Recently, I read with interest an article in the International Herald Tribune regarding the groundbreaking of the environmentally sustainable town, Dongtan, slated for construction just outside of Shanghai. I'd been following news of the town since plans for it were first published a few years ago. But what was most striking about the IHT piece wasn't the details the town's creators were highlighting- the rooftops with energy-producing photovoltaic solar panels, the wind farms, the trash shutes -- but rather the far more conspicuous absence of any Chinese sources in the story. Here we had some quotes from the program director of the World Future Council , and the London-based architectural firm Foster + Partners and even the World Wildlife Fund International, but not a word from the committee headed up to create local governance that would maintain what was being built or even a peep from the farmers digging the foundations for the town -- did they have any conception of the kind of precedent they were involved with in building this city?
Similarly, the Live Earth concert a few weeks ago went off without much fanfare or public support or engagement. Sure, there were the usual media culprits doing the usual feel-good story, Sarah Brightman made some people cry, and, when she was done, impatient-looking men scuffled from their expensive seats back to their BMWs and AUDIs parked at the foot of the Pearl Tower. Yet another flashy show wrapped up in Pudong, and afterwards, like most shows, the grounds were littered with beer bottles and ice cream wrappers.
For now, I believe in order for environmental activism to succeed in China, two things must exist: 1. an immediate economic incentive, and 2. an independent Chinese effort. Show towns and the show tunes alone won't get this show on the road.
That is why I am so taken with the idea of carbon trading in China.
Carbon trading seeks to control pollution and reduce Greenhouse Gas emissions via an administrative approach that provides economic incentive for the reduction of pollutant emissions. Also known as a cap and trade mechanism, in carbon trading a central authority -- such as a national government -- limits, or caps, the amount of pollutant any one company or group may emit. Those that pollute beyond allowance must buy credits from those that pollute less than their allowances or face penalization. This tactic is also called a "trade" -- the buyer is being fined for polluting, while the seller is being rewarded for reduced emissions.
By 2012, in accordance with the Kyoto Protocol, developed nations must work to reduce carbon emissions to 5% below their 1990 levels, but developing nations are so far exempt. So too is the United States, which has neither ratified nor withdrawn from the Kyoto Protocol, instead opting for a non-binding signature. Until this summer, the U.S. was also the largest single emitter of carbon dioxide from the burning of fossil fuels. China now owns the dubious honor.
Currently, China and other developing nations can create their own targets for reducing emissions and, in accordance with the Kyoto Protocol's Clean Development Mechanism (CDM), use the technology of developed nations to reduce greenhouse gas emissions in exchange for crediting the emission credits back to the respective developed country that provided said technology. In China, companies that seek to transfer emission quotas must first apply to the National Development and Reform Commission (NDRC). After approval and evaluation by a third party, the company registers and comes again under the auspice of NDRC, which is responsible for monitoring the company's CDM project implementation and execution. So far, many companies have met with great success via the CDM mechanism, many of them signing major agreements with the World Bank for some well-financed clean up. According to 2006 reports from the World Bank , Asia is the main supplier of CDM emissions credits worldwide -- in 2006, China made up 60% of the market. And as of April of this year, Xie Zhenhua, Vice Director of the NDRC, said China had already established 279 CDM projects worth more than 9 billion USD.
China's pledge this summer to drastically reduce carbon dioxide emissions by 2010 while maintaining its economic growth is most likely linked to its healthy new enthusiasm for carbon trading. I can only hope that the blinding flash of cash hurtling toward the mainland won't make people myopic to the sight of bluer skies.