China Environmental Law

The parties were “robust” in their self-congratulation:

The SED process has achieved mutual benefits that can only arise through consistent, candid dialogue and consultation. It has become an effective framework for resolving differences and addressing challenges arising from fast-moving bilateral trade and investment issues, thereby advancing the fundamental interests of our countries and peoples.

(Joint U.S.-China Fact Sheet: The Fifth U.S.-China Strategic Economic Dialogue, p.4).

The results on the economic front at SED V, however, were “anemic.” The US went so far as to include the adoption of the Equator Principles by China’s Industrial Bank as one of the agreements reached “in further opening of China’s services sector.” (U.S. Fact Sheet: Fifth Cabinet-Level Meeting Of The U.S.-China Strategic Economic Dialogue, p.2). Yet, Industrial Bank made its announcement regarding the adoption of the Equator Principles over a month ago without any reference to the SED process (CELB commented on the announcement here).

There was more action on the environmental and energy fronts. Here’s a roundup of the E&E announcements ¹. My comments are in blue.

U.S. - China Ten Year Energy and Environment Cooperation Framework

Building upon the signing of the U.S. - China Ten Year Energy and Environment Cooperation Framework at the fourth Cabinet-level SED meeting in June 2008, the United States and China reached consensus on action plans for each of the five goals under the Framework:

1. Clean, Efficient and Secure Electricity Production and Transmission;
2. Clean and Efficient Transportation;
3. Clean Water;
4. Clean Air; and
5. Conservation of Forest and Wetland Ecosystems.

Short-term, medium-term and long-term goals were identified under each of the five goals. CELB will try to get a copies of the action plans/short-, medium-, and long-term goals for these five items. There could be many good prorams here (I will be reporting on some of the air work shortly), but I’d like to see the plans/goals before offering further comments.

The U.S. and China also reached agreement on the establishment of a goal for energy efficiency to address:

• Energy efficiency in buildings and communities;
• Industrial energy efficiency; and
• Consumer recognition of energy efficient products.

An action plan detailing cooperation between the United States and China energy efficiency will be developed before the next meeting of the SED.

Energy Conservation and Clean Water MOUs (under the Ten Year Framework)

The United States and China signed two memorandums of understanding (MOU) on energy conservation and clean water cooperation. It appears that these MOUs are part of the Framework efforts described above.

Energy Efficiency

Under the MOU on energy conservation and environmental protection signed at SED V, the United States, through the U.S. Trade and Development Agency (USTDA) and the U.S. Export- Import Bank, and the People’s Republic of China, through the National Development and Reform Commission (NDRC) and the Export-Import Bank of China, will jointly support public private partnerships to address deficiencies in energy efficiency in Chinese enterprises; the U.S. and Chinese export-import banks will facilitate the financing for select projects that involve U.S. exports; and both sides will jointly organize trade facilitation activities.

The U.S. Trade and Development Agency (USTDA) and China’s National Development and Reform Commission (NDRC) will jointly develop a curriculum and training to expand capacity within the Chinese national and provincial governments, and within industry, on conducting energy efficiency audits to promote pollution reduction and energy efficient enterprises.

Clean Water

Under the MOU on clean water signed at SED V, the United States, through the U.S. Trade and Development Agency (USTDA) and the U.S. Environmental Protection Agency (EPA) and the People’s Republic China, through the Ministry of Environmental Protection, will cooperate to establish a public-private partnership, working through U.S. trade associations, to leverage U.S. private sector expertise and resources to build on current bilateral efforts under the Ten-Year Framework to support China’s high priority clean water program.

Both of these MOUs are excellent ideas. The USTDA sat down and listened to people on the ground regarding these initiatives. They are well-tailored to get things done. Full speed ahead.

EcoPartnerships Framework (under the Ten Year Framework)

EcoPartnerships are targeted at the sub-national level, and are voluntary, cooperative efforts between U.S. and Chinese entities. They include local, state or provincial government-to-government partnerships, and partnerships among businesses, universities and nonprofits, where ideas can be tested in targeted areas before broad introduction. Through voluntary cooperative partnerships, EcoPartnerships will demonstrate new models for sustainable economic growth and advance energy security, economic sustainability and environmental sustainability.

The US and China welcomed the creation of seven EcoPartnerships:

• Denver, Colorado / Ford Motor Company and the City of Chongqing / Chang’an Motors: Focused on implementation of electric and plug-in hybrid vehicles, this partnership has the potential to significantly advance the global development of electric and plug-in hybrid vehicles.
• Greensburg, Kansas and Mianzhu City, Sichuan: Greensburg, Kansas was 95 percent destroyed by a tornado in May 2007 and made a commitment to sustainable redevelopment. Mianzhu City was one of the most heavily devastated areas in the May 2008 earthquake in Sichuan province. The EcoPartnership represents an opportunity to demonstrate new models for comprehensive, eco-friendly sustainable development and is focused on economic revitalization in rural America and China.
• Energy Future Holdings Corp. (U.S.) and China Huadian Corporation (China): Both companies are pursuing the development of sustainable business models for “clean energy” in the United States and China, particularly in the area of clean coal.
• Tulane University (Louisiana) and East China Normal University (Shanghai): The two universities will work together to develop a global model for the sustainability of coastal cities, focused on restoration, conservation and enhancement of environmentally sensitive wetland areas.
• Port of Seattle (Washington) and Dalian Port Corporation (Liaoning): The partnership between two of the world’s largest sea ports aims to develop a global model for energy efficient and environmentally sustainable ports.
• Wichita, Kansas and Wuxi City, Jiangsu Province: The partnership is focused on demonstration and implementation of advanced technological solutions for clean air and clean water.
• Floating Windfarms Corporation (U.S.) and Tangshan Caofeidian New Development Area, Hebei (China): Floating Windfarms Corporation is developing clean energy technologies for the Tangshan Caofeidian New Development Area, focusing on offshore wind farm technology.

