Dialogue on the Next Global Climate Pact

I. Corporate responsibility

Coping with climate change demands the joint efforts of everybody, where the enterprises are playing a role of increasing importance.

The development of human society and economy has gone through three stages: the primitive agricultural society, the industrial society, and the information society, suited with agricultural economy, industrial economy, and information economy respectively.

We have only one planet to live on – the Earth. No matter whatever change would take place, the objective of social progress is to satisfy the needs of the people, and at the same time protect the environment and make good use of natural resources. Only in this way can we maintain a healthy and harmonious development of both economy and society.

The Chinese government advocates the implementation of the Scientific Outlook on Development featuring a comprehensive, coordinated, and sustainable development. Especially under the new historical context, development should be both scientific and harmonious.

This year is the 30th anniversary of the reform and opening up in China. During the 30 years, China has made glorious achievements in power industry. In 1978, China has a power installation capacity of over 57 million kilowatts with a power output of 256.6 billion kilowatt-hours, accounting for 3% of global power output.

In 2007, the power installation capacity of China reached 713 million kilowatts, and its power output raised to 3.2 trillion kilowatt-hours, an over 11 times increase compared with that of 1978, making up 16% of global power output, which makes China achieve the fastest development in power industry and the second largest world wide, only less than 6% behind USA – the largest country in power industry. However, on a per-capita level, China, with a population of 1.3 billion, still has a huge potential in the development of power industry.

While focusing on development, Chinese enterprises, under the governmental policies and requirements of scientific and harmonious development, are carrying out economic restructuring, enhancing energy efficiency, tapping into hydropower and other renewable resources, and improving policies and measures of ecological construction.

As far as power industry is concerned, at one hand, we have taken a series of measures to cut the emissions of carbon dioxide and other polluting substances by way of keeping and promoting the large projects and holding or closing down the small projects, energy conservation and emission reduction, and technological transformation like desulfuration, which has scored pretty good results. For example, in 2007, the emission of sulfur dioxide decreased by 9.1%, while coal-fired power output increased by 14.6%. On the other hand, we have also endeavored to facilitate the development and use of new energy and renewable energy.

I can't agree more with Ms. Connie's [Danish Climate and Energy Minister Connie Hedegaard] opinion on coping with the climate change by the Chinese business leaders. (See "China Is Quick Off the Blocks in the Race to Combat Global Warming, Say Climate Experts," Climate Community, 11/12/08) As leader of a power and energy enterprise, I have expressed my opinions over and over again in international conferences and forums, advocating cooperation and joint efforts to face the challenges from climate change. I believe we should establish a new mechanism of effective energy conservation and emissions reduction, and do a better job in developing new energy and renewable energy.

We have set the corporate mission as "building an enterprise that is energy saving and environmental-friendly, supplying economical, environmental-friendly, and stable energy." As a responsible state-owned large power enterprise, we aim at bringing light to the world while keeping a clean world of green water and blue sky for our offspring.

To achieve our commitments, we always adhere to the strategic direction of chasing up the shift of the development mode and tapping into new energies. In 2006, we began the building of China Power New Energy, an international platform of capital and industrial development through purchase and merger. At present, we have realized adequate economic and social achievement in wind power, hydro power, garbage power, biomass power, and other businesses in several provinces such as Guangdong, Shanghai, Gansu, Jiangsu, Inner Mongolia, and Heilongjiang. It is our social responsibility, and we must take the responsibility in our own initiative.

II. Report mechanism

As you know, there are three basic principles well-known internationally, People, Planet and Profit, or TBL (Triple Bottom Line) in short. These principles are a more comprehensive value system and standard to measure the achievements of organizations and societies in the three aspects of economy, environment, and society. In the beginning of 2007, the "TBL Measurement Standards on Cities and Industries" was approved and become the guiding way of measuring all costs in public spheres.

For enterprises themselves, this kind of standard and direction will impel them to increase operation efficiency through exploration and adaptation of innovative approaches in dealing with climate change.

In fact, a number of enterprises have already made adjustments in operation, such as restructuring of supply chain and redesign of manufacture process, so as to suit the changed climate. These approaches not only enable the enterprises to reduce negative impact on the environment, but also help them to achieve a win-win result in corporate profits and environmental protection.

As a trend of development, it has become a practical requirement of international enterprises to attach greater importance to environmental protection. More and more countries have promulgated corresponding laws and regulations. BS 7750 and ISO 14000 standards, EMAS and Global Reporting Initiative Guidelines drafted by the Global Reporting Initiative, which has been adopted by some Chinese enterprises, are all standards of environmental protection, but none of them has become a formal standard and criteria for environmental protection.

Human development in the future demands that we work harder to promote the establishment of a monthly report system on global climate change. The system should be similar to the GRI guidelines, and should provide major structural guidelines for enterprises to standardize economic, environmental, and social information in their annual reports. I strongly believe it is necessary to establish a report mechanism of environment and climate change for the following reasons:

1. The impact of environment has become increasingly globalized, and especially that of climate change, which is witnessed by all.
2. Environmental protection demands the joint efforts of the international community, without a common basic report mechanism in technological standards and industry code, the cooperation would be hindered.
3. There are no essential barriers in legal and technological status quo.
4. As a matter of fact, faced with public concern, many enterprises have begun to issue reports of social responsibility and environmental protection, so as to prove their sense of responsibility and favorable efforts.

III. Cooperation mechanism

I think that the settlement of a number of important issues, including the building of an ideal framework for a global climate pact, needs a basic concept, and that is cooperation. A regular cooperation mechanism is especially needed in techniques, investments, and sustainable development.

First of all, we should facilitate innovation and international cooperation in science and technology, which is one of the key measures. The direction of future development is to realize higher goal of development with the minimum greenhouse gas emissions, and this can only be achieved with progress in science and technology.

Secondly, while adhering to relating pacts and protocols, we should establish and improve a framework mechanism under the United Nations Framework Convention on Climate Change, including core mechanisms such as the development and transfer of technologies. For instance, the emission of greenhouse gas can be greatly reduced if some technology extensively used in developed countries could be transferred to developing countries at a lower cost and put into application on a large scale.

Thirdly, we should closely connect the issue of dealing with the climate change with the implementation of the sustainable development; and adhere to the common and different responsibility in the international community.

Fourthly, the international community, governments, enterprises, and investors should work together to promote the formation of a new input mechanism. Just as the current financial tsunami needs to be coped with join-handedly by all countries worldwide, solving the problem of climate change calls for a huge sum of investment in a broad battlefield. This mechanism can help enterprises avoid capital and operation risks in coping with climate change.