How often have you heard people say: “There’s no point in me doing anything on carbon reduction – look at China”? Or “Don’t you know the Chinese are building two new coal-fired power stations a week?”
But what if China were to go it alone on cutting carbon? Would it give a boost to movements like Transition that are predicated on a move out of fossil fuels, or to grassroots carbon reduction initiatives like Carbon Conversations or Transition Streets? Would it give national governments a reason to take CO2 cuts more seriously?
China is the world’s largest emitter of CO2, narrowly ahead of the USA. But that overstates China’s contribution to the carbon problem. Per person per year, Chinese citizens generate about a third of the CO2 of their US counterparts. Also, a third of China’s emissions are the result of exports – mainly Western consumer goods. And nearly a third of the emissions currently in the atmosphere were put there by the USA, whilst China is responsible for only about 9 percent.
Fatih Birol, Chief Economist at the International Energy Agency, was recently quoted as saying: “The Chinese government has made huge efforts in energy efficiency, and a major effort on renewable energy such as hydroelectricity and wind.” He’s not kidding. China makes 80 percent of the world’s solar panels, most of them for export, but it’s also installing renewables at a faster rate than any other country, and last year produced more solar and wind power than anyone else.
Seven Chinese cities are already experimenting with carbon trading programmes and the Chinese government has been working hard to reduce the carbon intensity of production – emissions per unit of gross domestic product (GDP). But now there are rumours of an absolute limit over which emissions will not be allowed to rise – a so-called ‘hard cap’ – in Beijing’s next Five Year Plan, which begins in 2016.
Anatol Lieven, professor of international relations at Kings College London, believes such a policy might encourage others to follow suit: “A Chinese move towards unilateral carbon reduction could make a significant difference on the international stage where UN negotiations to achieve an agreement on tackling climate change have so far failed.” He says the Chinese need to reduce their dependence on fossil fuels because “the high prices are starting to hurt their economy and pollution is choking their cities.” But he adds: “The Chinese are just as likely to make a Green Leap Forward because they understand it’s the economic future and they want to dominate it.”
By contrast, Washington mostly seems to be stuck in the past, in thrall to fossil fuel companies. But maybe the Americans are starting to understand that the future is green. In July the Chinese and US governments signed an unprecedented bilateral agreement to collaborate on cutting carbon from heavy trucks and buildings, as well as to work together on ‘carbon capture and storage’, a way to store CO2 emissions underground.
If China’s communist leadership do sanction a hard cap in their next Five Year Plan, they still need a coherent strategy for reducing emissions. The UK has a hard cap – the 2008 Climate Change Act – which requires emissions to be reduced by 80 percent from 1990 levels by 2050.
But in the words of environmentalist Jonathon Porritt: “There remains an undeniable gap between the current policy mix and what we actually need to do urgently both to reduce emissions of greenhouse gases and to avoid the potentially devastating consequences of declining fossil fuels.” Porritt is a supporter of Tradable Energy Quotas, or TEQs, a way to use the market to remove fossil fuels from a national economy efficiently and fairly [see below for how TEQs would work].
Another possible solution is ‘Cap and Share’. This involves setting a hard cap on emissions, taxing fossil fuel companies and distributing the money raised to the population, or maybe to councils to spend on local amenities. Cap and Share would be easier to administrate than TEQs, but it would be less visible to citizens; there’s no “we’re all in it together”, no sense of common purpose.
James Hansen, who recently quit his role as a NASA scientist to campaign on the environment, has promoted the idea of a ‘Fee and Dividend’ system whereby carbon taxes would be returned to citizens in the form of an equal annual cheque. But the problem with carbon taxes is that they don’t set a total for how much carbon is to be removed from the economy – only a hard cap can do that.
It’s often argued in the Transition movement that there’s no point waiting for governments – local communities should just get on with building the future they want. Shaun Chamberlin of TEQs, an organisation promoting Tradable Energy Quotas, demurs. “There are numerous grassroots campaigns focused on reducing carbon,” he says. “They’re great for raising awareness at an individual, household, community, organisation or business level, and for assessing psychological barriers to change, but they’re voluntary, not systemic. What’s needed is TEQs at the national level to complement voluntary carbon reduction schemes at the local level.”
As the creator of TEQs, the late Dr David Fleming, once said: “Large-scale problems do not require large-scale solutions – they require small-scale solutions within a large-scale framework.” TEQs is exactly that – it’s a national framework that allows individuals to take action however they like.
First published in Transition Free Press 3 (Autumn 2013).
How Tradable Energy Quotas (TEQs) would work
1. Each week every adult would be given an equal, free entitlement of TEQs units, deposited in their personal TEQs account. Other energy users (government, businesses and organisations) would bid for the units they need at a weekly auction.
2. When you pay for fuel or energy, TEQs units corresponding to the amount of energy you have purchased would be deducted from your TEQs account.
3. If you used less than your weekly TEQs entitlement, you would be able to sell your surplus. If you needed more TEQs, you could buy them. All trading would take place at a single national price, which would rise and fall in line with demand. Buying and selling would be as easy as topping up an Oyster card or mobile phone.
4. The total number of units available in the country would be set in the TEQs budget. The size of the budget would go down year by year, thereby reducing the amount of carbon used in the economy.
5. The TEQs budget would be set by the Committee on Climate Change, which is independent of the government. Any money raised by the state from selling TEQs would be spent on greening the economy.