China: Going for the Green Gold

After having spent four days in the country with the highest CO₂ emissions in the world, I'm strangely optimistic.

China builds a coal-fired power plant or two every week. My hotel is a modern block of glass, metal, and marble, yet a cold November wind blows through the poorly insulated windows. A booming economy means growing emissions for years to come.

But things are moving forward in the People's Republic – if you look beyond the conventional wisdom.

At our Business Roundtable, held Tuesday, November 11, Ms. Li Xiaolin, one of the Councillors of Copenhagen Climate Council, said: 

"Chinese business leaders recognize that sustainable development is a corporate responsibility and that the need for creating economic growth in China should meet the needs of sound environment protection. I encourage all industries to respond and to collaborate –  hand in hand – on tackling the challenge. I want to make sure that our children can live on a beautiful planet with blue sky and clean air. We are dedicated to this."

This might sound very standard, but it is not in China. And Li is not just any Chinese corporate leader. She is chairwoman of China Power International, one of China's five biggest energy providers. She is one of the most well-known business leaders in China – and a national celebrity, being the daughter of former Premier Li Peng. And when she says "corporate social responsibility," she means business – and so do her peers.

We heard the same language from other Chinese companies. China Mobile, CNOOC, Swire, and EverBright International – all of them giants. They are clearly beginning to see the opportunities, not just the risks. They are examples of what looks like a trend. While many have heard about the two power plants a week, few know that China is today the country in the world with the most installed renewable capacity, a world leader in solar and wind power. Most U.S. cars would be illegal in China because of emissions restrictions that are stronger than those in Europe or the United States.

The government is pushing the agenda agressively – and this usually means it will be achieved. The target for renewables is 15% of total electricity production in 12 years time (that's more ambitious than even Obama's target of 25% of electricity in 2025) and energy efficiency must increase by 20% (energy consumption per unit GDP) in two years. Remember, this is a developing country with hundreds of millions of citizens living on one U.S. dollar a day.

Things are moving

The Copenhagen Climate Council also met with Mr. Xie Zhenhua, Vice Chairman of the NDRC (National Development and Reform Commission), the powerful ministry for industry and energy. Xie is a key figure in Chinese climate politics, representing his country in international negotiations, and a very precise communicator. He made it perfectly clear that of course China isn't going to commit to anything before the United States, Europe, and Japan have taken the lead and established a track record of paying off the CO₂ debt – for which no one can blame him (U.S. per capita emissions are still five times higher than China's).

But think of the implications of this: Xie is a high-level negotiator, and is obviously very aware that COP15 is approaching. He recognizes its significance. He will not give anything away a year from Copenhagen, but he is, at the same time, very careful in his choice of words in front of a high-level delegation of international business leaders, stressing that China is taking part in the process and is very active, putting forward proposals on tech transfer, for example – which hasn't always been the case (as with a lot of other key countries). In other words, We won't go first. But the door is not closed.

Remember Bali last year: Chinese politicians surprised everybody with sudden engagement in reaching a solution. "They even surprised themselves," a key Chinese source told us yesterday.

Things are moving. If they move quickly enough for a success in Copenhagen, we will not know until the very last minute. No doubt it is still very much uphill. But with the current openness in China and the election of Barack Obama in the United States, the context is certainly changing for the two biggest players and emitters. That is not bad news.