China Environmental Law

No one is expecting any monumental news out of the fourth China-US Strategic Economic Dialogue (SED) which starts today in Annapolis, Maryland. I suspect that reactions to the performance of Wang Qishan, vice premier of China’s State Council and the new point man for the SED process, will generate the most press coverage. We are promised an “agreement on energy and the environment” which will “cover clean air, clean water, clean and efficient production and transmission of electricity, and transportation,”  but it will be too boring for most of the news media to spend much time on. When we see the actual agreement, we’ll let you know.

To be fair, the SED process was not conceived as a news generator; its purpose is to continue a “dialogue” about important bilateral issues. So what’s on tap for the “dialogue?” — lots of environmental and energy things, so, of course this blog sits up and takes notice.  We got a preview from the Chinese side, courtesy of a column Vice Premier Wang wrote for yesterday’s Financial Times.

He notes that the “heavy consumption of energy and resources” required during China’s current “stage of accelerated industrialization and urbanization” has “made the task of protecting the environment a daunting one.” Nevertheless China will “endeavor to achieve the following goals:”

•  Intensify energy and resource conservation. He notes that China is “vigorously developing the circular economy and working to reduce energy consumption per 10,000 yuan of gross domestic product by 20% by 2010 from the 2005 level.”

[Dominic Lawson of The Independent asks, not unreasonably, "how can the representative of a government which pays its industries to burn more fuel expect to be taken seriously as a proponent of "energy conservation"?]

• Develop renewable energy. He confirms the goal of increasing “the share of renewable energy in the mix of primary energy consumption to 10% by 2010.”
• Actively adapt to global climate change. This paragraph is worth quoting in full because note the word “adapt” as the preferred response to “climate change.” There is no reference to reducing carbon emissions (although the afforestation efforts could help to reduce total carbon in the atmosphere):

We are planting more trees and better protecting natural forests. We are focusing on improving the environment in key river basins and main areas and cities in China. We are striving to lower chemical oxygen demand and the discharge of sulphur dioxide and other main pollutants by 10% from the 2005 level, expand forest cover to 20% and increase the percentage of natural reserves in China’s total land mass to about 16% by 2010. It is also our goal to control degradation, desertification and alkalisation in 52 million hectares of grassland during the five-year period from 2005 to 2010.

So where does the US fit into all of this:

Stronger co-operation between the two countries in energy and the environment will enable China to respond better to energy and environmental issues and also bring about tremendous business opportunities and handsome returns for American investors.

Now you’re talking; I like the sound of those “handsome profits.”  So how do we make this happen?

First, we should build joint laboratories or research and development (R&D) centres for energy and environmental protection technologies and promote the development of platforms for engineering application of technologies, experiment centres for industrial application of technologies, and intermediate experiment centres for technologies. Priority should be given to R&D of technologies on efficient use of fossil fuels, energy conservation, environmental protection and development of renewable energy.

Second, we should jointly formulate and implement fiscal, taxation, financial and trade policies that encourage innovation and co-operation in and transfer of energy-conserving and environment-friendly technologies. We should put in place and improve mechanisms for venture investment in high-tech start-ups in the fields of energy conservation and environmental protection, promote the introduction of technology standard regimes in these areas, enhance intellectual property protection and implement government procurement policies that favour energy-efficient and environment-friendly products.

Third, we should use existing multilateral and bilateral dialogue mechanisms and exchange platforms to strengthen consultation and co-ordination, conduct joint training and academic exchanges of technical personnel, promote exchanges among non-governmental organisations and build a database for energy and environmental information sharing for the benefit of the two sides.

Hmm, other than the encouragement of “venture investment in high-tech start-ups in the fields of energy conservation and environmental protection” I don’t see much opportunity for “handsome profits” here. Note that when Vice Premier Wang talks about “energy-conserving and environment-friendly technologies,” he talks about their “transfer,” not “sale.”

Of course, I could be wrong; let’s look at what China bought in its pre-dialogue shopping spree.

Leading businesses in China and the United States, seeking to overcome mutual suspicion of foreign investment, announced $14 billion in new business deals on Monday, on the eve of high-level economic talks to ease tensions between the two countries.

The deals involve $8 billion in Chinese investments and purchases of aircraft engines, telecommunications equipment, semiconductors and electronic components, said Chen Deming, minister of commerce in China. He added that $6 billion in other deals involved American purchases and investments in China.

Now $8 billion is nice money, but it doesn’t look like China will be toting back any pollution control, energy-conserving, and environment-friendly technologies [The Shanghai Daily, of all sources, does say that "energy-saving electronic goods" were purchased.  I haven't seen how much of the total was spent on these items, but I suspect it was quite small].