October 12th, 2011

Speakers

Executive Director of Strategy, China Light and Power Group

Professor of Law

Attorney, Wilson Sonsini Goodrich & Rosati

Description 

China exerts an inescapable gravitation pull on the climate and energy debate – its economic growth is so brisk, its emissions so copious that no call for action on climate change can ignore the country. The four China watchers gathered at Climate One on October 12 debated the motives for, and the implications of, China’s domestic climate action, particularly its abundant clean energy investments.

Stephen Leeb, co-author, Red Alert: How China’s Growing Prosperity Threatens the American Way of Life, patched in via video conference from New York City, was the panel’s contrarian. “I don’t think China does anything with the world’s interest at hand; I think they do everything with China’s interest at hand. Climate change is very much a mixed bag for them. Much more important to them is the issue of resource scarcity” – that is, securing ample supply of oil, coal, and water.

Leeb was suspicious of the intent of China’s renewable energy investments. China, he said, aims to control the solar market – of which they already have a 45 percent share – to the detriment of foreign players, including the United States. “Solyndra was a red herring. There may have been fraud there, but basically they could not compete with China.” Of another bankrupt U.S. solar firm, Evergreen Solar, Leeb said: “that has nothing to do with fraud, and everything to do with China underbidding.”

Julian Wong, an attorney with Wilson Sonsini Goodrich & Rosati, and a former advisor to the U.S. Department of Energy, agreed with Leeb, up to a point. Yes, energy is a pivotal issue in China’s economic growth, he said, and scarcity issues are “high in the minds of China’s leaders.”

“Security is certainly one reason to invest in alternative energy,” he said, “but another reason in the broader context of China’s economic development is moving toward advanced manufacturing, high technology, diversifying away from labor-intensive industries to more knowledge-intensive industries.”

He also cited the increasing importance of environmental protection in preventing unrest. “Ultimately, this Communist Party is in power as long as the people allow it to be. If you are getting protests by citizens, by residents, on very fundamental needs, that’s going to get the attention of leaders.”

Alex Wang, a visiting professor at the UC Berkeley School of Law, recently returned from the Natural Resources Defense Council’s office in Beijing, emphasized the importance of the environmental protest movement, citing events this summer at a chemical plant in the city of Dalian and at facilities operated by Jinko Solar. “People are getting more wealthy. They are getting better educated about environmental issues, and they realize that is impacting their health, their children’s health,” he said.

“The positive side of it is that the government has been responding, particularly to the accidents and the most severe incidents that have driven people to the streets. The negative side of that is that often they wait until a problem reaches the threshold of instability that something is done.”

Peter Greenwood, Executive Director of Strategy, China Light and Power Group, agreed that the specter of unrest fomented by pollution has the attention Chinese leadership. “They have a genuine awareness of the importance of preserving China’s natural environment – in part, to preserve China’s ability to feed itself, and, in part, to preserve a way of life, social stability, and prosperity in the rural areas.”

But, he added, China does so on its own terms. Because of the primacy of prosperity and sovereignty to China’s leaders, they display “an overwhelming preference for national measures to tackle environmental problems as opposed to subordination to international architecture.”

This is reflected, he said, in China’s posture at the international climate talks and in its support for renewable energy. “There was a notion that if Copenhagen failed the drive to cleaner energy, the drive to tackle carbon emissions, notably from power generation, would fall away,” he went on. “On the contrary, we’ve seen post-Copenhagen, in China, an acceleration of the drive towards clean energy.”

Counter to Stephen Leeb, Greenwood said we should vaunt not vilify China’s investments in wind and solar. “It’s not actually, necessarily, a bad story for the rest of the world. Wind turbine prices have fallen in the last couple of years by about 20 percent. A lot of that is due to the efficiency and scale of Chinese manufacturing,” he said.

“What does that do? It means that wind projects that were previously uneconomical become economical. Sites that were previously not feasible become feasible. Subsidies that might otherwise have to be paid by Western and other governments can perhaps operate at lower levels. That’s a beneficial story.”

 

– Justin Gerdes
October 12, 2011
Photos by Sonya Abrams
The Commonwealth Club of California