It's worth trying to read between the lines in Hu Jintao's speech at the UN climate change conference in New York yesterday. Leaving aside the waffle that you always get in any politician's speech on the subject, the BBC cuts to the important bit about what China might be prepared to do:
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Cut carbon intensity (emissions per unit of GDP) from the 2005 level by 2020. This probably doesn't require any policy interventions at all. As technology continues to increase efficiency, giving us better cars and better power plants among other things, most countries produce more with less. Across the OECD, between 1993 and 2005, emissions intensity fell (PDF) by around 1.64% each year. The difference between unspecified cuts in emissions intensity and specific cuts in emissions, of the kind we have signed up to, is huge and this pledge doesn't really mean anything in terms of reaching the kind of global targets people are throwing around.
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Increase the amount of renewable and nuclear energy, rising to around 15% by 2020. Currently, about 6% of China's power comes from hydroelectric plants and 1% from nuclear. Other renewables produce 0.06%. This pledge will mean more dams and more nuclear plants, not more windmills. Again, that's a very good idea but it's very different to the direction of policy in the West. Environmentalists tend to be sceptical of some dams and nuclear power.
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Increase forest coverage. If you look at this measure, then we may seriously need to reappraise the performance of the United States. In his book Hard Green, Peter Huber argues that America releases about 1.6 Petagrams of carbon into the air each year by burning fossil fuels but then takes about 1.7 Petagrams in through terrestrial uptake. That is thought to be driven by a number of factors including regrowth of forest cover on abandoned farmland and previously logged forests.
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Spend on technology. This is going to happen, most of the spending will come from the private sector but it would be reasonable to complement the existing incentives produced by the patent system with a rigorous system of prizes.
The background to all this is that China is playing climate change poker ahead of the negotiations at Copenhagen. They want to make a deal that involves little or no action that might imperil economic growth while making plenty of pledges that sound serious, and allow them to demand payment from the West for their trouble. This is all about a hard headed assessment of what is in China's national interest.
As such, they've set out a series of no regrets policies that, properly managed, don't need to cost China much at all but will be catnip to the Western political class. Our leaders are so desperate for either a triumph, real or imaginary, or an opportunity to return to bashing the US right, and their opposition to cap and trade, as the villains of the piece that they'll play along. Expect the EU member states, in particular, to be manoevred into paying billions of pounds to buy these pledges from the Chinese. We'll pay a heavy price not just for our own policies, but also to support much less radical measures abroad.
The report (PDF) released by the Office of Tony Blair reveals the kind of fairy tale world Western leaders are living in. It is supposedly based upon heavyweight economic modelling but the modellers should have taken a deep breath and looked at their results before releasing it. On pages eleven and twelve it appears to tell us that the EU can impose a roughly $65 per tonne price on carbon dioxide emissions and, despite the rest of the world imposing no price at all, that will somehow increase the EU's GDP by 1.36%, while cutting the income of the US (by 0.31%) and China (by 0.38%). The reasoning appears to be that by hurting existing economic activity we will somehow shift onto a new "development path". This is optimism about the role of government in the economy taken to a ludicrous extreme, the idea that the market gets things so wrong, and government has spotted such a great opportunity, that we'll all be a lot richer if it imposes a huge tax on a specific set of competitive industries, even if other industrial powers don't.
Western leaders still seem to be prepared to ignore, or wish away, the cost of their radical environmental policies. Beijing and Delhi aren't playing ball and following their lead. It looks like ordinary people here will be the ones who pay the price for the continued attachment of their politicians to bad climate change policy.
