In Battle for U.S. Carbon Caps, Eyes and Efforts Focus on China

By Steven Mufson
Washington Post Staff Writer
Wednesday, June 6, 2007

Supporters of limits on greenhouse gases are betting that the road to U.S. climate-change legislation runs through China.

This year, China is expected to surpass the United States as the leading producer of greenhouse gases, and one reason the Bush administration has declined to enact emissions limits is its concern about leaving China unchecked.

So a variety of lawmakers, environmentalists and business leaders are looking at ways to engage China in the battle against climate change -- or pay the price for doing nothing. Proposed strategies range from providing financing and technology transfers to imposing special carbon-based import tariffs or changing supply contracts.

Dealing with both U.S. and Chinese inaction on greenhouse gases is expected to be high on the agenda today when President Bush meets with fellow leaders from the Group of Eight industrialized nations. European leaders have tried to press Bush into endorsing mandatory limits on greenhouse gases; Bush has balked. Instead, he proposed last week that 15 countries, including China, start negotiations this year on limiting emissions but without setting specific standards.

In anticipation of climate change talks at today's G-8 meeting, Todd Stern of the Center for American Progress and William Antholis of the Brookings Institution have proposed the creation of an "E-8" group that would deal with ecological issues and would include China, India, Brazil and South Africa.

Others are looking toward measures that are within control of Congress and could be part of a climate-control package. "There is a lot of discussion up on the Hill about whether within the context of U.S. legislation there would be language that would put China on the hook for action as well," said Joanna Lewis, a senior international fellow at the Pew Center on Global Climate Change.

The debate is similar to the one that led the Senate and the Bush administration to reject the Kyoto treaty on greenhouse gases. Then, as now, foes argued that making U.S. greenhouse-gas producers pay for their emissions would only hand Chinese competitors a bigger advantage.

Kathleen A. McGinty, secretary of Pennsylvania's Department of Environmental Protection and former adviser to Vice President Al Gore, thinks import tariffs are one option. She argues that it would not violate World Trade Organization rules, which she says allow tariffs "when public health is at stake."

Michael G. Morris, chief executive of American Electric Power, recently made a similar suggestion in testimony before the House Energy and Commerce Committee.

"If other countries refuse to reduce emissions but seek to continue to sell their goods in the U.S., our proposal would implement an appropriate measure to equalize the conditions of global trade," Morris said. He said such measures could include "border adjustment taxes" equal to domestic greenhouse gas costs.

Not surprisingly, the Morris proposal has the support of Edwin D. Hill, president of the International Brotherhood of Electrical Workers. Though it has an environmental rationale, it would be a protective tariff of the sort that many unions have long fought for in a losing battle against free-trade advocates.

Environmental groups have different views. "Connected to the right domestic legislation, we think that proposal is a way to solve the domestic political problem in a way that lets us move forward at home without disadvantaging American companies and workers," said David Doniger, policy director of the climate center at the Natural Resources Defense Council. "It also creates some diplomatic leverage to use to get China to take on stronger commitments."

Others see the tariffs or fees as efforts to sink climate-change legislation. "China's rapidly growing emissions are a serious issue," Phil Clapp, president of the National Environmental Trust, said in an e-mail. "But many diehard opponents of enforceable limits on global warming pollution who now can't hide behind the science are trying to hide behind China. Note who keeps raising the China issue: the coal industry, the oil industry, members of Congress from coal states and the auto industry. They raise threats to American competitiveness that are bogus, on the whole."

Some businesses are taking their own steps to influence Chinese behavior -- and polish their own images as "green" companies. Yesterday computer maker Dell, which spends $16 billion a year on Chinese-made parts, said it would add a question about carbon emissions to the quality-performance reviews it gives its suppliers. "The total score is a big part of whether they get our business," said Dell spokesman Brian Hilton, who also said the carbon emissions would be worth two points, often enough to send Dell to a different supplier.

Whether these measures will alter Chinese behavior is uncertain. China has argued that it should not have to reduce greenhouse gas emissions because the average person in China emits a fifth of the greenhouse gases and consumes a seventh of the energy that the average American does. It has set continued economic development as its top priority.

China's own climate-change plan issued Monday was seen as only a modest step forward. Though the plan backed ambitious targets for fuel efficiency and the use of renewable energy, it did not back greenhouse-gas targets.

Will Bush's proposed negotiations alter that? China experts note though Bush is seeking to negotiate with senior Chinese leaders, the government often has little to do with investment decisions by companies, cities or provinces in need of electric power.

"It raises interesting questions about engagement," said Erica Downs, a China energy expert at Brookings. "Whom do you engage with?" She noted that while the Chinese government set an energy-efficiency goal for every year through 2010, it reduced energy use by only 1 percent in 2006, short of the 4 percent target.

That's why many U.S. groups are trying to engage local, provincial and business leaders and convince them that energy efficiency would not only slash greenhouse-gas emissions but would also make economic sense. The NRDC has staff in China pointing out to decision makers at different levels that cutting energy use could ease bottlenecks and burdens on overloaded railroad and power-transmission lines.

Other experts on China doubt that retaliatory duties will work better than Bush's approach. "Stick-based approaches are not likely to be very fruitful," said Lewis of Pew. "China could just as easily walk away from something like that."

Many lawmakers and environmental groups say the best strategy is for the United States to lead by example. "China is using the United States as an excuse for doing next to nothing to deal with their greenhouse gas problems," said Rep. Edward J. Markey (D-Mass.), chairman of the Select Committee on Energy Independence and Global Warming. "Anything we do back toward China will be viewed as hypocritical, like preaching of temperance from a bar stool."

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