A Team of Rivals: The United States and China on Energy

Coal is the largest single driver of global warming, and the United States and China are the biggest drivers of coal. How our two nations address this issue will determine how successful we are in tackling climate change. Fortunately, recent evidence of a willingness to jointly develop and deploy new technologies that reduce carbon emissions offers real hope.

The United States and China -- the largest developed economy and the largest emerging one -- are together responsible for half of the world's carbon dioxide emissions. Coal accounts for more than 40 percent of all energy-related CO2 emissions worldwide, and its use is projected to double in the next 30 years.

Because coal is relatively cheap and abundant, especially in developing countries, it is unrealistic to think that it will "go away." China has recently been building new coal power plants at the rate of 70-100 GW per year and has developed about 400 GW of new coal-generation capacity since the beginning of 2004. That's about 25 percent more capacity than all of the U.S. coal power plants combined (which took 60 years to build).

While China is rapidly becoming a world leader in producing solar and wind energy technologies, it will continue to depend on coal (currently used to produce 80 percent of its electricity) for the vast majority of its electricity needs for decades to come. The United States, whose economy is not growing as rapidly as China's, still gets 50% of its electricity from coal. This is a big two-nation problem, and neither will solve it alone.

That's where a lot of recent commentary gets it wrong. Some, opposing any U.S. climate commitments, argue that China's growing number of coal plants make U.S. efforts meaningless. Others argue that China will surpass the U.S. in green energy quickly, and, therefore, the U.S. needs to mobilize its own green efforts in order to beat China to the game and grab the green jobs.

The problem is more nuanced, however, and the solution more hopeful -- with the potential for a win-win. When it comes to green energy technology development, the United States and China are not just rivals; they are also natural allies and partners, with complementary strengths. Both countries have excellent innovative capability; China has available capital and an ability to quickly scale up technology applications, and the U.S. has unique technical expertise in areas ranging from carbon capture to advanced materials.

Fortunately, a number of innovative U.S. and Chinese companies are leading the way and highlighting the potential of collaborative enterprises. Houston-based Future Fuels has licensed advanced coal gasification technology (which makes carbon capture and storage easier) from China's Thermal Power Research Institute. Synthesis Energy Systems, also from Houston, is commercializing its own cutting-edge gasification technology in China in partnership with Chinese energy companies.

Last month, Charlotte-based Duke Energy, the third-largest utility in the United States, announced an agreement with China Huaneng Group, the largest utility in China, to support the development of cleaner energy technologies. Both companies have emerged as leaders in the development of integrated coal gasification combined cycle (IGCC) plants, which - with carbon capture and sequestration - can dramatically reduce emissions of CO2 and conventional air pollutants. Huaneng is also pioneering the development and deployment of post-combustion capture systems that will be essential to decarbonizing the thousands of coal-fired power plants that will continue to operate for decades in China, India, the United States, and elsewhere.

This agreement puts both companies on a path toward mutual development and deployment of technologies and systems absolutely critical to reducing CO2 from power production around the world. In addition, the companies will explore opportunities to jointly develop renewable energy power generation including wind, biomass, and solar.

Commercial agreements like this one are crucial because they advance needed low-carbon technology quickly and they build trust needed for future bolder steps between the two countries. That's why President Barack Obama should use the Duke-Huaneng agreement as a template for U.S.-China cooperation.

President Obama has clearly recognized the importance of greater cooperation with China in reducing carbon emissions. Energy and climate were focal points at the recent Strategic and Economic Dialogue with China in Washington, DC. Top aides to the president are now engaged in discussions with their Chinese counterparts in advance of the December global climate negotiations in Copenhagen.

Building on that, the two nations should establish a joint action plan aimed at increasing both public and private investments in carbon-storage projects. The plan should:
  • Increase Chinese investment in U.S. projects to reduce coal's carbon emissions;
  • Transfer key carbon-control technologies between the two countries;
  • Increase U.S. investment in future Chinese geologic sequestration sites, and
  • Facilitate joint ventures between U.S. and Chinese companies to develop low-carbon coal projects around the world.
Further cooperation between the United States and China in coal and other green technology areas, such as transportation, renewable energy and grid management, offers the greatest potential for rapidly reducing global carbon emissions. Both governments should encourage, with proper oversight, more innovative partnerships between U.S. and Chinese energy companies. Doing so will offer real promise for the near-term reduction of carbon emissions that is so crucial to reversing global warming.

The author is executive director of the Clean Air Task Force, an environmental organization advancing clean technology in the United States and China.