politics, the challenges of climate change have developed into an issue distinctly and specifically dominated by the foreign-policy dimension. Thus, in China, they are also intimately connected with national prestige. Therefore, it would be strategically favourable for items on the international climate co-operation agenda to centre more upon needs than on obligations and duty, in order to avoid such obstacles that may otherwise and perhaps unnecessarily arise. Needs, as far as China is concerned, are primarily linked to social stability founded on discernable societal progression. In other words, shifting the weight from a foreign-policy to a domestic perspective is to be recommended. It should be noted that observations and recommendations made in this report in no way are intended as urging the uncritical adoption of Chinese views and ideas. Instead, the message is to emphasise the importance of reciprocal trust and appreciation of differences as key strategies to improve the conduciveness of international negotiations. The chances of reaching constructive future agreements can be furthered by supporting and participating in new, as well as existing, fora for informal and sincere exchanges of experiences and ideas. ix On a more concrete level, concerning the actual willingness and scope for an expansion of Chinese participation in future international climate co-operation, a number of issues require specific attention. Barriers abound, not least within the foreign-policy sphere. There should nevertheless be room for greater Chinese involvement, although the ability of other stakeholders to appreciate the Chinese context may be instrumental and necessary in achieving progress. Some of the most important issues are commented on below: National commitments. China, like the European Union and Sweden, has formally approved or ratified the Kyoto Protocol. The provisions of the Protocol, including—for developed countries—the emission targets for the 2008–2012 commitment period, may therefore be seen as having a moral imperative, regardless of whether they ever legally enter into force. A breach of the treaty will not pass unnoticed by China, whose involvement in future climate agreements will not exceed the achievements of today’s developed countries. China has no intention of jeopardising its development policies. Therefore, the international community, in order to persuade the country to choose a new and more sustainable path of development, will first have to demonstrate that such a path is navigable. In addition, the word commitment has, in Chinese climate circles, attained strong connotations of the concept of sacrifice, which means that it cannot now be understood as something which confers benefits on the committed party. This interpretation effectively gridlocks any discussion about commitments by China. Consequently, in the Chinese context, a terminology centred on ambition is likely to be considerably more conducive to progress in climate performance. An example of a possible ambition—and one which, in a way, is already internalised in the international climate process through the mandatory submission by Convention parties of socalled national communications—could be openness regarding otherwise potentially sensitive environmental and climate-related information. In this area, concrete agreements on expanded future efforts could be arrived at, not least if Chinese domestic aspects are highlighted. The Clean Development Mechanism. The Kyoto Protocol includes three so-called flexibility mechanisms, which for countries with emission commitments may constitute channels by which to facilitate compliance. The Clean Development Mechanism (CDM) is one of these, and the only one to address climate co-operation between developed and developing countries. Concerns have been voiced over the CDM possibly becoming totally dominated by China-based projects. The probability or risk of this occurring, according to the arguments behind such concerns, could be considerable in light of China’s rapid industrial and economic growth—in combination with the substantial technical opportunities that exist for reducing the country’s greenhouse gas emissions. Remarks of varying seriousness have been made about the CDM as a presumptive “China Development Mechanism”. In China itself, however, a sceptical attitude towards the CDM has long been dominant. There were fears that developed countries would be able to use the mechanism as a means by which they could escape the moral obligation of addressing their domestic excessive greenhouse gas emissions, and shift the burden of climate change mitigation over to developing countries with far lower per-capita emissions. The efforts of such countries to modernise and progress would then be most unfairly impeded. These fears have now, in official circles, been reduced in light of the evolution of regulatory frameworks for the CDM, and China has accordingly declared its acceptance of hosting CDM projects. The concept of unilateral CDM projects is, however, rejected by the Chinese. Expectations on the actual effects of CDM in China are essentially moderate, even though the large potential for projects is also pointed out. A distillate of the observations made here would suggest that, with Chinese inertia in terms of climate co-operation in mind, as exemplified in the case of CDM, it would probably be counterproductive not to maintain, as much as possible, the momentum laboriously gained in this particular field—regardless of the fate of the Kyoto Protocol. x Technology co-operation. A commitment to the promotion and facilitation of technology transfer from developed to developing countries is integrated into the Climate Convention. Ideas about what constitutes such promotion and facilitation, however, differ amongst stakeholders. From a Chinese perspective, the understanding of these concepts is wholly oriented towards tangible and government-driven action. This view contrasts the Western focus which gravitates more towards governance and incentive structures. Whereas a business project under the CDM, by Western standards, might well be considered as an element and act of technology transfer, such a stance can be indignantly viewed by the Chinese as a violation of the very spirit of the Climate Convention. They expect governments, not business, as actors. In China’s view, the obvious lack of attention so far paid to “real” technology transfer in the climate context is an evident sign of the unwillingness and hypocritical attitude of Western nations towards concrete undertakings and actual delivery. Therefore, a significant step in the preparations for new agreements and treaties would be to explicitly bring this topic to the fore. In order to build faith one must first create an overarching understanding about the fact that preconceptions about technology transfer are dependent on social order and context, as are the conditions for its promotion. It is essential to hold discussions, which address the often ignored or unrecognised differences in viewpoint that rankle in this part of the international climate process. Until such an opening is achieved, it is hard to see how these fundamental differences are to be bridged and constructive agreements reached. For example, it is unlikely—in view of China’s centralist and government-focused views on technology transfer—to win Chinese support for international climate co-operation in which actors within certain industrial sectors, rather than governments, are contracting parties. A spontaneous embryo of something to this effect can nevertheless be observed within the global cement industry. On China’s part, there is interest instead in climate-related technical co-operation within the energy field. Like China, the United States rely on a large share of fossil coal in their energy supply. Consequently, since the two countries in this respect may be thought to face similar technical challenges, China anticipates that there will be room for an expanded exchange of mutually beneficial knowledge, experience and technology. In relation to the European Union, where the proportion of coal in the energy supply is considerably smaller, it is instead developments within renewable and alternative energy sources that attract Chinese interest. This field is also one in which Sweden may be well suited for participation. Internal actors and incentive structures. China is a vast country with a complex structure of governance. This is an important fact to remember when assessing and trying to understand Chinese positions—not least in the context of climate co-operation. There are, in all, few domestic actors that possess insight and competence in China’s climate policy. The ones that exist are all to be found at central level, whereas the decisions that in reality affect actual climate performance are made by a multitude of completely different actors, who far from seldom are out of step with the preferences of the central leadership. Tradition, however, decrees an appearance of outward unity and conformity, obscuring domestic dissent as well as flaws in the observance of policies. Instruments to promote incentives for increased actor involvement are already part of a Chinese wish list. Much could probably be gained in this respect from an increase in transparency within public administration as well as in its relation to business and industry. Reliable reporting and policy compliance are always on the agenda of environment policy in China, and although much has been accomplished over the past thirty years, grave problems still abound. Industrial emissions in China could, however, be significantly reduced if a presumptive and progressively greater openness in reporting were to occur, leading, in turn, to increased possibilities for the implementation, control and enforcement of already existing policies and laws. xi In conclusion, the following items of importance may be underlined. • Realistic expectations based on an awareness of China’s priorities. • Platforms for sincere dialogue untainted by matters of prestige. • An agenda that recognises the needs and the situation of developing countries. • China’s climate ambitions, rather than its prospective commitments. • Use and progression of already gained momentum and agreement (such as the CDM). • An earnest readiness to address different understandings of what technology-based international climate co-operation should encompass. xii PART I: Overview 1 Population and Government The People’s Republic of China was founded on 1 October 1949 and according to its 1982 constitution it is a “socialist state under the people’s democratic dictatorship”. At the highest administrative level the country consists of four municipalities, 22 provinces1 and five autonomous regions. Apart from these, there are two autonomous “special administrative regions”, Hong Kong and Macao. In the most recent census (2000), the population of China not including Hong Kong, Macao and Taiwan was just under 1.27 billion2. More than 91 per cent of the population belong to the han ethnic group (Daniel 2003). The remaining eight to nine per cent belong to 55 recognised minority populations. The Chinese Head of State is the President (Hu Jintao). The highest political and legislative organ is the National People’s Congress, which convenes for two weeks a year. When it is not in session, it is represented by a Standing Committee. Members of the National People’s Congress represent constituencies that consist of the people’s congresses of the next lower administrative tier and the People’s Liberation Army. Executive power is vested in the cabinet, called the State Council, led by the Premier (Wen Jiabao). The cabinet has ministers who head ministries or state commissions.3 At the same level as the State Council are the Central Military Commission, the Supreme People’s Court and the Supreme People’s Procuratorate, see Figure 1. The Chinese Communist Party exercises great influence over the state apparatus, including leading the National People’s Consultative Conference, the National Committee of which is organised in the same way as the National People’s Congress, but whose members represent the Communist Party and other approved political parties and organisations. The National Committee may be seen as a sort of upper chamber to the National People’s Congress. The term of office of all central political institutions is five years (CIIC 2003, Daniel 2003). Structures of authority at lower administrative levels mirror the structure of central government. Figure 1. Chinese central government Source: CIIC 2003 2 Economic Profile Development of the economy of modern China from that of a planned economy to a mixed economy began with the launch of the Open Door policy under Deng Xiaoping after 1978 (Riskin 1987). This new policy was a marked change from the isolationism that had characterised the previous years and the officially recently completed Cultural Revolution. In the quarter-century since then, Chinese society has undergone sweeping social, political and 1 The province of Taiwan is not included here since its government is not sanctioned by the People’s Republic of China. 2 Throughout this report, the word “billion” is used in the meaning “thousand million”, i.e. a factor 109. 3 The State Council also includes a number of vice-premiers and state councillors, as well as the State Council Secretary General, the Auditor-General and the Governor of the People’s Bank of China. 1 economic change. The state five-year plans have changed from being obligatory to being targets, agriculture has been decollectivised, state-owned industry has been turned into corporations, private enterprises are permitted, foreign investment is accepted and a number of institutional reforms have been implemented (Zhao 2001). The ambitious political goal of quadrupling the country’s economic activity and GDP from 1980 to 2000 was achieved in 1995, far ahead of time (Bach and Fiebig 1998). Measured in a stable value of money (1995 CNY4), GDP climbed from 1 400 billion yuan in 1980 to 8 700 billion yuan in 2000 (Fridley 2001, Table 10B.1.2; cf. Table 1 below). It is hoped that this performance can be repeated: a new quadrupling target has been announced for the 2000–2020 period (DRC 2003). China is already one of the world’s leading nations in terms of GDP, second only to the United States if counted in purchasing power parity (IEA 2002) – but counted per capita, the picture is of course different (see Table 1). The composition of the economy has changed apace with its growth. From 1979 to 1999, agriculture’s share of GDP fell from 31 to 17 per cent while that of the service economy increased from 21 to 33 per cent. Industry’s share was just under 50 per cent at the beginning as well as at the end of the period (Fridley 2001, Tables 10B 1.3, 4, 6; cf. UN 2003, Table 22). The corresponding figure for Sweden in the mid-1990s was just over 2 per cent for the land-based industries, just under 70 per cent for the service sector and just under 30 per cent for industry (UN 2003, Table 22). Source: IEA 2002, Table 8 Table 1. GDP 2000 for China, Sweden and the USA GDP (billion 1995 USD) China Sweden USA GDP per capita (1995 USD) exchange rate based purchasing power parity exchange rate based purchasing power parity 1 000 280 9 000 4 700 200 9 000 820 31 000 33 000 3 700 23 000 33 000 China’s economic expansion has been revolutionary and not without problems. One of the most important political goals of central government, as pointed to in recent years, is the evening out of increasing geographical imbalance in economic development (COC 2002). The gap between the centres of growth along the eastern and southern coasts and the poorer western inland provinces has grown incessantly. Increasing unemployment in the wake of reform of state-owned industry also threatens the stable social development that is the overriding goal of the state. In addition, the fast growth of non-state, primarily small-scale industry in the 1980s and 1990s exacerbates acute and long-term environmental problems (Economy 2003, 1998). 