Hopeful signs for U.S. and Chinese Cooperation on Climate Change

The past week has offered a thrilling glimpse into the future for the millions of people around the U.S. and across the world who are yearning for real solutions to climate change.  On June 18, Shenzhen, an economically-vibrant city of 15 million on the South China Sea, launched the first of seven Chinese regional pilot carbon market systems slated to begin by the end of 2014.  The Shenzhen market is set include at least 635 local companies that contribute approximately 40% of the city’s CO2 emissions, and is expected to result in a 21% decrease in the carbon intensity of the economy in just two years.  Shenzhen is one of seven carbon trading pilots that represent about 25% of China’s GDP and may include thousands of companies emitting hundreds of millions of tons of CO2.

Inspiration, encouragement and support for Shenzhen’s maiden market launch came from a familiar place:  California.  Both Shenzhen and California have well-established reputations as trailblazers on innovative solutions that match economic growth with environmental gains.  Perhaps it will be little surprise, then, that none other than the state’s top climate change official,  California Air Resources Board (CARB) Chair Mary Nichols and Governor Brown’s personal representative, Wade Crowfoot, stood with senior officials from Shenzhen and from the National Development and Reform Commission (NDRC) at last Tuesday’s launch.  Nichols has presided over the development of California’s groundbreaking climate change effort and oversaw the Fall 2013 launch of California’s carbon market, the first comprehensive state-level system in the U.S.

The California market is a promising model for Shenzhen and the other Chinese pilots.  California has held three allowance auctions to date, with strong participation by companies and a modest increase in the price of allowances with each auction.  Ultimately, California’s carbon market will be a key element driving the state back to 1990 levels of greenhouse gas pollution by 2020, accompanied by dramatic improvements in air quality and significant incentives to carbon-cutting entrepreneurs.  Nichols formalized the partnership between California and Shenzhen by signing a Memorandum of Understanding (MOU) paving the way for technical cooperation between officials and other stakeholders engaged in the respective carbon market programs.

The California-Shenzhen partnership is just the tip of the iceberg in the crescendo of cooperation between the U.S. and China.  Earlier this month in California, President Obama and Chinese President Xi signed an agreement to collectively fight dangerous hydrofluorocarbons (HFCs) that are used in air conditioning and refrigeration.   HFCs are pound-for-pound some the most potent greenhouse gases, and controlling them will be an essential short-term piece of solving the climate change puzzle.

As California and Shenzhen roll up their sleeves to support one another’s ambitious climate change programs, they will provide demonstrable proof of the promise of cooperation between their nations and will deliver results and momentum towards national action.   In her remarks at the Shenzhen launch, Mary Nichols called the leadership of California, Shenzhen, and other provinces, states and cities around the world “a foundation that national and international action can spring from.”

The Chinese carbon trading pilots are strong signals that climate change is an issue to be taken seriously and to be acted on expeditiously.  In the U.S., President Barack Obama takes the stage in Washington tomorrow to lay out his Administration’s vision for bold national action to fight climate change, an eagerly-anticipated outline of how progress will be achieved towards Obama’s 2009 commitment to slash greenhouse gas pollution 17% by 2020.

While 2020 will be an important milestone in charting progress, it is but the beginning of a long journey.  Climate change science couldn’t be clearer about the need to achieve dramatic greenhouse gas reductions by mid-century.  And no long-term solution to the environmental challenge of our lifetime will be found without the leadership of the world’s top greenhouse gas polluters.  That leadership is now coalescing into national and bilateral action and, for the first time in some time, offers hope that we are headed in the right direction.

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