Will China Have Cap and Trade Before the US?

ChinaFlagGreenUnderlying anxiety over China’s rapid economic advance, including its aggressive moves into clean technology, is an ideological uncertainty: is the Chinese system of government, which is non-democratic, but seemingly capable of moving quickly and unilaterally, fundamentally better than our messy democratic system that sometimes (all of the time?) hobbles its effectiveness with political bickering?

Now there is talk that China could announce a national cap and trade scheme as early as the Copenhagen climate talks in December, leapfrogging over the US.

Meanwhile, Washington’s version of cap and trade, a system to reduce pollution by capping emissions and trading emissions credits on an open market, has been declared DOA at least until next year, a victim of prolonged squabbling over health care and general political malaise.

Informed Speculation

Philippe Chauvancy, director of sales at Bluenext, a Paris-based environmental credits exchange, said during a panel discussion at the London Carbon Show that “China will have a cap-and-trade scheme before the US and we will hear some statement from China on this at Copenhagen.” From Risk.net:

“I do see room for a cap-and-trade scheme in the US but China has been investing heavily. It has the money, the people and the resources, and it will do something,” Chauvancy said.

The Bluenext Exchange announced on September 24 an agreement with the Beijing municipal government to establish a carbon trading standard. The move is seen as “the first step towards a voluntary system to limit emissions domestically in China,” according to a Bluenext press release (PDF).

Others on the Carbon Show panel disagreed with Chauvancy’s prediction, but there was agreement that China has the political will to act, and act forcefully and quickly. At the same time, the panelists noted the political morass in the US Congress put cap and trade here in doubt.

The Economy, Stupid

Before bemoaning one more benchmark at which the Chinese are beating us, it is important to note the risk of imposing a carbon emissions cap on an emerging economy, a risk the ruling Communist party is undoubtedly figuring into its calculations: that it will hamper growth.

China has the same fears as many in the US when it comes to limiting pollution: that such controls will slow economic growth. Each year, tens of millions of poor rural Chinese pour into the cities looking for work. Without a high rate of growth to provide these men and women with jobs, the state risks political upheaval.

There are many reasons China’s government is so vulnerable to instability. The biggest? It is not democratic.

BC (Ben) Upham is a freelance writer based in Los Angeles. He has written for the New York Times, and was a writer and editor for News Communications, Inc., a local paper consortium serving Manhattan. When he's not blogging on green issues -- and especially renewable energy -- he's hiking in the Angeles Mountains or hanging out at El Matador.