3 Energy Profile China uses a lot of energy. The country is today the second largest global energy user after the United States (Fridley 2001, Halldin 1998). Of course, figures vary according to information source and method of calculation, but Figure 2 gives an idea of current levels. Of total global 4 The Chinese currency, the yuan (CNY), has for many years followed the value of the USD at an exchange rate of just under 8.28 yuan to the dollar. At the time of writing (December 2003), this corresponds to approximately 1.13 yuan to the Swedish crown. (In China as well as in international contexts, the currency abbreviation RMB is often used, which is short for rénmínbì, “people’s currency”). 2 commercial primary energy use of about 98 000 TWh5 in 1998, the USA consumed 24 000 TWh and China about 11 000 TWh (Fridley 2001, Table 9B.2.26). These numbers may be compared with the corresponding Swedish figure of 620 TWh (STEM 1999, Figure 1). Chinese energy supply has two important characteristics; these are the domination of coal as an energy source, and industry’s large share of energy use. As a rule of thumb, both amount to around seventy per cent. The explanations for this are that China is rich in coal while other conventional energy raw materials are much less available, and that Chinese industry on the whole has poorer energy performance than corresponding production in many other countries. TWh 11 400 9 800 8 100 6 500 4 900 3 300 1 600 0 Figure 2. Chinese commercial primary energy use Source: Fridley 2001, Figure 4A.1.2 China’s energy use has increased considerably over the past twenty-five years. At the same time, the amount of biomass used for energy purposes outside the commercial energy market is regarded as having remained more or less constant at about 1 800–1 900 TWh. Bioenergy’s share of the total energy balance has therefore probably been more or less halved from almost 30 to less than 15 per cent from the early 1980s to the late 1990s. The mix of energy carriers in commercial primary energy use, however, has not changed significantly. The proportion of coal has typically stayed between three quarters and two thirds, while oil has taken up about one fifth and natural gas only one or two per cent, if that. Primary electricity’s share – mainly consisting of hydroelectric power – has shown considerable growth, but from a low level (Fridley 2001, Table 2A 1.3, Table 4B.1). For more detailed analysis of this, see the fact box on energy statistics in China (pages 6–7). The overwhelming share of Chinese electricity production is thermal, with fossil coal as primary energy source. Great efforts have been made in recent decades to increase the degree of electrification in China. In 2002, 98 per cent of the population had access to electricity (Yang 2003), which is very high for a developing country. The remainder, however, represents a very large number of people. Twenty million people, or almost five million households, are still not connected to the electricity supply (Yang and Yu 2004). What is remarkable, is that the great increase in Chinese energy use over the past twenty-five years still seems moderate compared to the economic growth over the same period. Roughly speaking, nominal GDP has more than quadrupled while commercial energy use has only doubled. This means that a more than 50 per cent reduction in the energy 5 In agreement with Swedish tradition, this report uses the watt hour as the base unit for all energy, not only for electricity. For further comments on energy units, including a conversion table, see the fact box on pages 6–7. 6 2000 values from the IEA Online Database. 3 intensity of the Chinese economy has been achieved in a period of unequalled growth. Figure 3 shows the clear break in trend of the development of energy intensity that followed the introduction of the Open Door policy. (The figure also clearly shows the Great Leap Forward: the massive but failed industrialisation campaign of the late 1950s.) Despite all of this, there is still great potential for energy savings in China, not least in industry. kWh per 1995 CNY 5,7 4,9 4,1 3,3 2,4 1,6 0,8 0,0 Figure 3. Energy intensity in the Chinese economy Source: Fridley 2001, Figure 4B.2 Coal will continue to be the most important energy carrier in China’s energy supply for a long time to come. The Chinese Energy Research Institute (ERI) recently published a comprehensive report called China’s sustainable energy scenarios in 2020 (Zhou et al. 2003, Sinton et al. 2003), in which three scenarios are presented. The baseline has been called “Ordinary Effort” and the other two “Promoting Sustainability” and “Green Growth”, see Figure 4. All scenarios assume that the economic target of quadrupled GDP to 2020 is met, but they differ in how it is achieved. The differences affect how the energy carrier mix and the economy’s energy elasticity are expected to develop. 4 TWh 16000 1998: 11 000 TWh 14000 2020 Green Growth: 19 000 TWh 12000 2020 Promoting Sustainability: 22 000 TWh 10000 2020 Ordinary Effort: 25 000 TWh 8000 6000 4000 2000 0 coal oil natural gas Figure 4. Scenarios for China’s commercial energy use primary electricity Source: Zhou et al. 2003, Table 7.7 Another fresh report produced by the China Council for International Cooperation on Environment and Development (CCICED) makes projections to 2050 of China’s expected energy supply (Ni and Johansson 2004, TFEST 2003). In total energy quantity and in general terms the report follows the ERI scenario Green Growth. It also assumes that the pace of energy increase will remain stable during the decades between 2020 and 2050, which would mean a total energy supply of around 30 000 TWh in the middle of this century. Moreover, the report describes two different ways in which to achieve this supply: conventional technology and advanced technology. These alternatives show radical differences in performance, both in terms of energy supply security and environmental impact. The report describes the risk of three growing problems, which may be dealt with by actively promoting the second alternative. These problems are (1) harmful overdependency on imported oil, (2) environmental damage causing rapidly growing stress on the economy (from costing over seven per cent today to thirteen per cent in 2020) and (3) unharnessed increases in the emission of greenhouse gases. The technology mainly promoted in the report is coal gasification, but ordinary natural gas, coal-bed methane7 and renewable energy sources are also proposed as increasingly important energy carriers in the future. Concrete indicators of the performance of the advanced technology scenario include: claims of reduced sulphur dioxide emissions from 24 Mt in 1995 to 16 Mt in 2020 and 8.8 Mt in 2050, of a limitation of import dependency on oil and natural gas to thirty per cent, and of a ceiling for China’s cumulative carbon dioxide emissions at 66 billion tonnes of carbon. 7 For more on coal-mine methane and mine gas, see Chapter 4.2. 5 Fact Box. Energy Statistics in China Statistics for the late 1990s show a remarkable trend in the developments of China’s energy sector, as supply and use of energy declined at the same time as economic growth continued to be high. This peculiar circumstance was the object of much attention and debate in circles that monitor and carry out research on Chinese development (ESTH 2001, Sinton 2001). With hindsight, the situation can be somewhat better understood, but exact details behind the figures remain elusive and diffuse (Sinton and Fridley 2002). The quality of official Chinese statistics deteriorated drastically in the second half of the 1990s in the wake of the institutional changes implemented at that time as part of the transition from a planned to a market economy. The changes took place at roughly the same time as central authorities introduced strict policies on technical minimum performance in a number of key industrial sectors such as coal mining and cement manufacture (ZKG International 2002, Wiemer and Tian 2001, Zhao 2001, Sinton and Fridley 2000). These regulations and their expected effects on production affected industrial energy reporting from local and provincial statistics authorities to the central National Bureau of Statistics (NBS), which received data that more poorly than before mirrored the actual situation. Similarly, industrial incorporation, and the shift of influence over more and more industrial enterprises away from the direct control of the authorities, led to a deteriorating statistical base and gave rise to lags in state data collection (Rawski and Xiao 2001, Wang and Meng 2001). Afterwards, attempts have been made to correct the statistics for these types of errors, and updated versions of the national energy statistics show a smaller downward trend (Sinton and Fridley 2003). Nonetheless, there is reason to suspect that the marked increase reported for the first years of this century partly conceals a return to the statistics of enterprises that in the late 1990s avoided being represented in the figures. The Californian Lawrence Berkeley National Laboratory regularly monitors and comments on Chinese energy statistics, and it edits and publishes a compilation of international statistics devoted to this particular field, called the China Energy Databook (Fridley 2001). In China, and when Chinese circumstances are presented, the usual unit for supply and use of energy is not based on the joule, nor on watt hours or even oil equivalents. Instead, coal equivalents are usually used, where a tonne of standard coal equivalent, 1 tce, equals just under thirty gigajoules, just over eight megawatt hours or about seven hundred kilogrammes of oil equivalent (see conversion table below). This report, however, consistently uses watt hours as the unit of energy, in accordance with Swedish tradition. In international literature this is a unit generally used only for electrical energy. In converting between energy units, one should pay attention to how primary electricity (like hydroelectric power) is counted. There are two different methods. One is based on the factors in the conversion table, while the other compensates for conversion losses, i.e. the fact that primary electricity, if replaced by electricity from thermal power production, requires a larger input of fuel than what its actual energy content suggests. This way of calculating is often used in China and means that 10.0 MWh of hydroelectric power is recalculated in the statistics to 4.04 tce. Not all literature applies this method however, meaning that information about the proportion of primary electricity in the Chinese energy supply can show large apparent differences between different sources. 6 Fact Box. Energy Statistics in China Conversion table. Conversion factors with three significant figures GJ 10.0 29.3 36.0 41.9 tce MWh toe 0.314 1.00 1.23 1.43 2.78 8.14 10.0 11.6 0.239 0.700 0.860 1.00 As a curiosity, it can also be mentioned here that an average tonne of Chinese raw coal does not equate to a tonne of coal equivalent, but only to 0.714 tce (Fridley 2001). 4 Climate Indicators Reports of greenhouse gas emissions are the most common indicator of a country’s climate performance. Chinese emissions are presented below and are supplemented by a brief status description of China’s position in international climate policy. Indicators that focus more on the impact of climate change, such as meteorological and biological factors, are not discussed in this report. 4.1 Carbon dioxide profile China as a nation is the second largest global source of anthropogenic carbon dioxide emissions. Many believe that in fifteen to twenty years, the country will in this respect have overtaken the United States, which currently emit most, but of course opinions vary (Johnston 1998, van Vuuren et al. 2003). Figure 5 below shows how carbon dioxide emissions have developed in the five largest emitting nations in the latter part of the 20th century.8 In 2004, China will submit its first so-called national communication to the secretariat of the Climate Convention, containing detailed descriptions of the country’s emissions of carbon dioxide, methane and nitrous oxide. Ten years will have passed since the reporting of the first comprehensive China greenhouse gas study, which was carried out with the aid of the Global Environment Facility (GEF) (Johnson et al. 1996). This report, which used the Kyoto Protocol reference year 1990 as its point of departure, gave an early and preliminary compilation of China’s greenhouse gas emissions. 8 Those interested in comparing the carbon dioxide emissions of various countries can find on the Internet a data compendium maintained and updated by the Oak Ridge National Laboratory in Tennessee (Marland, Boden and Andres 2003). The address is http://cdiac.esd.ornl.gov/trends/emis/em_cont.htm. 7 Figure 5. Carbon dioxide emissions from the USA, China, USSR (–91), Russia (92–), Japan and India Source: Fridley 2001, Figure 9B.17.1 According to the study, Chinese carbon dioxide emissions in 1990 were just under 680 millions tonnes of carbon, distributed by sector as shown in Table 2. Carbon sinks in the shape of woody plants and ground sequestration were estimated at seven million tonnes of carbon. Table 2. China’s carbon dioxide emissions in 1990 by sector Source: Johnson et al. 1996 Process9 29 Mt C Fossil fuel use 650 Mt C Electrical power production and industry 75 % A B C D E 32 % 15 % 12 % 10 % 10 % A: Power E: Chemicals F 4% G 4% B: Energy production F: Food and tobacco Res. Trpt. Agr. Other 14 % 4% 3% 4% Σ 100 % H 13 % Σ 100 % C: Building materials G: Machinery D: Iron and steel H: Other industry More studies of China’s carbon dioxide emissions were carried out in the 1990s. One funded by the Asian Development Bank (ADB), was completed back in 1993. The GEF study described above was completed the year after. Two studies, funded by the US Department of Energy and the ADB, respectively, were both finished in 1998 (Sinton and Ku 2000, Heij et al. 2001, Ramakrishna et al. 2003). Generally, it can be said that the two earlier studies indicate somewhat higher carbon dioxide emissions in China in 1990 than the later ones do. The 1998 ADB report gives emissions in the reference year of the magnitude of 550 million tonnes of carbon from fuel and 26 million tonnes from industrial processes. Sinks were estimated at ninety million tonnes of carbon. Distribution by sector is roughly the same, however, as in Table 2. Distributed by energy carrier, solid fuels (i.e. largely coal) give rise to 9 For all practical purposes, China’s industrial process emissions may be said to originate from cement manufacture. 