Can China Do Transparency?

Those Who Have Intimate Experience with China Have Varying Opinions

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Reporting from Copenhagen

U.S. Secretary of State Hilary Clinton tossed the ball into China’s court during a press conference this morning by quoting a Chinese proverb: “When you are in a common boat, you have to cross the river peacefully together.”

Those who know Chinese proverbs said she did so intentionally to “publicly put China on the spot.” Clinton’s statement concluded by stressing the need to come to an agreement on transparency.

This afternoon, China tossed the ball away, intimating that it would not play the United States’ game.

Vice Minister of Foreign Affairs He Yafei agrees that transparency is necessary and said China would fulfill its emissions targets in a transparent manner consistent with respect for national sovereignty and with the UNFCCC and the Kyoto Protocol and Bali roadmaps — international regimes the U.S. has agreed to.

The key question is whether, left to its own devices and agreeing to continue reporting to the UNFCCC, China can do transparency and if its data can be trusted.

Those who have intimate experience with China have varying opinions. The U.S. has a history of accusing China of jiggery-pokery with its numbers on GDP, currency value, and oil consumption.

The Climate Group China’s Changhua Wu says China currently does not have the full infrastructure or capacity to adequately and accurately report its emissions. China does have the basic infrastructure for energy efficiency reporting in the form of software and human capacity. She says that while China has implemented an environmental monitoring system that focuses on pollution, that system is concentrated in only government-owned Enterprises, which means that more than half the economy, companies in the emerging private sector, are not yet reporting.

“What I hope to see is that the U.S. and China will work together to share expertise and resources and build capacity,” Wu says. But, she emphasizes, that doesn’t mean that China should submit to mandatory international monitoring.

Wu says the U.S. is using the negotiations to turn attention away from itself: “This is a negotiation and U.S. is in difficult situation, difficult domestic political situation. They have to find someone else to blame which I don’t like to see at all.”

Yanli Hou of WWF China disagrees. She says there is room for improvement and some capacity building in Chinese infrastructure, but that the basic infrastructure present is more than enough to go forward with.

“If I am the delegate, I would suggest to have capacity building support from the developed countries,” Hou says. Reporting, she says, should be left to China at the national level.

Every year, the National People’s Congress assesses China’s progress on its five-year plans, the results of which are published with the media, Hou explains. “The fundamental issue” is China’s conformity to standardized metrics for measuring emissions and carbon reductions, she says. Doing so will increase trust and bring transparency that China desires.

Hou suggests that developed countries help China with methodology and best practices, which is precisely the arrangement that China and the U.S. have already made under several bilateral agreements. The joint announcement for a China-U.S. Clean Technology Research Center and various other partnerships and plans is set up that way, as are provincial agreements, for example the framework agreement for strategic cooperation on climate change between California and Jiangsu province. In Hou’s view, more stringent regulation isn’t necessary.

According to Anthony Hobley, a Partner at Norton Rose LLP, the key phrase, repeated over and over by developed and developing countries, including China, as justification for their positions is “common but differentiated responsibilities.”

The phrase refers to historic levels of emissions and ability to do something about emissions now. For developing countries it means “that you demonstrate that you can live in a carbon-constrained world and your economy doesn’t collapse.” This means doing NAMAs, Nationally Appropriate Mitigation Actions.

The process by which NAMAs are verified under the current legal agreements of Kyoto, Bali and the UNFCCC is with “national communications” which are more “detailed and onerous” for Annex 1 (developed countries, broadly) and less so for developing countries. (The U.S. never ratified Kyoto but agreed under Bali to the Longterm Cooperative Action, which was designed specifically to bring the US into an international agreement on Climate Change.)

National Communications are reports that must be submitted yearly on all the measures a country has in place to reduce its emissions. For Annex 1 countries, the communications include an annual inventory to show how the country is meeting its obligations. Under Kyoto, the current period, and likely the next period (after 2012), Hobley explains, that means developed countries take primary responsibility for emissions cuts.

“National communications” China has agreed to. In a press conference this evening, Vice Minister of Foreign Affairs He Yafei spoke slowly, relaying a message from Premier Wen Jaibao outlining a regime under which China would agree to transparency:

“China’s government will, in the national economic and social development plan, have a category for the reduction of carbon intensity of carbon emissions. It will also formulate correspondingly statistical monitoring and verification regime inside China that is legally binding in China. And we promise to make our actions transparent.

“We promise the implementation of these actions will be under the supervision monitoring of the law and by the media. We are willing to enhance and improve the ways of national communication. The purpose is to enhance transparency. We are also willing to have explanations of clarifications if need be. We will also consider in terms of mitigation actions international exchange dialogue and cooperation that is not intrusive that does not infringe upon China’s sovereignty.”

Hobley says that China’s legal regime has improved greatly in recent years. In his experience, he says, “people are getting more and more confidence in the courts and their ability to enforce agreements.” He also mentions China’s five-year programs as a metric of the country’s ability to follow through on renewable and energy efficiency targets.

“They do take the issue [climate change] very seriously,” Hobley said. That may be because China understands that “if they are to sustain their economic development, it has to be more energy efficient.”

The Carbon Disclosure Project has also seen increasing participation by Chinese Firms in recent years in the project’s voluntary reporting projects. Currently, 25 Chinese companies have responded to CDP’s investor and supply-chain requests to report their emissions, says CDP communications and corporate partnership director Joanna Lee. She expects this number to “increase significantly” in the near future.

China is absolutely capable of transparency, Lee says.

“There is a huge amount of data collected in China,” she says, and it has increased in the last few years. “I was in China a few weeks ago, and it’s striking how advanced the understanding of climate change is.”

Lee says she has little doubt that China is domestically committed to reducing its carbon intensity because there is “clear recognition of cost saving opportunities and providing clean tech solutions.”

In Hou’s judgement,

“We should trust, because so far the main problem with this negotiation process is trust.”

“It is a trust issue with developed countries to developing countries and even from the developing countries to the developed countries. And here for the transparency of China is the target implementation for the future, I would say let’s trust first.”


See also:

Shanghai to Pilot China’s First Municipal Emissions Exchange

ICET Piloting Voluntary Climate Registry in Southern China

Is China Still a Developing Country?

China’s Entrepreneurs Are Ready, But Is Their Government?

China’s Smart Grid Ambitions Could Open Door to US-China Cooperation

China Sets 2020 Emissions Target in Interest of National Security


(Photo: Ann Danylkiw)