Dan Dudek: EDF Voices

The New York Times revealed in a Nov. 4 article that China has been burning as much as 17 percent more coal annually than previously thought, citing new Chinese government data. 

It was sobering news to all of us who are working to reduce China’s dependency on fossil fuels, but not necessarily a verdict on the country’s – or the world’s – prospects going forward.

It’s important to note, first of all, that China’s revised coal consumption numbers have not changed scientists’ estimates of global carbon dioxide levels in the air. Unlike national emissions data, which is based on fuel consumption statistics, global levels are measured directly.

So what do we make of the news that China, the world’s largest greenhouse gas emitter, has been underestimating coal use since 2000?

China needs good data, and knows it

Significantly higher emissions in any country increase the urgency and difficulty of avoiding the worst impacts of climate change – and this is especially true for an economy the size of China’s. However, it is significant that this story was prompted by the Chinese government reporting its own data corrections, and not by an external watchdog.

China has acknowledged the challenges it faces trying to develop robust emissions estimates, and the new numbers, though troubling, are a sign that the country is making progress in this regard.

This is important not just for the international climate negotiations that kick off in Paris later this month, but also for China’s long-term strategy.

China has made it a priority to upgrade its baseline inventory emissions data, especially for sources that might be included in its national emissions trading system. Good baseline data is a prerequisite to the effective carbon trading and reduction program Environmental Defense Fund has been working toward for 25 years.

Needed now: Deeper emissions cuts 

It’s also important to note that while the emission data was revised, China’s growth in coal consumption has actually been declining, a trend that remains unchanged and will likely continue.

The government has recently targeted 6.5 percent economic growth as the official target for the next five years, down from the recent 7- percent rate. Slower growth, air quality concerns, new requirements to invest in renewables and energy efficiency, and the international commitments to peak emissions and introduce a carbon market will all put continued downward pressure on coal. 

China’s data correction does not change our basic understanding of what it will take to reach the crucial turning point where global emissions finally level off and begin to decline.

We have long known that much deeper reductions will be required to get us there. The Paris commitments are shaping up to be a major milestone on that road, but won’t by themselves get us where we need to go.

For China, the solution remains a national carbon market that creates the incentives to  lower emissions as efficiently as possible. China remains committed to launching the market  in 2017.

For all of us who understand the urgency of global climate change, The New York Times story is a reminder that there is still a great deal of work still to be done – in China and beyond.

Editor's note: China unveiled its official climate plan in June 2015. It confirmed that the country expects emissions to peak by 2030 and possibly sooner, and that non-fossil sources will make up 20 percent of China's energy mix that year. It also sets targets for carbon intensity and forest stock.

Over the past 23 years, I've seen the most populous country on Earth transform itself from a largely traditional, rural society with cities full of bicyclists to a modern nation of megacities and cars. I've seen air pollution and environmental degradation soar.

But I've also found a growing resolve among Chinese leaders to tackle these challenges.

A new, incentives-based environmental protection law just went into effect, and China is preparing to roll out the world's largest carbon market. This is a country with a can-do attitude, a society I believe is headed in the right direction.

New legislation imposes stiff fines for polluters

On Jan. 1, 2015, China's first amendment to its environmental protection law in 25 years took effect. It's transformational in scope.

The law now has provisions for penalties and for public interest litigation against polluters, and it requires a nation-wide implementation of an environmental permit system, which is the basic legal instrument for control.

It’s a project we worked on for more than 10 years. It took a lot of effort and a lot of engagement with everyone from the Ministry of Environmental Protection and all the way to the top.

I even had the opportunity to sit down, face to face, with former Premier Wen Jiabao two years ago and recommend to him that the penalty provisions be changed. I made the same recommendation to Premier Li Keqiang in early 2014.

By the end of April that year, the law was changed.

We had looked at the existing law, thought about it from the standpoint of the real incentives to enterprises, and really tried to bring a modern theory of environmental enforcement to China.

Before the reform, the highest fines for violating the law were capped at $160,000 total, which was no serious deterrent for large companies, in my view. On January, 2015, penalties became cumulative, which means they run from the day of violation to the date of compliance.

Progress continued in August of this year, when China’s Air Pollution Prevention and Control law was amended for the first time in 15 years to also impose a daily penalty. Previously, the cap for air pollution fines had been $80,000. The amended air law will become effective on January 1, 2016.

For the first time in China, it's now more expensive to continue to emit beyond legal limits than to control emissions.

Why China is at the center of our climate strategy China is embracing cap-and-trade

Our involvement with China's carbon market goes back to the first trip I took to Beijing in 1991 to discuss cap-and-trade for sulfur dioxide, and the work the United States was doing at the time to address acid rain.

We opened our first office in the city soon after - and as our work in China deepened, we found a way to partner with Chinese colleagues to do some local experiments to test out various types of emission trading strategies.