8 just under 85 per cent of energy-related emissions, liquid fuels (i.e. petroleum products) just under 14 per cent, and natural gas just over one and a half per cent (ADB 1998, Table 3-6). As a comparison with the above figures, Swedish carbon dioxide emissions in 1990 were 15 million tonnes of carbon, of which one million tonnes resulted from industrial processes and the rest was due to energy use (Miljödepartementet 2001). Carbon sinks were equivalent to five and a half million tonnes. In the 1990s, statistics for Chinese carbon dioxide emissions continued largely to follow the energy statistics, which of course means that the same uncertainty exists concerning developments in the later years of the period as described in the fact box on pages 6–7. According to these figures, Chinese carbon dioxide emissions, starting in 1990, first increased by over thirty percent up to 1997 and then fell over the next three years. Emissions have climbed steeply, however, since the turn of the century. According to BP’s statistics, carbon dioxide emissions in China in 2002 exceeded 1990 emissions by almost forty percent (over 910 Mt C in 2002 compared to just under 660 Mt C in 1990) (Zittel and Treber 2003, Table 2 and Figure 6), and the upward trend continues. China also continues to have the world’s most carbon-dioxide intensive energy supply. This remains true in spite of the fact that intensity fell somewhat, from, in 1990, 3.5 tonnes of carbon dioxide per tonne of oil equivalent in primary energy supply, to just over 3.3 tonnes in 2002 (but with a climbing trend from 2000). In comparison, the United States during the same period remain rather constant at around 2.7 tonnes, as does India at approximately 3.2 tonnes. The countries of EU-15 and Russia, however, both show falling intensities from 2.6 tonnes in 1990 to 2.4 tonnes in 2002 (Zittel and Treber 2003). There are several scenarios for China’s future carbon dioxide emissions. Based on the IPCC’s (the Intergovernmental Panel on Climate Change) Special Report on Emissions Scenarios from 2000, the ERI has produced six scenarios for the period up to the beginning of the next century (Jiang 2002, cf. van Vuuren et al. 2003). According to these scenarios projected emissions in 2100 range from just over half a billion tonnes of carbon at the lowest to just under five billion tonnes of carbon at the highest. The reference scenario follows a steadily climbing trajectory until 2050, after which it levels out and ends up at around three and a half billion tonnes by the end of the century, see Table 3. Table 3. A reference scenario for China’s future CO2 emissions Year Primary energy CO2 emissions [TWh] [Mt C] 2010 15 000 1 100 2030 27 000 2 000 Source: Jiang 2002, Table 2 2050 46 000 3 300 2100 75 000 3 500 These estimates are lower than those of the 1994 GEF study, which predicted that China’s carbon dioxide emissions would, in the reference scenario, amount to some 2 200 million tonnes of carbon as early as 2020 (with a span to the lowest scenario of only 330 million tonnes.) The 1998 ADB study also calculated scenarios for 2020; one reference scenario and two abatement scenarios. These results are shown in Table 4. Table 4. Three scenarios for China’s carbon dioxide emissions in 2020 Source: ADB 1998, Tables 1-7 and 1-8 Scenario Year Primary energy [TWh] CO2 emissions [Mt C] Reference 2010 2020 18 000 24 000 1 300 1 700 9 Abatement-I Abatement-II 2020 2020 21 000 19 000 1 400 1 300 4.2 Other greenhouse gases than carbon dioxide An appendix to the Kyoto Protocol, called Annex A, specifies the substances defined as greenhouse gases by the agreement. Besides carbon dioxide (CO2), the list includes methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6), and the group of chemicals consisting of both completely and partially halogenated fluorocarbons (HFC and PFC compounds). Along with carbon dioxide, methane is of particular importance in China, but it is very difficult to estimate the scope of methane emissions. The greatest sources, however, are rice cultivation, coal mining and livestock keeping. Of China’s greenhouse gas emissions in 1990 (according to the GEF study completed in 1994 and limited to carbon dioxide, methane and nitrous oxide), methane at 36 million tonnes was equivalent to thirteen per cent, counted in carbon dioxide equivalents. Nitrous oxide, according to the same study, was just over two per cent. But as has been said, there are great uncertainties in these measurements. For example, methane release from rice cultivation is said to vary within the quite wide interval of 0.2–0.7 g per square metre and day (Johnson et al. 1996). In discussions about China’s climate performance, and apart from carbon dioxide, the methane released by coal mining has attracted particular attention. Geological coal deposits can contain considerable amounts of methane, and the gas has long been known as a safety risk in mining. The gas also makes a large contribution to the greenhouse effect if it is released freely, but if is collected it can be used, like ordinary natural gas, to reduce the proportion of coal in primary energy use. There is a large technical potential for such methane capture in China. In climate and energy contexts, therefore, coal-bed methane (CBM), coalmine methane (CMM) and abandoned mine methane (AMM) are seen as important untapped natural resources (Haugwitz 2002). 4.3 Chinese climate policy in brief Since the entry into force of the UN Framework Convention on Climate Change in 1994, China is a non-Annex I participant within international efforts to address the climate issue. The work of completing the country’s first national communication under the Climate Convention is still underway (in December 2003) but is in its final stages. The report is expected to be received by the Convention Secretariat in Bonn during 2004. The main feature of China’s international climate policy is the principle of all countries’ common but differentiated responsibilities for measures addressing the threat of climate change. The official interpretation of this principle means that Chinese commitments to limit emissions of greenhouse gases cannot be accepted until (1) the developed countries accept, and act upon, their responsibility and (2) China has achieved an economic standard (in per capita GDP) that corresponds to an average developed country. The latter condition might, according to some estimates, be expected to be fulfilled at some point in the middle of this century (Haugwitz 2002). China’s position should not, however, be understood to mean that the country does not intend to take steps to limit emissions, but rather that such steps will be taken on China’s own terms. China’s domestic climate policy is strategically subordinate to the issue of sustainable development, which covers a wide range of subjects whose common feature is that they touch on the country’s prospects of a continued and stable increase in wealth and welfare. These subjects include economic growth, demographics and resource allocation, as well as issues concerning health, environment and supply issues etc. Therefore several central authorities are 10 involved.10 In time for the World Summit on Sustainable Development in Johannesburg in 2002, the government had a report compiled that describes the country’s challenges and strategies in its attempts to achieve greater sustainability (COC 2002). There is awareness in the central leadership that anthropogenic climate change threatens to hamper the country’s development, and so it is admitted that the climate issue is important to China. So far, however, this awareness has not spread much within authorities, neither national ones nor at lower political levels, nor within society at large. This means that local support for climate policy is poor. The announcement of China’s formal approval11 of the Kyoto Protocol was made at the Johannesburg summit in 2002. China agrees to act as a host country for projects under the Clean Development Mechanism, and the building of national capacity and the creation of institutions necessary for such participation are underway. (ESTH 2003b.) 5 The Climate Arena in China To obtain an overview of the factors that define China’s climate position and describe its dynamics, it is important to see the Chinese climate arena. In this context the word “arena” refers to the relationships between actors, i.e. such groups and institutions in society whose attitudes and actions jointly define China’s climate impact. The following sections comment on a number of actors and structures of particular importance on the Chinese climate arena. This overall description begins with the sphere of public administration and is then extended in subsequent paragraphs to other groups of actors. It should be emphasised that when discussing authorities, this report focuses on the national, Beijing-centred climate arena, while in a country as big as China – with its multitude of administrative tiers – there are of course sub-arenas at many levels. A more detailed discussion of the importance of this tiered structure for climate engagement is found under the heading “Internal actors and incentive structures” in section 8.2.2 of the report. 5.1 Institutional structure for processing climate issues The two most important authorities from the point of view of climate issues are the Ministry of Foreign Affairs (MFA), which leads the Chinese negotiating delegations to the conferences of the parties to the Climate Convention, and the National Development and Reform Commission (NDRC). For climate decisions and consensus-building at the central government level, there is the National Coordination Committee on Climate Change (NC4)12, which is located at and chaired by the NDRC. The committee members are vice-ministers or deputy director-generals of ministries and state commissions or administrations. Table 5 shows the composition of the committee. When the predecessor to the current committee was established in 1990, responsibility rested mainly with the China Meteorological Administration, which builds, supervises and collects scientific competence in the field, and which is China’s focal point for the UN Intergovernmental Panel on Climate Change (IPCC). As the climate issue has entered the realm of politics however, strategic responsibility has shifted, and since the 1998 reforms of China’s national institutions, the NDRC has had the coordinating role (Zhang 2004b, Zhao 2001.) The NDRC will also function as China’s Designated National Authority (DNA) for the Kyoto Protocol’s Clean Development Mechanism (Zhang 2004b). 10 The National Development and Reform Commission and the Ministry of Science and Technology are particularly important. For example, China’s national Agenda 21 office is run by the latter. Information about sustainability and Agenda 21 is posted on the Internet at www.sdinfo.net.cn/english/ and www.acca21.org.cn/english. 11 Approve in this context is equivalent to ratify. See the first paragraph of Article 25 of the Kyoto Protocol. 12 www.ccchina.gov.cn/english/ 11 Chair National Development and Reform Commission, NDRC Deputy chairs National Development and Reform Commission, NDRC Ministry of Foreign Affairs, MFA Ministry of Science and Technology, MOST × × × × × China Meteorological Administration, CMA ×13 State Environmental Protection Administration, SEPA Ministry of Finance, MOF Ministry of Commerce, MOFCOM Ministry of Agriculture, MOA Ministry of Construction, MOC Members Ministry of Communications, MOC Ministry of Water Resources, MWR Administration under the State Council Source: www.ccchina.gov.cn/english/introduce.htm [2003-12-28] Ministry or state commission Table 5. Composition of the National Climate Change Coordinating Committee × × × × × × State Forestry Administration, SFA × Chinese Academy of Sciences, CAS × State Oceanic Administration, SOA (Ministry of Land and Resources) Civil Aviation Administration of China, CAAC × 5.2 Competence centres for climate policy and climate science Research and knowledge gathering in the field of climate science take place at many locations in China, and not just in Beijing where the China Meteorological Administration is the key actor. Several large universities in other parts of the country carry out this type of work. With regard to climate policy issues, however, the situation is different, largely due to their strategically important and foreign-policy related nature. There are therefore no plans to 13 SEPA is a national administration directly subordinate to the government (unlike administrations that are subordinate to ministries and state commissions), but since the 1998 reforms of government institutions, its leader has the rank of minister. 12 establish co-ordinating committees like the NC4 at provincial levels. Those climate-policy oriented competence centres that do exist are largely concentrated to Beijing, and the number of people working on these issues is limited. The important academic institutions in the field are Tsinghua University and to some extent Beijing University. The leading bodies of the NC4 also have research units or advisory departments that specialise in climate policy issues. The ERI, of course, which is affiliated to the NDRC, plays a very important role, but SEPA and MOST also have units that are active in the field. There is also an important node at CASS, the Chinese Academy of Social Sciences. But the number of people engaged in the core issues of climate policy is small. 5.3 Trade and industry and the climate issue The importance of trade and industry for China’s climate performance can hardly be overestimated. Within these sectors it is industry, representing the largest share in the country’s coal-dominated energy supply, that has the most impact. This applies particularly to the highly coal-intensive industries in power, cement and iron and steel production. In spite of its status as a developing country, China is highly industrialised. At the same time, however, only thirty per cent of the population is counted as urban (Zhou and Ma 2003). Reflecting these circumstances, China’s industrial structure is different from most other countries, both in that it to such a large extent consists of small-scale rural industries, and in the fact that these exist not only in light manufacture but also in heavy industrial sectors such as mining and in the other sectors mentioned above (Maddison 1998, Pei 1998). Important in Chinese trade and industry is the heritage of decades of planned economy. It affects how businesses are run and manifests itself through widespread state and collective ownership. It affects practical operations and strategies, since political aspects, particularly local ones, often carry great weight (Zhao 2001, Pei 1998). Furthermore, it is visible in the fact that the organisational structure of trade and industry mirrors that of public administration, with management that is highly fragmented and spread over many small units. Large industrial groups by contrast are less common, even although they are regarded as increasingly important and encouraged from higher political levels (Smyth 2000). On the whole, the existing structure presents difficulties to industrial organisations that wish to operate vertically, creating instead strong horizontal ties of dependency and loyalty between individual businesses and local authorities. Thus, the Chinese Enterprise Confederation, a central industrial interest group that among other things addresses issues such as energy and the environment (mainly in the form of environmental management systems), works in completely different conditions than does for example the Swedish Confederation of Industry. And since climate policy in China so far has extremely limited distribution outside the central political level, it is easy to see that climate performance is a non-issue for most actors in Chinese trade and industry. For foreign actors, the Chinese market is still an arena hard to penetrate. This also has to do with the legacy of a planned economy which encourages local protectionism at the same time as market reforms have given local actors more economic power at the expense of central control (Zhao 2001, Economy 1998). China is indeed open to foreign investment, but creating good relationships with local authorities and an atmosphere of mutual trust can require great effort on the part of foreign companies that through ownership wish to establish a foothold in the country. Foreign owners are still an unknown element in business tradition in most places in China, and can often be regarded by local