I have been focused on clean energy for some time now and I am passionate about the topic. It’s a global issue. To this end, I have been working on projects in both the US and China, 2 of the biggest problem spots in the world (or, blame it on my capitalist training when I say: 2 of the biggest market opportunties for new energy technologies).

All the talk over the last week about “China’s National Climate Change Programme” has made me really think about how I frame the energy problem. And, actually, I sat down to write this post with a mind to criticize China’s newly published position. However, once you get past all the defensive rhetoric that basically points fingers at the developed world and hides behind the UN and Kyoto, I think their position is very well formulated. The trick —as always— is in the execution, so hopefully I won’t have to sit down and write that critical post some time in the future (we’ll see though, honestly, China’s track record is pretty poor so far!).

The first paragraph of the report rightly points out the fundamentals:

Climate change is a major global issue of common concern to the international community. It is an issue involving both environment and development, but it is ultimately an issue of development.

The way I see it (at the risk of over-simplification), development has 3 main factors: 1) population, 2) standard of living and 3) efficient use of collective knowledge (ie, technology). China’s program addresses each of these in various ways. Bottom line is that China’s huge population, multiplied by its increasing standard of living requires the full force of advanced global technology to develop sustainably, so let me focus on that last bit by citing 3 passages from the program document:

1. Technology cooperation and transfer. Technology will play the central role in addressing climate change. International technology cooperation and transfer should be strengthened to share the benefit of technological development worldwide. Measures in this regard should include the following: establishing an effective technology cooperation mechanism to promote R&D, deployment and transfer of technology of addressing climate change; eliminating obstacles to technology cooperation and transfer in terms of policy, institution, procedures, financial resources and protection of intellectual property rights; initiating incentive measures for technology cooperation and transfer to ensure its occurrence in reality; establishing a special fund for international technology cooperation so that environment-and-climate-friendly technologies are accessible and affordable to developing countries.
2. Needs for technology transfer and cooperation, Technology need for mitigation of climate change. China is at the stage of large-scale infrastructure construction, and is in urgent need of technology for reducing greenhouse gas emissions. China’s technology need for mitigation of climate change mainly covers advanced energy production and utilization technology, environmental protection and resource comprehensive utilization technology, high-efficiency transportation technology, new material technology, new-style building material technology, etc. Among these needs, the high-efficiency, low-pollution coal-burning power generation technology, large hydropower generation unit technology, new generation nuclear technology, renewable energy technology, building energy conservation technology, clean fuel vehicle technology, hybrid vehicle technology, urban rail-based traffic technology, fuel cell and hydrogen technology, oxygen-rich coal-spray blast furnace & long-life span technology, comprehensive technology for transformation and expansion of medium and small nitrogenous production facilities, new paving material technology, and new-type wall-body material technology are the priorities. Introduction and diffusion of these technologies in China will make significant difference to the country’s efforts to control greenhouse gas emissions.
3. Development of human resources. Capacity building needs for development of human resources mainly include personnel training, international exchange program, discipline development and professional training in the area of fundamental research on climate change, policy analysis on mitigation and adaptation, information system development and CDM project management.

First, let me say that I applaud the Chinese government here for stepping up and listing off a pretty extensive list of things they are currently lacking and need help to develop. While this is embedded in a carefully positioned paper, culturally, it is a big step for China to make these statements (even though they are artfully worded to preserve as much face as possible).

HOWEVER (here comes my pitch for open markets, free trade and privatization), these things cannot be realized just by virtue of being written down in a plan. Sure, China’s command and control style is famous for implemeting radical change quickly, but the most efficient way to truly diffuse best of class technologies and get them into play as fast as possible in China is to set up a free market structure and let the players go to work. This includes effective rule of law, policy transparency and intellectual property protection. It also includes lowering barriers (formal and informal) for project approvals so that high-tech solutions can be rolled out. Lastly, companies with the technology and abilities to execute need access to the energy markets, which in some (most… all?) cases is totally controlled by government monopolies. I guarantee that if the markets were truly open, some company (foreign or domestic) would be happy to step in and build the climate friendly solution.

I know, easier said than done, but in my mind, this is the crux of the problem. There are great (green) technologies in the world whose owners would love the opportunity to roll out in China, but are scared of getting burned. The new climate change program is a good first step, but I fear China’s underlying tone here is more about setting itself up for excuses later.

In response to China’s new climate change program, head of the U.N. Environment Program, Achim Steiner said, “I welcome this step very much … We cannot ask for more at this stage.” I think there is one more thing we can ask for and that’s for China to follow through.