Cooperation Is the Key

Proposal for U.S.-China Collaboration on Climate Technology

    Report: A Roadmap for U.S.-China Collaboration on Carbon Capture and Sequestration (pdf) (Chinese version)

    Fact sheet: Roadmap summary

    The United Nations climate change summit in Copenhagen is less than 35 days away. Nations will negotiate a framework for a successor treaty to the Kyoto Protocol, which expires in 2012. Any successful outcome at Copenhagen will require a commitment from the world’s major economies, not least of which are China and the United States, the two largest emitters of greenhouse gases and two largest consumers of energy. The Center for American Progress launches today a new report with the Asia Society, “A Roadmap for U.S.-China Collaboration on Carbon Capture and Sequestration,” which sets out a detailed plan for how these two countries can mutually benefit from working together to achieve greater emissions reductions than they can alone.

    Recent history makes clear the importance of these two countries working together. The past decade of unprecedented economic expansion has helped China lift millions out of poverty, but not without consequence to its environment and emissions profile. The past eight years in the United States have been marked by the conspicuous absence of climate policy at the federal level and a lack of participation in any international climate agreement. Both countries are also representative of the antagonism that still dominates much of the current discussion over forging a new U.N. climate treaty. The U.S. Senate has previously expressed its opposition to joining any agreement that does not include major developing countries such as China; China has insisted that Western countries take responsibility for a problem that they caused and provide assistance for developing countries in the form of finance and technology to move them toward a low-carbon pathway.

    Yet both countries have an unprecedented opportunity to move beyond this impasse. There has been a sea change in Chinese leadership on climate change during the past few years. China is now embarking on some of the world’s most aggressive energy efficiency, renewable energy, and forestry projects. The recent change in presidential leadership in the United States has heralded a fundamental shift in climate policy, with President Barack Obama laying the foundation for a domestic transition to a clean energy economy in his initial economic stimulus package. This was quickly followed by passage of the first comprehensive climate and energy legislation in the House of Representatives. Both countries have emerged as active and productive participants in the international negotiating process in the U.N. Framework Convention on Climate Change and leaders in smaller rounds of negotiations in the G-8, G-20, and Major Economies Forum.

    A series of recent developments have raised the prospects of more concrete U.S.-China cooperation on climate change, including U.S. Energy Secretary Steven Chu’s visit to China that resulted in the announcement of a joint U.S.-China clean energy research center, declarations at the Major Economies Forum on Energy and Climate after the last G-8 summit in Italy in July, and a Memorandum of Understanding on energy and climate signed later in the month at the U.S.-China Strategic and Economic Dialogue in Washington, D.C.

    President Obama is preparing to leave next week for the U.S.-China summit in Beijing, and the time has never been more ripe for the launch of a commitment between both countries to embark on a collaboration on clean energy that will not only benefit China and the United States, but also have a galvanizing effect for the rest of the world to move towards a successful outcome in Copenhagen.

    The July Memorandum of Understanding from the Strategic and Economic Dialogue identifies 10 specific areas for cooperation between the United States and China on low-carbon technology and climate change, including energy efficiency, electric cars, and carbon capture and sequestration. General declarations of goodwill are a necessary step for cooperation, but the upcoming summit must put meat on these bones and focus on specific proposals for collaboration. Our aim in this new report is to provide just such a proposal for discussion and as the basis for action.

    All of the areas for low-carbon and clean-energy cooperation identified in the July U.S.-China MOU must be pursued. Nothing in our report should be interpreted as suggesting that any one of these is more important than any other. There is a compelling argument, however, that neither country can achieve the emissions reductions it needs to make without addressing its heavy reliance on coal. For this reason, Secretary Chu issued on October 12 a “call to action” on CCS, advocating widespread, affordable deployment of this technology.

    CCS is a process that separates and captures carbon dioxide from large point sources such as coal power plants and stores it away from the atmosphere by several means, including underground sequestration in geological formations. Our proposal for U.S.-China collaboration on CCS technology answers this call by helping to prove, or not, the feasibility of this technology as part of the solution to climate change.

    We identify three areas of collaboration for the United States and China in the development of CCS technologies in the short, medium, and long-term, navigating potential political, technological, financial, and regulatory hurdles.

    1. Cooperation on sequestration pure CO2 streams from existing Chinese industrial plants. There are now approximately 100 facilities throughout China producing pure streams of CO2 for various industrial purposes. This climate pollution is vented unabated into the atmosphere where it contributes to global warming. China also has a large documented geological storage capacity, consisting mostly of deep saline formations. A first step to mitigate these emissions can be to jointly fund five geological sequestration projects that can easily capture this source of carbon and store 2 million to 3 million tons of CO2 per year. Each project would cost $50 million to 100 million, with of the United States contributing $20 million to 40 million. Together these sites could sequester 10 million to 15 million tons of CO2 per year, equivalent to taking 1.7 million to 2.5 million cars off the road.

    2. Invest in research and development for retrofitting existing power plants. Much attention has been placed in both countries on producing a new generation of integrated coal-fired electricity plants which combine power production, capture of CO2 and sequestration. But both countries will have to maintain huge fleets of traditional plants in the short- to medium-term that will have to be retrofitted later for capture and sequestration. China and the United States should therefore develop a strategy for research, development and deployment of a series of pilot facilities for CCS retrofits for existing coal power plants under the auspices of the already planned U.S.-China joint clean energy research center.

    3. Catalyze markets for CCS. China and the United States will have to mobilize private capital to fund the plants envisioned in step two by investing public funds and stimulating public-private partnerships. This focuses on developing financial incentives for companies to invest in cooperation initially through government-backed public finance structures that serve as a bridge to market mechanisms such as a carbon offset regime that includes proven CCS facilities and the creation of a global market for carbon abatement.

    Cooperation in these three areas could accelerate CCS deployment in the United States by five to 10 years. This would deliver immense gains for U.S. job creation and consumer savings and more than compensate for American investment in this roadmap. Under a business-as-usual scenario, a proven CCS sector would create 127,000 jobs in the United States by 2022, including jobs in equipment manufacturing and infrastructure construction. A five-year acceleration of CCS deployment as a result of U.S.-China collaboration increases that figure to 430,000. A 10-year acceleration in deployment could create as many as 940,000 new U.S. jobs by 2022. Collaboration will also quickly help lower the cost of CSS, and such savings will be passed along to electricity consumers. A five-year acceleration of CCS deployment in the United States would lead to $5 billion in savings, and a 10-year acceleration would lead to $18 billion in savings.

    Cooperation between the United States and China on this roadmap would also serve as an example of a specific bilateral step that the two countries could take together on climate change for mutual benefit. Our hope is that the recommendations contained here have the potential to contribute to—in the words of Presidents Hu and Obama—a “positive, cooperative and comprehensive” Sino-American relationship for the 21st century. Such a relationship could become the cornerstone for a new era of greater cooperation between developed and developing countries overall on finding solutions to climate change by setting an example that could be emulated and duplicated many times over.

    Report: A Roadmap for U.S.-China Collaboration on Carbon Capture and Sequestration (pdf) (Chinese version)

    Fact sheet: Roadmap summary