officials as a threat to their influence over developments in the area, region or province. A foreign investor therefore often encounters many demands and limitations that are not applied to domestic businesses. Since China formally supports the Clean Development Mechanism (CDM), there is at least theoretical support for the promotion of industrial initiatives for improved climate 13 performance, for example through greater energy efficiency. Unlike several other countries however, unilateral CDM projects are not accepted in China at present (Zhang 2004b, AM-CDM 2003). Involvement by foreign actors is therefore necessary already at the initiation stages of the project, but the host business must still be wholly or mainly Chinese owned. Obstacles to the establishment of privately or enterprise initiated CDM projects in China can be expected. The fact that knowledge and awareness of the climate policy of the central authorities is poor reduces the trust of local businesses and authorities in the CDM concept (Wang and Yan 2003). In coal-intensive electricity production, for example, Chinese actors are experiencing and expecting, in the next few years, a strong increase in demand. This currently leads to massive investments in new production capacity, including small-scale coal power. In spite of the potential for greenhouse gas prevention measures, the CDM is not regarded as an attractive prospect by the sector. Capital for new installations is often not a problem, particularly in the light of the expected increase of demand, and the involvement of central bureaucracy that a CDM project would involve makes it less attractive. Apart from CDM bureaucracy, there remains, from the point of view of foreign actors, the already complex and difficult procedures associated with regular market establishment in China. The process for launching a CDM project, and having it properly approved, will not in the foreseeable future be coordinated with the permit and establishment routines that otherwise apply, or in any other way change them. From what has been said above, it is apparent that the promotion of climate measures in Chinese industry is not without problems. This includes not least CDM activities oriented towards energy efficiency measures. Despite this, foreign companies are still expressing their interest in the mechanism. Chinese actors working with renewable energy technology also express hopes about the CDM. (A more detailed discussion of the prerequisites for CDM in China is presented in section 8.1.2 of this report.) Improving active climate involvement on the part of Chinese industry will require many measures on a broad front, among other things in capacity building. In this respect, activities are underway or being prepared, supported and initiated by central climate-policy circles in Beijing (World Bank et al 2004, ADB 2002). The close ties between industry and local political administrations need to be loosened, however, in order to reduce protectionism, to deal with fragmented corporate structures, etc.; circumstances that combine to make the implementation of central initiatives and policies more difficult. 5.4 Civil society The most important actor in a society is, in the end, the individual: all those who together make up the collective citizenry. This collective should not be disregarded in an overview of the climate arena, even if it is not meaningful to try and treat it as a single unit. There are, however, institutions that can be used as tools for bringing about a heightened focus on climate issues within the citizenry, thereby allowing it to influence, and be influenced by, official policies. Some important channels of this type will be commented on in this section. Generally speaking, it is clear that public awareness of climate science and climate policy is very poor in China. This means that seen from a climate perspective, the population – including trade and industry – is not a particularly constructive actor. If people are to become more willing to get actively involved, downward communication towards the individual is necessary, and if the collective is to exercise influence upwards, it is also necessary that there are two-way channels that permit dialogue. The latter type of phenomenon, however, can be a sensitive thing in China, since, in Chinese government tradition, unsanctioned political activism has a tendency to be seen as a threat to society. 14 5.4.1 The media and educational institutions In China, the role of the media differs somewhat from than in Sweden. Social order, security and stability are the most prominent concerns of China’s political leadership. The media and their news coverage have the important task of showing the population how this concern leads to steady improvements for the individual, both in the fight against threats – in the shape of crime and social incongruities, environmental problems, natural disasters, and so on – and in promoting the conditions for an ever better future. Another, equally important task for the media is to examine and report on unsatisfactory situations – not primarily to the public, but to those in control (Cheung 2001). Therefore, the media in China are a poor forum for discussion and dialogue, even about completely uncontroversial subjects (Samuelsson 2000). Since climate policy has a clear foreign policy aspect, the media can in principle adopt no other positions than the official ones (Cheung 2001). Media’s capacity to penetrate, however, naturally makes them an excellent organ for education and propaganda. The spreading of increased awareness in the population about sustainability and the environment – including climate – is a strategy, the importance of which is recognised by the leadership. Such education is seen as a significant means for countering environmental threats to continued social progression (Economy 2003). Media attention is therefore increasingly being devoted also to the climate issue: primarily to its scientific aspects of course, but domestic climate aspects favourable to the leadership’s agenda can also be highlighted (as for example, reports and comments on China’s falling energy intensity in the 1980s and 1990s). A sign of the deliberate use of such a media-driven public education effort on climate is the national broadcasting company CCTV’s plans to increase its existing range of television channels with an additional one, whose programming schedule would be dedicated to climate-related programmes and items (Chen 2004). In addition to the media, schools and academic institutions are naturally very important as institutions for the dissemination of knowledge (Liu 1991), but, as mentioned above, the climate policy dimension is limited to a few institutions in Beijing. Efforts to extend educational measures about the scientific aspects of climate change ought not to be politically controversial. However, a great deal of inertia in curricula, course schedules and the teaching profession would have to be overcome. In summary, journalists, teachers and similar professional categories need to be included as key actor groups in an overview of the Chinese climate arena. 5.4.2 Non-governmental organisations China has no freedom of association. Non-profit associations and other non-governmental organisations (NGOs) have to register with the Ministry of Civil Affairs (MCA) or its local counterparts. Exceptions to this rule are made for associations, which belong to a selection of defined categories, or which are classed as departments of already existing institutions, organisations or companies. In consequence, many associations work under an umbrella such as a university. Organisations initiated by the authorities do not need to be registered, which has given rise to the acronym GONGO (government-organised non-governmental organisation). These organisations may function as think tanks with considerable influence. For ordinary associations, however, the registration requirement and the subsequent influence of authorities over their activities can significantly affect their manoeuvring space. Still, in 2001, over 200 000 associations were registered with the MCA, and the number rises steadily. There are also estimates that indicate that the number of unregistered associations in China might be as high as one and a half to two million (ESTH 2003a). In many cases, NGOs can work without much interference from, or even in co-operation with, the authorities. This applies in particular to those that are dedicated to non-controversial topics such as environmental (science) or health education, care of the disabled, etc. Among 15 environmental organisations in China, the more well-known ones include Friends of Nature, Global Village Beijing and Green Earth Volunteers, but there are many, many more. In politically sensitive areas, on the other hand, NGOs in the international meaning of the term have extremely limited opportunities for action (Economy 2003, ESTH 2003a, Betts 2002, Hallding 2002). Climate policy, with its foreign policy aspect, is one of the fields in which Chinese environmental organisations do not normally engage themselves. GONGOs, on the other hand, may be particularly active in such contexts. From a climate perspective, the ERI and CASS are obvious examples, although – from an international point of view –they would not, of course, have been categorised as non-governmental at all. Foreign or international NGOs do not yet have any clear way of operating legally in China, as they are not covered by the legislation that regulates domestic associations. Special legislation is said to be under preparation, but meanwhile the legal position for many organisations remains uncertain (ESTH 2003a). Nonetheless, climate policy activities in China are primarily driven by foreign actors without direct government sanction (although with government approval) under the auspices of the Worldwide Fund for Nature (WWF China) and the US-based Energy Foundation. 5.5 Bilateral and multilateral co-operation Connecting to the previous paragraph, many other foreign and international interests relevant to the climate policy arena are represented in China. The most important multilateral actors include the Asian Development Bank (ADB), the World Bank and GEF (Global Environment Facility), and the UNDP (United Nations Development Programme). The EU is also involved with a large new energy project in the start-up phase in 2003–2004, and since 1992, on the initiative of Canada, the multilateral China Council for International Cooperation on Environment and Development (CCICED) is also active in the field. The CCICED brings together domestic and foreign experts on a common platform and enjoys the privilege of direct communication with central leadership through its annual reporting sessions. Canada also plays a large bilateral role through its financing of the project known as the “C5-project”, the Canada-China Cooperation in Climate Change Project, which is greatly appreciated in China for its successes in the four areas of awareness and outreach, national communications, impacts and adaptation, and the CDM. However, the work of this project, which was initiated in 2001, will be completed in 2004. The United Kingdom and the USA have also funded co-operation with Chinese authorities and research institutes in the form of projects, as have Germany and Norway (and to some extent Italy). British efforts have been devoted not least to climate sciences.14 In the field of flexible mechanisms, Norway and Japan were active parties already during the AIJ phase (Activities Implemented Jointly), and under the CDM the Netherlands has been involved in breaking new ground by initiating China’s first CDM project (Zhang 2004a). Countries such as Germany, Austria and Denmark are following suit here, as is the World Bank (through the PCF, Prototype Carbon Fund). A number of foreign consultancy firms based in the UK, Germany and the USA have opened offices in China to benefit from these energy and climate-related projects. Co-operation in the energy and climate fields between Chinese and American research institutes is widespread and on-going for decades already. A good deal of capacity building has taken place at influential institutions, such as the ERI and Tsinghua University, through such collaboration (Gallagher 2001). In 2002, during US President George W. Bush’s February visit to Beijing, the two countries established a semi-official, permanent working group for following up, discussing and promoting this co-operation at the highest political level (Buchner and Carraro 2003, ESTH 2003c). A number of meetings have already been 14 An example of this is Hulme’s and Sheard’s (1999) information brochure for the WWF. 16 held; the fifth took place in Xi’an in March 2004 (ESTH 2004). No similar fora appear to have been established with other countries, however. Nor does any official bilateral cooperation or consultation seem to take place between China and other developing countries. The exchange that does take place is said to occur only within the framework of the previously mentioned multilateral organisations (the ADB, the World Bank and the UNDP) and during the conferences of the parties to the Climate Convention. One example of such multilateral climate collaboration between developing countries where China participated was a three-day meeting of ten Asian countries in Malaysia in April 2003, held under the leadership of the UNDP and sponsored by Canada. The theme of the meeting was efficient CDM operations (AM-CDM 2003). More permanent platforms under multilateral leadership also exist: Development and Climate is one although not on the same high political level. Here, China is represented by the ERI, and several other institutions from both developing and developed countries are members (Jiang et al. 2003). According to interviews with Chinese climate policy experts, for example at the NDRC, a common position is that the climate issue does not need to be addressed or integrated within other such international co-operative frameworks (outside of the Climate Convention) of which China is a member, e.g. APEC (Asia-Pacific Economic Cooperation) or the WTO (World Trade Organisation). Nor is climate regarded as a potentially important component of China’s relationship as a third party to regional multilateral political fora such as ASEAN (Association of South-East Asian Nations).15 It is not possible to judge, on the basis of these interviews, whether these opinions are due to a fixed national political standpoint, or whether they reflect, rather, a lack of personal experience of this line of thought. The general position seems, however, to be that every issue should be addressed in its own proper context. On the other hand, initiatives to new international platforms that are particularly devoted to the climate issue are welcomed. An example of this is the US initiative in 2003 to launch the Carbon Sequestration Leadership Forum, in which China participates. 