US and China Agree to Action on Climate Change

smogAt this month’s U.S.-China Strategic & Economic Dialogue (S&ED) in Washington, D.C., the two countries agreed to undertake a number of steps to address climate change. This followed an announcement that the two nations will begin formal talks on a high-standard bilateral investment treaty (click here for our earlier report).

In May, the USCIB China Environment Task Force met with the EPA’s Steve Wolfson to discuss coordination and capacity-building between China and the U.S. on climate change, including Secretary of State Kerry’s newly created U.S.-China Climate Change Working Group.

On July 10, the working group presented its report on bilateral cooperation between the two countries. This non-binding climate plan lays out five new action initiatives with the goal of reducing greenhouse gas emissions and air pollution by tackling the largest sources of emissions in both countries, focusing on: vehicle emissions; smart grids; carbon capture, utilization and storage; greenhouse gas data collection and management; and building and industry energy efficiency.

In a fact sheet, the U.S. Department of State released the following details of specific projects and commitments.

  1. Reducing emissions from heavy-duty and other vehicles: Heavy-duty vehicles are the fastest growing source of greenhouse gas emissions from transportation in the U.S. and account for more than half of transportation fuel consumed in China. Light-duty vehicles also contribute significantly to greenhouse gas emissions, fuel use and air pollution. Efforts under this initiative will include advancing comprehensive policies to reduce CO2 and black carbon emissions.
  2. Increasing carbon capture, utilization, and storage (CCUS):
    The U.S. and China account for more than 40 percent of global coal consumption. Emissions from coal combustion in the electric power and industrial sectors can be significantly reduced through CCUS. China and the U.S. will cooperate to overcome barriers by implementing several large-scale, integrated CCUS projects in both countries, which will engage companies in both countries and allow for enhanced trade and commerce.
  3. Increasing energy efficiency in buildings, industry and transport:
    The U.S. and China recognize that there is significant scope for reducing emissions and costs through comprehensive efforts to improve energy efficiency. Both sides commit to intensify their efforts, initially focusing on promoting the energy efficiency of buildings, which account for over 30 percent of energy use in both countries.
  4. Improving greenhouse gas data collection and management:
    Both countries place a high priority on comprehensive, accurate reporting of economy-wide greenhouse gas emissions data to track progress in reducing emissions and to develop and implement mitigation policies. The U.S. will work with China to build capacity for collection and management of greenhouse gas emissions data.
  5. Promoting smart grids: The power sector accounts for over one third of U.S. and Chinese carbon emissions. To reduce greenhouse gas emissions from the power sector and put in place a resilient, low-carbon power grid, both countries will collaborate on developing modern, “smart” grid systems, deploying renewable and clean energy, and improving demand management.

In their joint report, the two parties made clear that this just the beginning of a new phase in U.S.-China cooperation on climate change issues, where the Climate Change Working Group is designed to serve as the new leader in this critical bilateral relationship. Working closely with private sector and non-governmental stakeholders, the working group will develop implementation plans for the following initiatives by October 2013, with the goal of continuing to find new ways to expand cooperation on climate and clean energy issues.

Staff contacts: Norine Kennedy and Justine Badimon

More on USCIB’s Environment Committee

More on USCIB’s China Committee

Staff Contact:   Norine Kennedy

Senior VP, Policy and Global Strategy
Tel: 212.703.5052

Norine Kennedy promotes U.S. business participation in international environmental policy and management initiatives, and works closely with industry, government and NGOs to promote sustainable development and green growth. She also spearheads USCIB’s strategic international engagement initiative, which seeks to advance meaningful business participation and regulatory diplomacy in inter-governmental organizations.
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