Transcript The Two Giants: Energy Policy in China and the United States

The Two Giants: Energy Policy in
China and the United States
Energy System - China
China’s boom
• Average annual growth
rate 2000-10: 10%
• From 1990 to 2009,
moved from net
exporter of oil to
world’s second largest
net importer
• World’s largest
producer and consumer
of coal –46% world’s
coal consumption
Projected to be top importer by 2014
Electricity system - China
China - Coal
Economy size
• US 16 trillion
• China 12 trillion and gaining
• Population
– US: 316 million
– China 1.4 billion
Oil, Coal consumption – US v China
coal
• US 2012 – 0.9 billion short
tons (declining)
• China 2012 – 4.0 billion
short tons (rising)
oil
• US 2013 – 18.9 million bpd
• China 2013 – 10.7 million
bpd
Renewable share in electricity
– US v China
China 2012
• Hydro –
– 22% capacity
• Other renewables
– 6.2% capacity
US 2013
• Hydro
– 6.6% energy
– 7.4% capacity (summer 2012)
• Other renewables
– 6.2% energy
– 7.2% capacity (summer 2012)
Growing share of global GHGs
China still modest per capita
Gilley: Authoritarian vs. Democratic
Environmentalism
• Authoritarian –concentrates authority in few
executive agencies manned by capable and
uncorrupt elites seeking to improve
environmental outcomes
• Democratic--spreads authority over several
levels and agencies of government, including
representative legislatures, and that
encourages direct public participation from a
wide cross-section of society
Gilley: Authoritarian Environmentalism
in China
• “Citizen participation is limited to learning
and obeying state policies.” p. 291
“A Renewable Energy Law was completed in
2004 after fewer than nine months of drafting
and then passed into law with no amendments
by an unelected national legislature in 2005”
p. 290
China – National Oil Companies
• China National Petroleum Corporation (CNPC) leading upstream player in China
– publicly-listed arm PetroChina,
– together account for roughly 60 % domestic oil and
80% natural gas output
• China Petroleum and Chemical Corporation
(Sinopec)
– downstream activities (refining and distribution)
• China National Offshore Oil Corporation
(CNOOC): offshore oil exploration and production
China GHG policy
• Reduce emission intensity of GDP 40-45% by
2020 (over 2005 levels)
• At Durban , China agreed to negotiate a legally
binding treaty (including the possibility of an
absolute emission cap) by 2020
Does authoritarian work?
• Can produce a rapid response to problem
• But if fragmentation remains, can undermine
implementation due to illegitimacy
– Federalism issues
• Low social concern makes authoritarianism
more necessary and more difficult
US Energy Policy
• US energy system
• Institutions
• Policy
US energy system 2012
US energy system
US energy system
US GHG emissions at 1996 levels
Further reading: Is US on track to meet 2020 climate goal?
Energy emissions – 2013 is 10% below 2005
US governance
• Federalism: gives extensive powers to 50
states
• Separation of powers
– Congress
• 2 equal chambers
• House – 435 seat elected every 2 years
• Senate – 2 seats per state elected every 6 years
– President – elected separately every 4 years
– Courts
US governance:
extraordinary majorities
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House: 50% +1
Senate: effective majority is 60%
Treaties: 2/3rd of Senate requires
President needs to sign laws passed by
Congress
• If president vetos, 2/3rd of both houses can
overturn
US governance:
extraordinary majorities
Congress and president same party: working
majority is 60%
Congress and president different party: working
majority is 67%
Note contrast to Canada, China
Party Balance in Congress - Obama
• 2009-10 House and Senate Democratic
• 2011-2016 House Republican, Senate
Democratic
• Current Senate: 46 D – 54 R
• Current House: 188 D – 245 R
US energy policy history
• 1973 oil shock prompted
– Creation of Department of Energy 1977
– Strategic Petroleum Reserve
– Corporate Average Fuel Economy Standards
• Every president developed a plan but little
coherence
2013 Inaugural: We will respond to the
threat of climate change, knowing that the
failure to do so would betray our children
and future generations.
The path towards sustainable energy sources will be long and sometimes
difficult. But America cannot resist this transition, we must lead it. We
cannot cede to other nations the technology that will power new jobs and
new industries, we must claim its promise. That’s how we will maintain our
economic vitality and our national treasure -- our forests and waterways, our
crop lands and snow-capped peaks. That is how we will preserve our planet,
commanded to our care by God. That’s what will lend meaning to the creed
our fathers once declared.
Climate Legislation - federal
• 2009 – House passes Waxman-Markey
– 17% reduction by 2020
– Riddled with concessions
• 2010 Senate
– Coalition building required giving everything away
– Coalition of senators fell apart when initiative got
framed as “gas tax”
– “on climate change, Obama grew timid and gave up,
leaving the dysfunctional Senate to figure out the
issue on its own”
• Personal impact
Obama agenda
• Try Congress first – cap and trade
• Use administration action if that fails
– Core focus on auto standards
– Emerging focus on coal
• Strong standards on new plants
– New coal plants essentially off the table
• Clean Power Plan: Proposed regulation for existing
plants
– 30% below 2005 levels by 2030
– very controversial
Automobile efficiency standards
• 2001 – US cars and trucks averaged 24.7
m.p.g.
• 2011 --29.6 m.p.g.
• New regs: up to 55 m.p.g. by 2025
• Feb 2014: announced intention for new heavy
duty vehicle standards
Sustainable Energy Policy
36
State initiatives: renewables
• As of early 2014, 38 states have RPS or
Alternative Energy Portfolio Standards;
another six have voluntary standards (source)
• California most aggressive – 33% by 2020
State initiatives - GHG
• California leadership
– 1990 levels by 2020 (30% reduction)
– 80% below 1990 levels by 2050
– Cap and trade program now in place
Reflections on Two Giants
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Global leaders in power, energy, emissions
2/5 of global GHG emission
Different stages on carbon path
Chinese growth core driving force
– emission intensity: >factor of 2 difference
• Starkly different political systems
• If they cooperated, enormous change possible
• Prospects for meaningful cooperation?
U.S.-China Joint Announcement on Climate
Change and Clean Energy Cooperation
November 2014
US
• New climate target 2628 percent below 2005
levels by 2025
China:
• peak CO2 emissions
around 2030, with the
intention to try to peak
early
• increase the non-fossil
fuel share of all energy
to around 20 percent by
2030