6 The Position of Environmental Policy The father of Chinese environmental policy is Qu Geping. When the international environmental movement made its first steps of political progress as a result of increasingly obvious environmental problems in the 1960s, China’s official position remained for a long time that this type of problem was a characteristic of capitalist development only. Therefore, by definition, it could not exist in China. In the early 1970s, however, the issue of environmental degradation did attract some attention within the Chinese leadership. Qu Geping, with a background in the Ministry for Chemical Industry and the State Planning Commission, was given the task of devoting himself to the field. The starting point for Qu’s career as an environmental policy leader in China came in 1972 when he headed the Chinese delegation to the UN Conference on the Human Environment in Stockholm. Twenty years later, at the 1992 Earth Summit in Rio de Janeiro (the UN Conference on Environment and Development), he received international praise for his environmental efforts in China. The first Chinese environmental authorities, led by Qu, were set up in the 1970s and 1980s, including the organ that is now the State Environmental Protection Administration. In the 1990s he was a member of the National People’s Congress Standing Committee and the 15 With the EU, however, the situation is different. In a way, relations between China and the EU are more bilateral than multilateral in nature. Also, since climate change is high on the political agenda of the EU, the issue has become already an established part of Sino-European contacts. Chinese authorities engage in climate dialogues with the European Commission’s delegation in Beijing, and concrete collaboration takes place within the Synergy programme run by the EU’s Directorate-General for Energy and Transport. The programme is oriented towards international energy-policy co-operation, focusing on supply-security issues on the one hand, and on the Kyoto Protocol on the other. 17 chairman of its Environmental Protection and Resources Conservation Committee. Qu Geping’s efforts underlie much of what has been achieved on the environmental front in China, institutionally and in the media, as well as in the legislative field (Cheng 2002, Gharemani et al. 1999). Gradually, awareness and knowledge about environmental problems have gained ground in China, but it has been a difficult and drawn-out process, and there is still a large gap between the rhetoric at the central level and the practical situation in many parts of the country. In spite of great achievements, for example in the field of environmental legislation in the 1990s, there remain difficult obstacles to the penetration of official environmental policy, not least institutional ones. Zhifa nan, “it is difficult to uphold the law”, is a widespread phrase in Chinese legal contexts (van Rooij 2002a). There is much to be said in this area: about the limited room for manoeuvre of the Chinese environmental authorities, about the importance in China of political campaigns, about the balance of power between central and local government, about opacity in dealing with information, and so on (Brettell 2001, Rozelle et al. 1997). The fact that great changes have nonetheless taken place in the political climate is apparent. An example can be seen in the preface to the Chinese editions of a book published by Qu Geping, “There is Only One Earth”, on the same theme as the Stockholm conference in 1972. From having been forced during the 1970s to introduce the volume with a critical commentary on the content, the political situation in the Open Door reform era permitted a more appreciative tone and an admission of the relevance of environmental problems to China. When the third revised edition was published in the late 1990s, the need for greater environmental awareness in the entire Chinese population could appear as an important message in the preface (Gharemani et al. 1999). 18 PART II: Discussion 7. Incentives in Climate Contexts The background sections to this report make a distinction between climate science and climate policy institutions in China. This distinction is important, not just on an institutional level, but also with a view to terminology. From having been largely a scientific matter, the climate issue has become politicised in important aspects. This is mirrored in the fact that primary responsibility for central climate co-ordination in China shifted in the 1990s from the meteorological administration to the national development and foreign-policy authorities. This politicisation, which involves both foreign and domestic policy, is an inevitable result of the Climate Convention and the development of international climate co-operation, and it has repercussions for China’s room for manoeuvre in climate contexts. The point of stressing this here is a conviction that insight into these terminological differences permits a more in-depth analysis of the issue at the centre of this report: What incentives, and what willingness and prospects, exist for more extensive participation by modern China in future international climate co-operation? 7.1 Perspectives and key concepts There are three distinct perspectives from which China today regards issues with climate relevance. The perspective most usually encountered first by outsiders, and which dominates international climate co-operation, is the foreign policy perspective. Alongside this perspective, but with completely different conditions, is that dominated by domestic policy considerations. What both viewpoints have in common is the sensitivity that characterises all politics in China, and the sluggishness inherent in political decision-making. The most important difference between them is that the motives for taking up positions are fundamentally different. The third perspective is the empirical scientific one, which is much less charged than the social and political aspects. The characteristics of the three perspectives are described in more detail in the following paragraphs, but to underline their inherent differences, three key concerns concerning the actions and interactions of nations will be briefly examined. These are obligations, rights and limitations. These terms all touch in key ways on China’s goals and ambitions for the future, and they permeate the discussion about the climate issue that is taking place in the country. Through this, it also colours the position that China shows to the world. • Obligations include a moral responsibility within the international community and the duty to stand by promises. • Rights are about national self-determination and equity between countries. • Limitations affect the ability of countries to enjoy their rights and fulfil their obligations, and consist of the natural conditions of a country, for example its natural resources. 7.1.1 The foreign policy perspective Chinese foreign policy is primarily about safeguarding the reputation and integrity of China in the international community as well as the image of the country’s unity. It is important for China in diplomatic contexts to stress the high moral standard that China claims to represent (Pye 1992). While it reacts badly to all types of criticism of Chinese interests, China does not, however, shy away from rhetorical blame of others. The background to this type of action is much older than the political system of the People’s Republic. In an analysis of the 19 characteristics of Chinese politics, Lucian Pye (1992) points out how they exist in the traditions that characterised the Chinese imperial dynasties. He also describes the apparently contradictory combination of a sense of superiority and inferiority that marks China’s attitude to other countries and cultures. This position is expressed among other ways in repeated comparison of China’s situation with that of others, and in an intensive attempt to make use of, or internalise, capacity and cutting-edge knowledge from other places, on China’s own terms (Niu 2001). The climate issue, in the wake of the Climate Convention and the so-called “climate process”, has come to be a political matter with its emphasis in the field of international relations, and in China’s case this has consequences for its ambitions to co-operate globally in practical ways. A clear sign of the weight of the foreign policy aspect of the climate issue in China is the influential position of the Ministry of Foreign Affairs in the National Coordination Committee on Climate Change.16 In Chinese foreign policy, the term obligation, as well as the term right, are prominent rhetorical arguments, and they also play a key role in climate contexts. In this context, the Climate Convention, where a clear distinction is made between developed nations and developing nations, is seen as a catalogue of relevant obligations and privileges, and China is aggressively protective of its status as a developing country. Such a country has less precise obligations than the developed countries of Annex I; and with references to the convention text, demands are presented both regarding the climate performance of these countries and their responsibility for building capacity in China. It is thus the obligations of the rest of the world, but the rights of China, that are in focus in the foreign-policy perspective on climate (Zeng and Yan 2003, Economy 1998). In the question of the climate process, no change should be expected in China’s foreign policy actions. To promote Chinese participation it is more important to work with strategies that are not unnecessarily limited by this politically conflict-prone dimension. 7.1.2 The domestic policy perspective Domestic policy in China is characterised by a different paradigm than foreign policy. It of course has its roots in the same basic condition, namely to preserve the idea of China’s unity, but it is controlled by other forces. One such overriding ambition of domestic policy is stability, which is seen as a prerequisite for the legitimacy of state power. Strategies for preserving stability vary and can span a wide spectrum from welfare policy to repression.17 Pye (1992) describes China as a civilisation disguised as a state. Chinese society, which is built up around collectives of individuals and personal networks, has, in his view, existed traditionally only at local levels that have really never had a close connection to the state and the central bureaucracy. However, the relationship between the centre and the periphery is marked by fundamental mutual respect for the maintenance of the apparent omnipotence of the leadership, expressed in an institutionalised culture of pretended compliance. This is characterised by emphatic support for decrees from the top followed by a discreet neglect of unwanted policies, while less problematic orders are implemented with an excess of enthusiasm. It is when the balance of this respect is disturbed that the state can take drastic and violent action. There are of course alternative models of understanding, and there are 16 When responsibility for the committee was moved from the China Meteorological Administration during the institutional reforms of the late 1990s, it was intended to go to the Ministry of Foreign Affairs. Instead, it ended with the present National Development and Reform Commission taking the helm. 17 So in China we see massive infrastructural and distributive social policy measures intended to produce a general increase in material standard, and patriotic symbolic projects, of which the 2008 Beijing Olympiad has a unique position. And we can see aggressive propaganda campaigns and repression of elements that are alleged to be a danger to society, like those directed at the Falun Gong movement in recent years. Nor has the demonstration of military power in Tian’anmen Square in 1989 been forgotten. 20 variations that are a mixture of views (Edin 2003, Zhao 2001). Edin (2003) for example represents another perspective and chooses to regard lack of compliance rather as a sign of selective efficiency. She emphasises the internally conflicting interests of the central power, rather than the independent action of local administrations, as the reason for failure to implement policies. In the climate issue, the state government and central authorities are fairly well aware of the challenges facing China, and take a very serious view of the limitations to continued economic and social development that energy, environment and climate-related problems threaten to cause (Economy 1998). Local actors, on the other hand, are not at all as wellinformed. Central power is faced with a dilemma here. On the one hand, a campaign of education and persuasion is necessary to spread domestic policy incentives for climate measures. On the other hand, the climate issue is so strongly charged with foreign policy that it must be kept within the framework of the state’s sphere of interest. The result is fragmentation, where climate nominally remains a central and international issue, while practical measures must be packaged in forms that better suit a domestic arena in which the actual implementation of central policies is dependent on their appeal to the local levels of the state apparatus. This is the basis of the recommendations from the Energy Research Institute about the importance of combining climate-relevant proposals with local targets (Jiang 2002), targets that are included in the foreign policy rhetoric of rights as Chinese primary interests: growth, technological advancement, and development. The challenge for the policy advisors in China is to introduce climate measures in disguise, without making too much of the climate aspect as such (cf. Wang and Smith 1999). Awareness of this situation is invaluable in foreign attempts to promote Chinese climate efforts. 7.1.3 The scientific perspective Science and technology are cornerstones of the positivistic and materialistic world view that permeates Chinese society and its national ideological foundation. A respected, almost revered ideal of science feeds ideas of an absolute, objective answer to all questions, but this fits poorly into policy and government (Pye 1992). In the authoritative Chinese tradition that is protective of the idea of the wise state leadership, there is no scope for public relativism, which explains why politics and policy issues can be very sensitive areas, and why support from central political organs is necessary before issuing a standard-setting official line. With respect to positions and information about scientific findings, the situation is different since their apparent objectivity is so strongly established. Since the political aspects of climate are so important, it is understandable that the circle of Chinese researchers and policy advisers in the field is small and concentrated to Beijing. It is also natural that the situation with respect to climate science efforts is wholly different, with research spread around the whole country. Exchange between these two spheres is somewhat limited however, since very few people have insight into both. Scientific issues that engage the climate policy circle are particularly related to the effects of climate change that threaten to limit welfare development and social progress, and that therefore risk disturbing political stability in the long term. Public awareness of these limitations is today limited, but efforts both to improve academic knowledge and to spread general awareness of the scientific contexts of climate change are considered highly important, not least in their creating better conditions for policy compliance. There should thus be good scope for international cooperation in issues of development and dissemination of scientific findings in China. 