I was invited to take the results of those tests and personally brief China’s then-environment administrator, Xie Zhenhua. I thought we’d meet for 15 minutes, but it turned into an hour-long session.

Mr. Xie really got the idea; he was on fire about it. Several years later, after he took office as China's climate minister, carbon emissions trading pilots were launched in China.

Next: A national carbon market

One thing I’ve learned about China is that business there is intensely personal, based on relationships that are built up over time establishing mutual interests.

We conducted the first, voluntary carbon-dioxide trades in China with a multinational looking to offset all its corporate emissions, followed by a trade with a domestic Chinese company. Each time a transaction was completed, we were able to talk with Minister Xie and tell him what we had learned.

Eventually, China got to the point where it wanted to develop its own mandatory trading program. Today, Environmental Defense Fund is collaborating with China's National Development and Reform Commission to conduct training for all seven carbon market pilots operating in the country.

The next step will be China's launch of a national market in 2016. This market will be critical for China to meet its goal to have emissions peak by 2030 - a goal we believe requires the country to, at a minimum, cap carbon dioxide emissions at 2015 levels by 2020 for sources responsible for at least half of such emissions.

No doubt, China will have to make some tough decisions to bend the curve on carbon.

Today, you see many of the same forces at stake in China as you do in the United States. People are worried about jobs, competitiveness and the cost of pollution controls; and some question whether the problem is real.

But the Chinese are bullish on their ability to tackle big challenges, given what's been accomplished in modern China. With this perspective, they also think that environmental problems can be solved.

The market will be their tool to do so, and the will is now there.

EPA Administrator Gina McCarthy visited China this month to discuss how our two countries might continue to work together to combat climate change. This cooperation is an absolute necessity, as the two countries are the world’s top two emitters. You may be familiar with United States based efforts, but less so with the impressive work being done in China. While it’s easy to find news focusing on the very real environmental challenges facing China (such as air pollution or water scarcity in the north due to coal-fired plants), these are only half of the story. The meaningful impact of the solutions underway today is the other side, and one more people need to hear.

Change isn’t only possible, it’s happening on a significant scale.

Carbon trading programs help reduce emissions

With EDF’s help, China is laying the foundation for a national carbon market that would reward industries that reduce climate pollution. The Chinese government designated seven regions for pilot carbon trading programs to reduce carbon emissions in the country’s main economic and energy consumption areas, while informing plans to implement the program nationally.

I was honored to participate in the exciting launch of China’s first pilot carbon trading program in Shenzhen, the nation’s hub of economic innovation. EDF has supported the development of Shenzhen’s program and also helped broker an agreement between California and Shenzhen to collaborate on the design and implementation of carbon emissions trading systems.

The program in Shenzhen is set to reduce carbon emissions per unit of GDP in the city by a staggering 21% by the year 2015. Since that time three other pilots have launched, including the largest in Guangdong province on December 19. EDF is now responsible for a coordinated training program for all seven pilots in cooperation with the National Development and Reform Commission.

Carbon trading programs are reducing poverty

Poverty alleviation is China’s top priority. In partnership with the State Council’s Poverty Alleviation Office, we’ve created a low carbon farming pilot program which helps alleviate poverty and reduce carbon emissions by rewarding farmers who adopt climate-friendly practices that also improve agricultural efficiency.

Through pilot projects, already over 400,000 poor farmers have reduced greenhouse gas emissions by 1 million verified metric tons, and earned additional income primarily by increasing crop yields and reducing input costs — all while improving local air and water quality.

That’s a remarkable accomplishment, but we’re on track to do even more: It’s our goal to reach out to additional two million farmers in low-carbon farming by the end of 2015.

Greening the supply chain in China is greening the global supply chain

EDF is partnering with companies in China to help their suppliers improve energy efficiency. We are also working with the Chinese government, the country’s largest purchaser, in designing a green public procurement guideline, to accelerate adoption of energy efficiency practices by awarding contracts only to factories adhering to green supply chain guidelines.

Our past experience shows this is one of the most effective ways to drive change in China. And since China supplies so much of the world’s manufactured goods, changes in the way they do business have far reaching impacts.

With our help, China’s largest domestic retailer saved 50% on the energy bills of a supermarket that switched to LED lighting; the results open the door to spreading energy efficiency to more of the company’s 6,000 outlets.

Training thousands in a new generation of environmental leaders

So far, over 19,000 Chinese environmental enforcement officials have graduated from our environmental enforcement training programs conducted in collaboration with elite Chinese universities. We plan to bring the number of EDF-trained officers within China’s 80,000 person enforcement force to over 25,000 by the end of 2015.

What’s next?

The Chinese government is laying out its new development plan for the next five years, and EDF has been invited to offer our recommendations. It is critical that their plan includes strong policies that reduce air and climate pollution, and as we’ve been doing for the last 20 years, we’ll continue to do everything in our power to help make it so. I sincerely hope you’ll support us to ensure this work can continue and expand.

Make a gift to support this approach.