What is China to do? Twenty-five years ago China had little modern industry, an enormous population in poverty and was just beginning to look to the West for examples of how to bring prosperity to its hard working and thrifty people. I was there and saw this firsthand as a U.S. government official taking American industry executives to view the opportunities to bring 20th-century solutions to Chinese industries like steel, coal and manufacturing. A quarter of a century later, on the eve of Copenhagen, I serve as president of the National Center for Sustainable Development (NCSD), a national nonprofit corporation in Washington, D.C., that promotes a low-carbon economy.
This past week we posed that same question to two Chinese Ministry of Finance officials that we elected to our board and management team respectively. This question is also appropriate for the United States. As both countries approach the climate summit, it's clear: Neither country likes being told what to do by others.
What we discovered this week is remarkable. Below the surface of political posturing is the practical reality and acknowledgment that China and the United States must work together to lead the world to a low-carbon future. China has reached out to us as an NGO to help it formulate a new generation of green policies. China's nonprofit CDM Fund Management Center in Beijing manages an interagency fund that is newly formed under the authority of the State Council, supervised by the Ministry of Finance and supported by a portion of each of China's Certified Emission Reduction Certificates (CERs) under the Kyoto framework.
The CDM Fund will help direct education, policymaking and investment into enterprises that must now submit a plan for "getting green" to their regulators. This three-pronged strategy will assist the developing Chinese renewable energy market by devising specific sustainability standards and setting up a legal framework and financial mechanisms to facilitate the country's transition to a "greener" economy. This is a serious commitment. China wasn't forced to make this decision by any deadline or international legal or bi-lateral framework. The Chinese are eminently practical people and as such know it is not economically viable to continue on the same course as today. Taking a 50-year perspective they have concluded, we think, that a low-carbon future holds as much promise for jobs and sustainable development as the industrial revolution that brought prosperity to the developed world. The Chinese want to achieve broad-based prosperity without the waste, inefficiency and pollution the West suffered for 200 years.
Of course, it's hard to turn an ocean liner around. Physical laws of motion apply and cannot be changed by any Copenhagen mandate to do so. It took 200 years of polluting industrial growth to get the developed world to where it is today. China is growing very fast now but from a very low base: I was there and saw it firsthand. China is still a predominantly agricultural country with 80 percent of its people living in poverty. Certainly the coastal cities are urban and as congested as any in the West but this prosperity involves a fraction of the population.
The National Center for Sustainable Development is lucky and very well positioned. We have an unusual insight into Chinese policy at a high and strategic level. Our partner is the Finance Ministry, and it takes a practical approach. Establish policies first, evaluate practical demonstration projects in renewable and cleaner energy use (including coal) and then provide investment. This is a formula for steady progress. China wants the momentum of a successful Copenhagen conference and international cooperation at many levels such as with NCSD. The fact that China is following its own "middle way" between doing nothing and doing everything at once is a reasonable proposition -- and very Chinese.