7.2 China’s priorities The arguments in the sections above show that the circumstances surrounding China’s participation in international climate work are interrelated through complex links between 21 different perspectives. While foreign policy rhetoric, with its focus on national rights and obligations, can be a troublesome factor when working to construct future collaboration, there are other entry points that can be used to increase the incentives for broader Chinese participation. Generally speaking, collaboration benefits from being based either on scientific aspects, or by taking domestic priorities into account. This report will now present a short review of six such important priorities that of course are also related to the foreign policy agenda – no least through the three key aspects previously mentioned. Figure 6 illustrates these links. Prioritised issues Development Economic growth Technological advance Strategic development security Energy security Sustainability Key concerns China’s rights International community’s obligations Natural limitations Figure 6. Relationship between six Chinese priorities and three political key concerns 7.2.1 Development Development is one of the most central priorities in Chinese politics. The term is to be understood as a positivistic, materialistic technology-oriented modernisation of society. It is driven by domestic policy in that expectations of a successive improvement in the standard of living contribute to social stability and secure the position of the leadership. Chinese society has undergone an enormous process of change in the 25 years since the introduction of the Open Door policy, but the big changes have not benefited everyone. China is still largely an agrarian society, and modernisation has dramatically increased the gap between the standard of living of the urban and rural populations. During the introductory phase of the market reforms, there was much promising talk of the dynamics of development. Wealth for some in the short term would be followed by wealth for many in the medium term, and in the long term, wealth for all would be achieved (Shen 1999). This ambition, then, is an increasingly important point on the domestic agenda for the Chinese leadership. Development is a right for each part of China, but the prerequisites of course vary, and at central level great weight is attached to designing policy instruments that will stimulate not only the already favoured, but also the poorer parts of the country. Climate measures in this context are an issue of such low priority that they do not exist. They are only justified to the extent that they can aid development ambitions. 7.2.2 Economic growth The single most important indicator of development is economic growth. This is not necessarily because it is the best indicator, but it is the most simple to understand and use. China, during its period of economic reform since the end of the 1970s, has demonstrated unequalled growth figures, and there are ambitious goals to continue this trend in the coming decades. These goals have high priority since growth is seen as a prerequisite for the social progression which is China’s entitlement, and which China does not intend to forego, for domestic political reasons. There are, however, ideas and wishes not only about the scale of growth, but about its content. Chinese policy has long been characterised by both national and local protectionism. Market actors and regulators have often been part of the same institutional structure or have been closely associated with each other (Zhao 2001), which in many cases has made it difficult for foreign actors wishing to establish themselves in the 22 country. There is tension between old, planned-economy goals and a new, more marketoriented view of growth. The fact that China has been a member to the WTO since 2002 will however probably influence future growth policy. The fast, uncontrolled economic growth that prevails in China today continues to establish an infrastructure that is in many cases based on activities with serious climate impact, something which is a great problem from a climate viewpoint. Policy instruments that influence investment are hard to implement however, since most investments take place on a small scale and in consultation with local authorities with no climate agenda (Economy 2003, 1998). 7.2.3 Sustainability Sustainability generally denotes a number of long-term criteria about the preservation of social, economic and environmental conditions for the existence of society and its continued production capacity. They are naturally interrelated. In China, sustainability in this sense is a priority that is accorded importance by the leadership, although awareness of this at local level is so far in doubt. The classic sustainability priority primarily associated with China is a social one, but its huge effect has attracted great attention around the world and its radical consequences for Chinese society are ongoing. The priority referred to is the (in-)famous single-child policy, which in principle stipulates that each set of parents is only permitted to have one child. This policy is based on the efforts of the old, plan-economy China to deal with threatening future problems of supply, above all those of access to food. The most obvious sustainability problem of today is environmental. The explosion of industrial growth that took place in the 1980s and 1990s in the wake of the market reforms was largely based on smallscale rural industry. It occurred in all industrial sectors up to the heaviest, in the form of cement manufacture or iron and steel production. In the mid-1990s it represented more than half of industrial production in the country (Shen 1999). Many thousands of businesses were started, ill-equipped and poorly managed, which have brought China to the edge of environmental collapse. Measures to remedy this pollution would of course to a great extent go hand in hand with climate-protecting measures, and so far the central authorities are struggling primarily to spread incentives for other environmental considerations among local actors – often, it appears, with limited success (Economy 2003). In this context, the climate issue occupies a wholly subordinate position. 7.2.4 Energy security A particularly important sustainability aspect for China is that of energy security. Fossil coal, the most important energy raw material of the country, is available in large quantities but is mined a long way from the growth centres where most of the demand is. Logistical supply difficulties with bottlenecks in the transport system, quality and efficiency shortcomings and technological limitations, together with the forecast increase in demand, constitute a serious threat to the security of supply. At the same time, the amounts of oil and natural gas in the Chinese energy mix are on the increase, which is also a source of concern, since China is becoming increasingly dependent on the import of these energy raw materials which are not sufficiently available within the country’s own borders. A massive successful campaign for energy efficiency in the 1980s and 1990s was behind the remarkable feat of falling energy intensity coupled with high growth that was seen during this period (Zhao 2001). The challenge remains and is growing, since this feat, according to the government’s plans, is to be repeated in the first two decades of the new century. Energy supply and climate performance are closely linked, and at this level there are significant opportunities for the promotion of synergy between energy policy and climate policy measures, despite the fact that climate has been entirely set aside as a priority. 23 7.2.5 Technological advancement Efforts to achieve technological advancement are an important priority for China, where technology and science are icons of modernity and a Utopian vision of future society. As with the question of energy security, this field could provide scope for climate-promoting synergy within the framework of international co-operation. An increase in such co-operation however also creates the risk of complications where China is concerned. This is because of the double-edged nature of technological advancement, in which foreign policy aspects and more domestically dominant issues compete with each other. This is shown in Figure 6 on page 22. From the perspective of rights and internal focus on technological advancement, importance is attached to the promotion of innovation and research and development. At this level, international co-operation can work without underlying conflict. From another perspective, where terms such as spread of technology and technology transfer are used, international relations and the obligations of the rest of the world towards China will instead become one of the main issues. Generally speaking, there are great expectations in China about the impact and benefits for China of technology spread between countries. The often used and grossly simplistic actor model – which does not have room for non-governmental actors or interests, or room for descriptions of technology that go beyond the material dimension – makes it difficult to understand and communicate with representatives of a western perspective in which ownership of technology is normally viewed as separate from the nation and the state. In the Chinese world view national origin and acquisition of technology as well as national ownership are understood to be in principle identical terms. This is the source of a feeling in China that the western world is hypocritical and is not playing fair when issues such as technology diffusion and promotion of the international investment climate are raised in the same breath. Linking the climate issue to technological advancement is seen in China entirely in the light of the Climate Convention’s references to co-operation and diffusion of technology between the developed and developing countries, and at this level, in the Chinese view, the rest of the world has grossly failed in its obligations. 7.2.6 Strategic development security Changes in course can require new thinking, risk-taking and the acceptance of adversity from which one hopes to draw conclusions and learn new things. Doing things to learn from them learning by doing – is a common development strategy. In China however, development as a phenomenon, apart from its domestic policy dimension, is also of importance in foreign policy as a measuring stick in competition between countries. Development for its own sake is therefore important so that China will not lose ground with respect to the leading nations in the international community. In this context, the Chinese attitude is characterised by a completely different tendency – that of risk aversion – and a philosophy of the obligation of the rest of the world to contribute to China’s modernisation. It is about a priority that this report has called “strategic development security”, and which is clearly linked to the climate issue due to its foreign policy aspect. A stronger greenhouse effect in the future will of course affect China. But it will also affect other countries, which means that there is no incentive for China to be a front-runner in the international fight to combat climate change. Responsibility lies instead with the developed countries: in a perspective in which Chinese development interests are the priority, the developed countries must first take the economic risks of a technological paradigm shift to a society with limited greenhouse gas emissions. China can, if the road seems navigable, follow on behind. In a field that is somewhat reminiscent of the climate problem – the issue of emissions of substances that damage the stratospheric ozone layer – this situation was not a sore point in China’s international relations. In the wake of the Montreal Protocol and other agreements, the western world took a clear lead in the fast phasing-out of manufacture and use of freons. 24 8 Opportunities and Limitations Beyond 2012 Since 1997, the international climate process has been dominated by the Kyoto Protocol, negotiated during the third conference of the parties to the Climate Convention. This protocol is still newsworthy and controversial, not least because it has come to be the object of a very shrill foreign policy rhetoric. The leading roles are occupied by the United States, which has refused to ratify the agreement, the big developing nations such as China, India, and Brazil, and Russia, in whose hands a decision about the entry into force of the protocol rests. The EU’s position has so far been that the obligations undertaken by the member states under the protocol for the so-called commitment period of 2008–2012 are to be fulfilled regardless of whether the protocol legally enters into force. The focus of international climate co-operation in the next few years is the future of the entire climate process in the wake of the Kyoto Protocol, beyond the commitment period. The following, concluding sections of this report discuss some of the important opportunities and limitations of future Chinese climate work. 8.1 The Kyoto heritage Regardless of whether the Kyoto Protocol actually comes into force and whether the 2008– 2012 commitment period is followed by further similar consecutive periods or not, the protocol has left deep footprints that will have a decisive influence on future climate agreements and forms of co-operation. Two questions from the multitude of subject areas of the Kyoto Protocol that are particularly important to Chinese climate policy circles are the emission commitments and the Clean Development Mechanism. 8.1.1 National emission commitments Under the Kyoto Protocol, a number of developed countries have committed themselves to limiting their emissions of greenhouse gases during the commitment period to levels given in “Annex B”. The developing countries and other countries not listed in Annex B, among these China, are not subject to any quantified goals, but are still covered by the general obligations to promote sustainable development and counteract anthropogenic climate change, given the common but differentiated responsibilities of the parties for the growing greenhouse effect.18 The Protocol comes into force when it is ratified by at least 55 countries, of which so many Annex B countries that their joint greenhouse gas emissions in the reference year of 1990 were at least 55 per cent of the total Annex B emissions in that year. China, like Sweden and other EU countries, has formally ratified the agreement, which however has not yet (June 2004) become legally binding – in practice awaiting a final decision by Russia. China takes all international promises very seriously, its own as well as those of others. It therefore regards with some measure of understanding the decision of the United States not to ratify the Kyoto Protocol with regard to effects on the US economy, despite the fact that the country, under the Clinton administration in 1997, was involved in negotiating and signing the agreement. China is following the EU’s efforts to meet its commitment with some scepticism but with interest and curiosity. Particular attention is paid to the ambitious targets of Germany and the internal target of the United Kingdom which greatly exceeds that of the Kyoto Protocol. At the same time, China firmly rejects American rhetoric about the injustice of the fact that leading developing countries are exempt from quantitative commitments for limitations of emissions, while developed nations such as the United States are not. China does not hide its irritation over what China sees as the symptomatic hypocrisy of this position. It proves, in China’s view, that the developed countries think it is more important to maintain 18 As expressed in the Climate Convention. 