Can China maintain its current pace of growth while successfully building a low-carbon economy? During today's OnPoint, Thomas Peterson, president and CEO at the Center for Climate Strategies, discusses the details of the U.S.-China EcoPartnership and explains how provincial partnerships between the United States and China could lead the way to broader national cooperation. He also talks about his organization's work to facilitate the dialogue between the two countries.
Monica Trauzzi: Hello, and welcome to OnPoint. I'm Monica Trauzzi. Joining me today is Tom Peterson, president and CEO at the Center for Climate Strategies. Tom, good to have you back on the show.
Thomas Peterson: Thank you.
Monica Trauzzi: Tom, you've been working closely with the Chinese on provincial planning on climate, economic, and energy issues, and this is all happening under the U.S.-China EcoPartnership. Explain how the partnership is working and sort of what the driving force behind these talks is.
Thomas Peterson: Yeah. This partnership is a cooperative mechanism, and it's designed to advance what we call low carbon development really in both countries. But in China, under its Five-Year Plan, each of the provinces has to meet a set of goals on emissions reduction, economic growth, and energy intensity reduction all at the same time. This is a cooperative mechanism to really help the United States' states that have done similar work share that expertise, share that assistance, along with third party assistance from our organization and the counterpart in China, to help the provinces of China understand how best to go about doing that.
Monica Trauzzi: China is growing so rapidly. I mean, many would question their ability to even tackle environmental issues when they're expanding so quickly. I mean, do you think that that's, it's viable that they actually can address environmental concerns while growing as rapidly as they are?
Thomas Peterson: It's remarkable how much progress is already underway. It's also remarkable how much more needs to be done. But for a long time, Guangdong Province in particular, but China more broadly at the national level, has been undergoing what we call industrial shift and energy shift, deliberately encouraging more efficient, lower carbon industries to locate and operate, and trying to discourage ones that can't meet those kinds of standards. And so energy intensity has actually gone down significantly in China, and this is over a long period of time. They're in the process of making an economic transition that's becoming greener, if you will, and they're doing it for a series of long-term reasons. And they've made progress, but this is all about how much more can be done, and how to go about doing that.
Monica Trauzzi: So let's talk about the work that's happening between Guangdong and California. They've come together to accelerate a low carbon economy. How is that partnership working?
Thomas Peterson: It's just been formalized, although we've been creating an informal exchange between not only California, but other states, and Guangdong and other provinces in China now for a couple of years, since we've been helping out. But the idea is really to let the largest province in China and the largest state in the United States compare notes and share the best of what each has in terms of enabling each other to move forward in these areas. And there are a whole series of areas that they focus on in terms of end results. But what's underneath that is expansion of capacity, expansion of investment, expansion of technology.
Monica Trauzzi: The dynamic, though, between the U.S. is a really interesting one to watch. There's heavy competition on the technology front. We've even seen some trade cases happening. Yet we also see the two countries working together. So how complex would you say that relationship is between the two countries?
Thomas Peterson: Yeah. I think the framing is that it's inevitable when you have two superpowers that are moving forward in a particular direction, and of course, we are economically and on the energy front, there's going to be a shift in markets that involves competition, it involves actions that are basically neutral and have no particular effect either way, and then cooperative actions. And if you look at any particular activity that fits in one of those boxes, the question is whether we can expand that box on cooperation and minimize the box and understand it better on competition. And I think the answer is clearly yes. On the competition side, it may also be that that's something that we don't want to zero out, because it stimulates innovation.
Monica Trauzzi: How much transparency exists within the Chinese government on what they're reporting on how they're hitting those environmental targets?
Thomas Peterson: Well, they have a variety of environmental targets, air quality, water quality, and now carbon is becoming a central part of this. The carbon part of it is just unfolding, and literally the work that we're doing right now is helping the provinces establish a system that they can use for putting baselines in place and scoring out the impacts of activities that are already underway. And it's anticipated in the long term that that system will have the same kind of capability for transparency, for reporting, for information exchange, that we have here in the United States, and that other countries have. But every country is going to do this a little bit differently, a little bit uniquely. So I think that's the expectation in the long term. Right now, we've seen increases in the reporting and in the convergence of different reports on things like air quality. So I think what we're seeing is in the traditional air quality/water quality arena, that's improving, it's converging.
Monica Trauzzi: So the criticism that we've seen that they're perhaps not quite so up front about their reporting, you think that's going to phase out?
Thomas Peterson: Well, on the air quality side, we've seen less differences between the reporting say from the embassy and the Chinese government.
Monica Trauzzi: OK.
Thomas Peterson: I think it's a slightly different ball game on carbon. This is not all about transparency and reporting. It's about this economic transition and this energy transition that's taking place, and then the roll that carbon is going to take place in that. Pollution reduction is one of the outputs that needs to be reported and is a concern, but there are other really important outputs around energy and economy that are equally important. So this is all underway and remains to be seen.
Monica Trauzzi: So stemming from this provincial partnership, what are the broader ramifications, and are there expectations that the broader national governments will become involved eventually?
Thomas Peterson: Well, there's a lot of interest in a bilateral agreement between the United States and China. The great hope is that these two countries, which are the leading emitters and energy users worldwide, and occupy this very, very special role in terms of world leadership, if they make progress, then it enables the broader international community to come together around these global warming issues. And so the agreement between California and Guangdong is a very tangible example of what that might actually involve when you translate it to on the ground action, and it can play a significant enabling effect within both countries to help move forward towards a national relationship that's a little bit more specific on these issues.
Monica Trauzzi: You've spent quite a bit of time in China. Reflect a bit on your experiences and your sense of their level of commitment to growing the economy, but also addressing some of these environmental concerns.
Thomas Peterson: Yeah. I think it's very serious. I think China is committed to economic growth for a whole series of reasons, but they realize that that has profound implications for energy use. Where is that energy going to come from? It has profound implications for resource use, for human health. How do you have your cake and eat it, too? How do you maintain that economic growth, which they really see as an imperative, but they know that these other things are imperatives, and they're going to be necessary ingredients for that? So I think they're quite serious, and I think as a consequence, one of the more interesting and serious things they did under the Five-Year Plan was literally assign targets to their governors in the provinces, and I think you have to take that very seriously.
Monica Trauzzi: All right. Very interesting. We'll end it right there. Thank you for coming on the show.
Thomas Peterson: Thank you.
Monica Trauzzi: And thanks for watching. We'll see you back here tomorrow.
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