Each of these EcoPartnerships will last a minimum of two years, and will report progress on their initiatives at future meetings of the SED. Additional information about EcoPartnerships can be found online at www.EcoPartnerships.gov.

No comment. Oh good Lord, I have to comment! Some of the individual “partnerships” obviously hold more promise than others. But the EcoPartnership program is a complete boondoggle. The US-China energy and environmental cooperative/coordination space is already jam packed with initiatives and organizations driven by the private sector and NGO’s. There is absolutely no reason to replicate those efforts at the United States Treasury Department! Find an existing platform (I can recommend plenty), and spin this program off now. And a note to whomever manages this program in the future: please read this post’s recommendations and warnings regarding “pilot projects” in China.

EcoCity Demonstration Project (under the Ten Year Framework)

The United States, through the Department of Energy, and the People’s Republic of China, through the Ministry of Housing and Urban-Rural Construction, agreed to conduct an EcoCity policy study, strengthen capacity building, promote science and technology development, and design an EcoCity demonstration project under the Ten Year Framework.

Pretty soon it will be hard to stick a pin in a map of China without piercing a proposed EcoCity. I guess that’s good news. I just hope a few of them get built.

Technology cooperation on gas hydrates exploration and development

The United States supports enterprises and academic institutions of both countries to conduct technology cooperation on gas hydrates exploration and development; and the U.S. agrees to work with China regarding the possibility of providing marine acoustics equipment for geophysical exploration.

Co-sponsor a sustainable forest management and forest rehabilitation training workshop

Both the U.S. and China agreed to jointly support a pilot project on wood charcoal alternatives in Central Africa. This joint project represents the first third country cooperation effort involving the United States and China in Africa. Both countries have also agreed to sponsor a sustainable forest management and forest rehabilitation training workshop before June 2009 under the Asia-Pacific Network for Sustainable Forest Management and Rehabilitation (APFNet).

Combat illegal logging

The United States and China agreed to support their efforts in combating illegal logging and associated trade by exchanging data including import and export data on wood and wood products bilaterally and review expanding the scope after a year; to continue to enhance our shared understanding of “illegal logging” and explore its practical applications in support of cooperative efforts under the memorandum of understanding on Combating Illegal Logging and Associated Trade; and to co-host an international workshop on “Policies on Trade in Timber and Timber Products” in December 2008.

I recommend Suifenhe as the site of the workshop.

Enhance marine cooperation

The United States and China agreed to enhance marine cooperation including data sharing/exchange and joint strategies concerning sea-air interaction and climate change, ecosystem-based management, marine conservation, ocean governance, and coastal resiliency. They also agree to convene in 2009 the Joint Working Group on the Protocol on Marine and Fishery Science and Technology Cooperation.

Address mercury issues

Both the U.S. and China have agreed to strengthen cooperation in addressing mercury building upon their cooperation under the United Nations Environment Program’s Global Mercury Partnership, with the goals of reducing demand for mercury in products and processes, more effectively managing mercury-containing wastes, and promoting best practices and techniques for reducing mercury emissions.

Support for China’s Membership in the International Energy Agency (IEA)

The U.S. announced support for China to join the IEA as a non-OECD member. China acknowledged the U.S. position and intends to further enhance its dialogue and cooperation with the IEA. This position builds upon previous commitments at the past two Cabinet-level SED meetings.

* * *

As to the success of the overall SED effort, I would echo the judgment of Jeffrey E. Garten in his Newsweek piece, “Why Obama Must Go to China”

For all this effort, Paulson deserves credit on two scores: he kept a comprehensive and friendly exchange with Beijing going at a time when the Bush administration was distracted with Iraq, Iran and other issues in the Middle East; and he discouraged Congress from enacting retaliatory action against China’s rising trade surplus with the United States. Yet progress with China was generally modest, and Paulson’s efforts reveal that even a powerful and determined cabinet-level official, even one with such vast ties to Chinese officials, can do only so much.

I would give the SED process no credit for energy and environmental cooperation. There were no earth-shaking achievements in these fields. Although Treasury has certainly been cooperative on these efforts, there was nothing accomplished that could not have been achieved by US and Chinese environmental and energy officials working on their own (and they were already working well together before the SED process started).

The US-China Dialogue should continue, but its needs some tweaking. From what I have been told, the new administration will be good tweakers in this area.