25 their internationally leading position at the expense of the developing countries, rather than, as they claim, to protect the global climate system. The counterargument to the American rhetoric is the natural objection that the per capita emissions of the developed countries far exceed those of the developing countries, that the Annex B countries have been able to build up their wealth without the obstacle of limitations of emissions, and so on (Tangen et al. 2001). This has become a highly charged issue in Chinese foreign policy, and the term commitment has thereby become almost inviolably linked to connotations of sacrifice and self-denial. Against this background, one should regard the official, formulaic attitude to Chinese emission commitments thus: that these will not be on the agenda until 1) the developed nations of today have shown that they accept, and are acting in accordance with, their historical and ongoing responsibility for the growing greenhouse effect, and 2) that China has achieved an economic standard that, per capita, is equivalent to that of an average developed country (Zeng and Yan 2003). The deadlock created by the international battle for prestige over national emissions commitments means that if the United States or other developed countries persist in this sort of rhetoric, with extended demands as to the commitments of developing nations, it will pose a serious obstacle to progress in international climate co-operation. In order to proceed with the active participation of China it is of the greatest importance to create an atmosphere of trust and an approach in the dialogue that permits climate measures to be included in the priorities that developing countries in general, and China in particular, must work from. This is necessary for Chinese representatives in the climate process, both so that results will gain central support, and also if Chinese climate policies are to have any chance of percolating down to actors of climate relevance under the central level. Instead of commitments and privation, a much more fruitful strategy where China is concerned would be to deal with issues of ambition, more specifically ambitions about measures that will of course enhance climate performance but that are based on, or contribute to, direct or indirect progress in terms of development, energy security, sustainability, technological progress and growth. As long as the usefulness of such progress is a priority, and as long as this is felt to outweigh any sacrifice, there should be scope for rewarding climate dialogue (Economy 1998). At the same time, an important issue of trust is for the developed countries to take the lead. This is both a question of ethics and moral credibility and a sign that they take their responsibility seriously, but it is also a result of China’s internal need of strategic development security. 8.1.2 The Clean Development Mechanism The Clean Development Mechanism (CDM) is a project-based mechanism developed within the framework of the Kyoto Protocol with the objective of creating scope for climate cooperation between developed and developing countries. It is intended to increase the flexibility available to the developed Annex B countries in meeting their commitments to limit greenhouse gas emissions as well as to allow the spread of knowledge and application of climate-promoting measures to non-Annex B countries, and promote steps towards sustainable development in these. The principle is that special certificates can be issued when an approved project, carried out in a country outside the commitment, results in reduced greenhouse gas emissions. The reduction is to be quantified in reference to a baseline that describes what would have happened if the project had not been implemented. The certificates, which can be bought and sold, may then be used by developed countries with emission commitments to offset emissions that would otherwise exceed the permitted level. The official attitude to CDM in China was cool for a long time. This was due to fears among actors in the climate policy sphere that the mechanism would be used as a means for the Annex B countries to avoid their commitments, namely by shifting the sacrifices that they would otherwise be expected to make onto the developing countries (Tangen et al. 2001). 26 Since it has taken a long time for the international structures and institutions of CDM projects to take shape, it has been difficult to establish a common view in the National Coordination Committee on Climate Change. In accordance with the strong culture of consensus that characterises Chinese politics, this has led to a Chinese face to the world that has easily been understood to be dismissive, or at best cool. A number of factors have altered the situation however, including the international process within the Climate Convention, through which routines and processes associated with the CDM have successively crystallised and taken shape. The reshuffle of the highest political circles in China that followed in the wake of the institutional reforms at the time of the 2003 leadership change may also have had a role to play. The result is that the official China has now adopted a completely positive view of China’s role as a host of CDM projects. Institutional preparation and capacity building measures are well underway, among other things within the framework of a UNDP-funded project that had its official start at the Energy Research Institute in Beijing in November 2003. The feverish activity underway in policy circles in China on CDM may of course seem surprising to an outsider in the light of the almost negative position that was previously held by the country in foreign policy contexts. From a Chinese perspective, however, these events are entirely natural. What an outsider can see as a dramatic change of position is seen in China as a normal process within the framework of a serious – that is to say, careful – process of preparation. This is something that characterises all Chinese policy, not least in foreign policy. The late acceptance of CDM in China relative to many other important countries like India and Brazil has meant that the start-up period for CDM projects in China is rather short up to the Kyoto Protocol’s commitment period of 2008–2012. Some experience does exist however. During a test period of the concept of flexible mechanisms carried out within the framework of the Climate Convention in the 1990s, China hosted four AIJ projects (Activities Implemented Jointly), of which one with the support of Norway and three of Japan. China has also come quite far in the establishment of what looks like the first real CDM project in China. This is the installation of capacity for renewable electricity production in the form of wind power in Inner Mongolia. The Dutch government, through its CDM procurement programme CERUPT (Certified Emission Reduction Unit Procurement Tender), is the foreign partner and funder of this project (Zhang 2004b). The new official position on CDM in China is so far very vague on the question of what types of project can be accepted. Under the Kyoto Protocol, it is the host country that determines whether proposed projects meet the criteria of contributions to sustainable development. While the outward message so far is that all energy project proposals are welcome, that renewable energy (and CBM and CMM extraction) as well as energy efficiency are encouraged, there is a debate among central political actors in which different aspects are accorded varying importance.19 It is still too early to make any statements about what practice will develop. An important question in this type of discussion is how stringent requirements are to be with regard to technology introduction. Unilateral Chinese projects will in any case not be considered at present, and the technology requirement is one of the reasons for this. There were great expectations in international climate talks at the time of the negotiations to produce the mechanism about the volume of CDM projects in China. The great technological potential for energy efficiency was pointed to, as was the large proportion of the energy supply that consisted of fossil fuels, and the impressive economic growth and its attractions for international investors. There were jocular remarks that the abbreviation CDM could be interpreted as meaning China Development Mechanism. There were fears that China dominate the global CDM portfolio at the expense of more needy developing countries. The outwardly reserved position long adopted by China towards CDM has however meant that the 19 For projects whose object is to reduce greenhouse gas emissions by land use measures, however, there is a widespread wait-and-see attitude (Tangen et al. 2001). 27 country is now rather lagging behind, and even after acceptance of the mechanism, troubling obstacles remain to large-scale establishment of CDM projects in China. Scepticism like that which long characterised the official position still pervades large parts of the administration and business community, not least at local levels. Lack of knowledge of the climate issue and lack of awareness of, or unwillingness to adopt, central policies in the field, underlie this, and the problem is being tackled from several angles through efforts to build capacity locally. The situation of trade and industry has been commented on in a previous section of the report, and the situation for CDM projects in China begun on the initiative of foreign companies is not clear. Difficulties in this area are exacerbated both by marked local protectionism and by a tendency in Chinese authorities to prefer bilateral or multilateral contacts at government level, rather than dealing with independent business corporations (Tangen et al. 2001). Both of these characteristics can be understood in the light of China’s plan-economy past, but they do not bode well for hopes that the CDM will provide an incentive for trade and industry-initiated climate measures to achieve greater energy efficiency in existing industry for example. Expectations among China’s climate policy actors about the effects of CDM projects in the country are optimistic but realistically restrained. There are many difficulties and the resource base to deal with them is small. A good deal of activity has been initiated however to deal with the practical aspects and to broaden knowledge and capacity within the area. Bearing in mind the inertia of the Chinese political system, the amount of movement currently discernible is a sign that the country has come far within this part of international climate cooperation. To protect this progress it is important that the CDM continues to be a part of climate co-operation between developed and developing countries in future agreements. 8.2 Potential key issues beyond Kyoto There are of course a large number of relevant points in international climate co-operation that have not yet been studied in depth within the framework of today’s processes and agreements. From one perspective, the basis of which is promotion of future Chinese commitment, two areas in particular can be regarded as particularly important in future discussions. One of these is methods of technological co-operation between countries. The other applies to relationships between actors and incentives within countries. 8.2.1 Technology co-operation From China’s viewpoint, an area clearly neglected in international climate processes is the component of the diffusion of technology. The 1992 Climate Convention clearly states that the Annex I countries are obliged to support the diffusion to developing countries of technology that promotes the climate performance of these countries. ——— The developed country Parties […] shall take all practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how to other Parties, particularly developing country Parties, to enable them to implement the provisions of the Convention. ——— Article 4.5 of the Climate Convention There is however no accepted terminology for the diffusion and transfer of technology: expressions are open to interpretation. In China, with its tradition of state ownership and plan economy, a materialist, hands-on, state and control-oriented understanding of the terms prevails. Nation states are regarded as agents – senders and recipients – and technology as equipment, objects that changes owners. This view has fewer adherents in the western world, where rules of property ownership limit the room for manoeuvre of governments and protect 28 ownership of technology by both physical and legal entities. This, in turn, requires a more complex actor model than that described above. The state is expected to lead rather than control. Regarding technology, there is also a more abstract view that transcends the equipment as such and that also includes the way in which material objects are used. Perhaps as a result of the complex nature of the issue, technology diffusion has so far been accorded relatively minor attention in the ongoing work of the Climate Convention, with more energy has been devoted to other aspects, such as the Kyoto Protocol and the preparations for its entry into force. From a market-oriented western perspective, it is also possible to regard the flexible mechanisms, such as the CDM, as a tool for leading technology-owning market actors into technology-diffusing activities. However, such an attitude to technology transfer can in Chinese eyes constitute an almost flagrant violation of the spirit of the Climate Convention. The technology aspect is of course an essential and integrated aspect of the CDM, but this, in China’s view, cannot be used as an excuse for the developed countries to fail to fulfil their obligations towards the developing countries under the text of the Convention. Arguments for such a view can be understood and used rhetorically as proof of the western world’s lack of willingness and hypocritical attitude in the question of actual, concrete measures. It is clear that what is missing are platforms for dialogue about technology diffusion in which a common view can be established of the interpretation, promotion and implementation of international technology diffusion in the spirit of the Climate Convention. The common view sought will not be created during the conferences of the parties to the Convention, so the first step towards achieving technology co-operation for climate measures based on mutual trust should be that a discussion about such platforms takes place at a serious level during the work of drawing up future climate agreements. This is of great importance if a country like China is to be able to overcome its lack of trust caused by the developed countries’ apparent nonchalance in the area. Just how such platforms could be designed is not described in detail in this report. There have been speeches about “technology protocols” however of various types (Barrett 2003), and a few circumstances of relevance to the Chinese context can be mentioned. In China, there is great interest in acquiring, adopting and adapting technology within the energy sector. Similarities are seen between China’s situation and that facing the equally fossil-coal dependent United States. Clean coal technologies (CCT) has long been a major field of research in China, and they are participating with interest in the American initiative Carbon Sequestration Leadership Forum. Similarly, China sees opportunities of technology exchange, not least with the EU, in the use of renewable energy sources. It would be useful to have this type of subject included in the starting point for discussions about new institutions for collaboration on technology diffusion under the Climate Convention. Internationally or multinationally sponsored sector-specific fora for technology co-operation, in which companies rather than nations are active parties, could promote technology diffusion in a general sense. A concrete example of this type of sector collaboration that has arisen spontaneously in the increasing political pressure of the climate issue, not least within the EU, is the Cement Sustainability Initiative. This programme brings together a large proportion of global production capacity of cement under one flag (Nordqvist et al. 2002). In a short-term perspective, such institutions would not meet Chinese expectations of transfer from country to country, but on the condition that a serious dialogue between developed and developing countries was truly established, new initiatives could arise based on an understanding of the differing interests and circumstances of the parties in the question of technology diffusion. 