The Clean Development Mechanism in China: Assessing the Tension Between Development and Curbing Antrhopogrenic Climate Change
By John Sautter
INTRODUCTION
The Earth is getting warmer. There is little debate in the scientific community that greenhouse gases (GHGs) are the primary cause of this global warming. The warming of the Earth's atmosphere in the coming decades threatens to produce a rise in sea level, severe flooding, extended periods of drought, and an increase in the spread of deadly diseases. This is a global problem that must be met with an international strategy to decrease the amount of GHGs in the atmosphere.
Solving global warming requires a twofold solution. On one hand, humankind must have the ability to continue to progress. Any solution must recognize the right of all countries to expand *92 their economies and societies. On the other hand, such development requires the expenditure of large amounts of energy that releases GHGs into the atmosphere. Thus, the global conundrum is how the international community can limit the emissions of GHGs while still guaranteeing the right to development.
Nowhere in the world is the tension between development and climate change more apparent than in China. China recently became the world's largest emitter of GHGs. If China's Gross Domestic Product is converted into U.S. dollars using market exchange rates, it has the fourth largest economy in the world. Its economy grew at an estimated 11.3 percent in 2007 and 10.8 percent in 2008. In order to fuel its ongoing economic growth, China has been building coal-fired power plants to supply electricity to its many cities and factories. Compared to other fuel sources, coal is cheap and dirty; cheap because it abundant, and dirty because of the large of amount of polluting emissions released by burning coal. To continue its economic growth, China needs to burn more coal, but doing so will contribute to climate change by releasing millions of tons of GHGs into the atmosphere. How can China both continue its economic growth and curb its greenhouse gas emissions under the Kyoto Protocol?
In order to meet these challenges, the Kyoto Protocol created the Clean Development Mechanism (CDM). The CDM program is a compromise between the two important goals of development and curbing anthropogenic climate change. The mechanism has three main aims: (1) to promote sustainable development in the country that is hosting the CDM project, (2) to limit greenhouse gas emissions across the world, and (3) to assist developed countries in meeting their GHG reduction obligations under the Kyoto Protocol.
The aim of this Note is to give a candid assessment of the effectiveness of the CDM program in China. In particular, this analysis will investigate how effective Chinese CDM projects have been in meeting the three goals spelled out in the Kyoto Protocol. Some of the current and proposed CDM projects in China have been successful at meeting these goals. However, a large proportion of these projects are not accomplishing any of these aspirations. These projects are taking advantage of loopholes in the CDM program to make money without contributing to the aims specified under the Kyoto framework. Some projects may even exacerbate the tradeoff between sustainable economic development and the curbing of greenhouse gases.
This Note is organized into four main sections. In Section II, I outline the CDM framework within the context of the Kyoto Protocol. Next, in Section III, I consider the implementation of the CDM program in China and how the government has administered different facets of the program. Section IV covers some of the most glaring and controversial outcomes of the CDM program in China. Finally, in Section V, I put forward policy alternatives to some of the problems with CDM projects in China.
The Earth is getting warmer. There is little debate in the scientific community that greenhouse gases (GHGs) are the primary cause of this global warming. The warming of the Earth's atmosphere in the coming decades threatens to produce a rise in sea level, severe flooding, extended periods of drought, and an increase in the spread of deadly diseases. This is a global problem that must be met with an international strategy to decrease the amount of GHGs in the atmosphere.
Solving global warming requires a twofold solution. On one hand, humankind must have the ability to continue to progress. Any solution must recognize the right of all countries to expand *92 their economies and societies. On the other hand, such development requires the expenditure of large amounts of energy that releases GHGs into the atmosphere. Thus, the global conundrum is how the international community can limit the emissions of GHGs while still guaranteeing the right to development.
Nowhere in the world is the tension between development and climate change more apparent than in China. China recently became the world's largest emitter of GHGs. If China's Gross Domestic Product is converted into U.S. dollars using market exchange rates, it has the fourth largest economy in the world. Its economy grew at an estimated 11.3 percent in 2007 and 10.8 percent in 2008. In order to fuel its ongoing economic growth, China has been building coal-fired power plants to supply electricity to its many cities and factories. Compared to other fuel sources, coal is cheap and dirty; cheap because it abundant, and dirty because of the large of amount of polluting emissions released by burning coal. To continue its economic growth, China needs to burn more coal, but doing so will contribute to climate change by releasing millions of tons of GHGs into the atmosphere. How can China both continue its economic growth and curb its greenhouse gas emissions under the Kyoto Protocol?
In order to meet these challenges, the Kyoto Protocol created the Clean Development Mechanism (CDM). The CDM program is a compromise between the two important goals of development and curbing anthropogenic climate change. The mechanism has three main aims: (1) to promote sustainable development in the country that is hosting the CDM project, (2) to limit greenhouse gas emissions across the world, and (3) to assist developed countries in meeting their GHG reduction obligations under the Kyoto Protocol.
The aim of this Note is to give a candid assessment of the effectiveness of the CDM program in China. In particular, this analysis will investigate how effective Chinese CDM projects have been in meeting the three goals spelled out in the Kyoto Protocol. Some of the current and proposed CDM projects in China have been successful at meeting these goals. However, a large proportion of these projects are not accomplishing any of these aspirations. These projects are taking advantage of loopholes in the CDM program to make money without contributing to the aims specified under the Kyoto framework. Some projects may even exacerbate the tradeoff between sustainable economic development and the curbing of greenhouse gases.
This Note is organized into four main sections. In Section II, I outline the CDM framework within the context of the Kyoto Protocol. Next, in Section III, I consider the implementation of the CDM program in China and how the government has administered different facets of the program. Section IV covers some of the most glaring and controversial outcomes of the CDM program in China. Finally, in Section V, I put forward policy alternatives to some of the problems with CDM projects in China.