8.2.2 Internal actors and incentive structures The fact that central Chinese authorities with overall responsibility for development and environment take sustainability seriously, and include climate aspects in this, is clear from the 29 background described in this report. Practical implementation of this awareness, however, deserves critical examination. The authorities maintain, not without some justification, that great progress has been made. The quote below is typical of the rhetoric about Chinese responsibility. This particular example is an extract from the address of the Chinese ambassador to the USA on 24 June 2003 at the start-up meeting of the Carbon Sequestration Leadership Forum (author’s italics). ——— The Chinese Government has exerted strenuous effort to address climate change. China is a low-income developing country with a large population. Poverty eradication and economic development should be its overriding priority. Nevertheless, the Chinese Government has always attached great importance to climate change issues. In particular, the Government has spared no efforts to improve energy efficiency, optimize energy structure, explore new energy resources and utilize renewable energy. Marked progress has been made so far. Over the past twenty years, China’s energy consumption per unit GDP has dropped by 63%, an equivalent of nearly 5% decrease per annum, thus making notable contributions to global warming mitigation. In addition, China is now implementing “the Tenth Five Year Plan for National Economic and Social Development” and China’s program for developing the western region, both of which place great emphasis on ecological building, environmental protection and sustainable development. These will enable China to make still greater contributions in this regard. ——— Source: www.ccchina.gov.cn/english/source/ba/ba2003062401.htm [2003-12-28] Such an argument, however, cannot be taken to mean that climate and sustainability considerations imbue Chinese development. This picture lacks the actor dimension that so strongly affects the incentives for climate measures. Authorities. Most decisions that affect China’s development, growth, energy performance and climate performance are initiated or controlled at central level. Central authorities do exercise some control through ordinances and other policy instruments, but their influence is in reality limited by the lack of co-ordination and transparency that is characteristic of the country’s exercise of authority (Zhao 2001, Economy 1998). China is of course in many ways a highly hierarchic society, but in practice, decision-making takes place in a highly fragmented, though consensus-oriented, bureaucratic structure of authority in which policy decisions and directives are to have horizontal support, but in which vertical coordination and feedback about compliance have great shortcomings. A contributing factor to this is that the country is broken down into a number of successive levels of administration, creating long chains of bureaucratic nodes between policy decisions and implementation. Demanding accountability for local deviations from central ordinances requires an undisturbed flow of communication between these nodes, and this is clearly not the case, since there are numerous breaches of central policy. In addition, there is widespread shortterm thinking in investment decisions (Zhao 2001), which has some of its root causes in a system in which short periods of office are combined with strongly performance-oriented promotion criteria for officials in the civil administration (Haugwitz 2002). Together, these circumstances present a serious obstacle to the implementation of long-term policies, in that incentives are altered when priorities are shuffled around between the administrative levels. For climate policy, as for other policy areas that require local implementation but which have national or global consequences, this is a serious problem. Awareness of climate policy, and the general background of the international process, is also very poor at local levels in China. Other actors. Alongside political leaders, authorities and legal systems, there are of course those who in the end are the most important climate actors: those who through their actions are to fulfil the policy decisions, namely members of society, in the shape of both physical and legal persons – citizens, and trade and industry. At this level, too, lack of 30 awareness of climate policy is a problem for its implementation. Chinese trade and industry is still marked by its having long been incorporated into state power and the sphere of state authority; the close links between local authorities and representatives of local trade and industry create fertile ground for loyalties that can jeopardise central policy decisions (Economy 2003, Zhao 2001). In many industrial sectors, including ones with climate significance like coal mining, cement manufacture or iron and steel production, production still goes on in many enterprises that according to central directives are not permitted to be running at all, for example because of poor technical standards, lack of safety or breaches of environmental regulations. One trend that is worrying from this point of view is that investment decisions in these sectors are being increasingly prepared and taken at local level, outside the direct sphere of influence of the central authorities. It is a huge challenge to pass on incentives to actors at these levels to make climatically sound and sustainable decisions. It is not unknown or unstudied that Chinese administrative structure, despite several restructurings over the past decades, is still characterised in many ways by attitudes of the planned economy to decision-making and implementation. There is a good deal of literature about this (see Zhao 2001, Pye 1992). What is more, it would be unwise to further politicise climate negotiations by leading them into the potentially highly sensitive area of forms of government and exercise of authority. It might on the other hand be possible in more general, need-focused terms, to draw attention to, and discuss, how incentives for climate measures might be improved, not only between countries but also within countries. An example of when these issues can be brought up is when new institutions are under discussion and are to be established, such as those within the framework of the CDM. In such contexts, actor and incentive issues could be explicitly emphasised.20 They can also be an important component of bilateral dialogue. The Canadian-Chinese C5 project, which includes measures to raise awareness, is an example of this already having been given attention. In this case, the media and journalists have been selected as a very important actor group. There may of course be difficulties of more clearly highlighting actor and incentive aspects in the current and future climate process if they are felt to be pointing fingers. This would be directly counterproductive to the effort to strengthen Chinese participation in climate co-operation. But those in China who wish to promote environmental policy and sustainability efforts – which is to say, issues that are part of the range of priorities to which the climate issue is subordinate – have already brought up processes to correct the type of structural problem that causes difficulties with compliance with the law and so on.21 If such internal ambitions can be the background to climate-related international capacity building, there is probably much to be gained. Capacity building in itself is also, as a term, key in the context since it is viewed in a very positive light in Chinese climate policy circles. While China’s achievements to date in the climate field do deserve international recognition, it is at the same time important to bear in mind that they have not been carried out thanks to or despite climate policy, but as a side-effect of completely different incentive structures. These structures need to be understood as well as made use of and encouraged to achieve more by giving Chinese climate measures greater emphasis in the future. The Swedish principle of public transparency is completely different from the Chinese administrative tradition, and is of course not directly applicable in China. On the other hand, it could very well be a background to comparative studies and capacity building projects about actors and incentives that would be interesting from a Chinese viewpoint. This could therefore 20 It might for example be the case that the transparency institutionalised through public access within the CDM (Pan 2002a), will in China have positive incentive-preserving effects, but it is of course too early to say anything about this yet. 21 See section 6 about the position of environmental policy in China. 31 be part of a hypothetical climate effort on the part of Sweden – bilateral or multilateral, oriented towards the problems described in this section. 9 Conclusions China today is in a dynamic phase of intensive construction and development. With its unique economic and energy profile, China as a country is already a key actor with regard to its size of greenhouse gas emissions. The ongoing and expected economic expansion in the coming decades involves both a serious risk of the establishment of a social structure that is even more destructive towards the climate than today, but it also presents an opportunity to avoid, in some respects, the locking in of structures that exacerbate an already difficult climate situation. Unfortunately there are many obstacles to developments of such an opportunity. The actions of the rest of the world towards China can have both positive and negative effects on how the country manages to deal with the situation. China’s climate engagement is not easily described. To understand the contexts, it is important to distinguish between the different perspectives and priorities that permeate the problem complex. Firstly, knowledge of climate change, its effects on China, and of the global dimension of the climate issue is generally poor in the country. Secondly, the issue has a heavily political aspect. This limits the scope for climate debate in China, since the image of national political unity must be preserved. Thirdly, the strong foreign policy dimension of the climate issue creates tension since patriotic prestige has a superior role. On the whole, the situation is difficult for the small climate-oriented circle of Chinese central authorities and advisory organs that together have the official and unofficial assignment of designing and implementing the country’s climate policies. When the question that introduces the discussion section of this report is to be answered (what incentives and willingness exist for more extensive Chinese participation?), one must first decide what actor perspective to use: incentives and willingness – for whom? The way of asking the introductory question, however, in distinguishing between these two terms, gives a hint of some distinguishing features. Willingness can only exist where there is climate policy competence. Incentives can be created in a much deeper layer of actors. For the policy sphere in China, it is difficult that central control is a cultural convention which in practice has great but politically unmentionable problems. This does not specifically apply to the climate issue, but its result is that those actors that appear to be responsible for the country’s climate situation in reality are strongly limited in their influence. The fact that central bodies are involved is of course a prerequisite for the participation of “official” China in any issue at all, and that is why it is invaluable that there is already established climate involvement at this level. For the rest of the world, in its efforts to extend this involvement, it is a case of working to preserve and avoid putting further stress on those circles that actually do exist. The prestige-charged foreign policy discourse of climate policy is a threat in two ways. Rhetorical issues, such as the issue of “commitments”, can block international discussion by deepening the patriotic political dimension. In addition, the possibly increased foreign policy aspect of the climate issue makes its location in leading central Chinese leadership circles essential, which can make the spread of the domestic relevance of the climate issue to local actors more difficult – local actors whose decisions and actions are the final determinants of the appearance and development of the country’s climate performance. Currently, this problem is dealt with by China’s having divided it up: on the domestic policy agenda, it is under the heading sustainable development, while all expressed opinions about climate policy are limited to the central political sphere. Domestic climate policies must therefore be packaged synergically in terms of other important Chinese priorities and ambitions that are in line with sustainability: for example, energy security, development, growth and technical progress. To contribute to domestic climate work in China, then, the rest 32 of the world needs to be aware of these priorities, which also need to be given scope within a framework of platforms that permit unpretentious discussion and dialogue as a supplement to the forums such as the Climate Convention that are so charged with foreign policy for China. It is important to have realistic expectations of what results international climate cooperation with China can achieve. For example, disappointment lies in expecting leadership in performance-oriented negotiated compromise. This is linked both to the inertia of the culture of unity and support in China, and to China’s view of the developed world as having moral responsibility for the climate problem. For those who want to promote the extension of Chinese participation, this inertia also means that it is important to make use of already existing, established mutual understanding – for example, in the Clean Development Mechanism, which used to be controversial in China. The recommendations given in this report are not in any way to be interpreted as urging the reader to uncritically adopt Chinese viewpoints, or to submit to the country’s foreign policy rhetoric. It is instead all about looking behind and beyond the difficulties and creating better conditions for confidence in the international climate arena. An important step is to allow the establishment of an agenda centred on the needs of developing countries. This agenda includes, specifically, the issue of climate-related technology co-operation being given explicit scope in bilateral and multilateral talks. This is important not least as a step in promoting trust. Different parties today have extremely different views of what technology diffusion within the framework of the Climate Convention actually means. Through extended dialogue with Chinese representatives and interests, Swedish authorities have the opportunity of playing a role in China’s extended climate engagement. Bilaterally and within the framework of the EU and the Climate Convention, Sweden can work to broaden the basis of experience and mutual understanding. Concrete areas in which exchange might be interesting from a Chinese point of view are climate science research, technology for renewable energy and industrial performance, public communication and reporting, and education and capacity building. 33 Literature and References The list below includes both quoted sources and other literature of specific or general relevance to the report. ADB [Asian Development Bank]. 2002. 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