As President Obama prepares to set foot on Chinese soil for the first time today, the United States and China, the globe's leading greenhouse gas producers, are engaged in a classic standoff over climate change. The United States wants to see China agree to cap its accelerating level of carbon emissions before it acts. China wants the U.S. to lead by example on climate change and share technology and expertise to help reduce the costs of its efforts, and minimize any impact on its growth agenda. Although many nations are taking action on climate change, meaningful global impact will be impossible without collaboration from the U.S. and China in advance of the United Nations Climate Change Conference in December.
One critical path for the two nations to pursue is carbon capture and sequestration (CCS). CCS is a process that captures greenhouse gas emissions from industrial processes before they enter the atmosphere and stores them permanently underground. CCS technology has the potential to mitigate emissions from coal-fired power plants and help nations to achieve the reductions in global greenhouse gases that energy efficiency, conservation and renewable energies are unlikely (or unable) to meet on their own. This technology has significantly advanced over the past decade, and components have proven commercially successful in projects around the world.
Why should the U.S. and China form an unprecedented partnership to collaborate on this technology now? Both countries continue to rely heavily on coal for power generation (2030 projections are 50% and 73% for the U.S. and China, respectively). And while renewable energy sources are projected to rise in the next two decades (almost doubling in the U.S. and more than tripling in China), they will only provide a fraction of the power coal provides. Without a major change in global energy policies and practices that directly address coal, worldwide CO2 emissions are projected to increase by 39 percent from 2006 to 2030. And a U.S.-China partnership would help China reduce costs of abatement, while building American expertise and positioning the U.S. as a leader in a new job-rich carbon management industry.
To take advantage of this, the U.S. and China must overcome considerable technological, financial, and regulatory hurdles facing widespread commercial CCS expansion. A new report I co-authored last week with leaders of the Asia Society and Center for American Progress, "A Roadmap for U.S.-China Collaboration on Carbon Capture and Sequestration," identifies a feasible, three-pronged approach which the U.S. and China could follow to achieve such an outcome.
Sequester the pure CO2 streams on existing commercial coal-fired industrial plants in China. Today, commercial scale sequestration is almost exclusively deployed around enhanced oil recovery - pumping CO2 into mature oil wells to improve production. To meet global CO2 emissions objectives, broader geological storage options must be made economically viable. China has installed more than 100 industrial coal gasifiers that produce, as a byproduct, pure streams of CO2 that are vented directly into the atmosphere. Emissions from these gasifier plants are more straightforward and less costly to capture than emissions from combustion plants.
Invest in research and development to retrofit older power plants. Because existing coal-fired plants must be either shut down or retrofitted for CCS to reduce or eliminate their CO2 emissions, the U.S. and China should identify plants in both countries for large-scale retrofit demonstrations. These projects would help develop and test new capture technologies to improve effectiveness and lower costs. To support these efforts, the countries should open a joint R&D center for CCS technologies, a move which already has the support of the U.S. Energy Department, which just granted $44 million to projects to develop CCS technology.
Catalyze markets for CCS. The U.S. and China will have to provide financial incentives for private capital to invest in carbon capture and sequestration projects. The U.S. should consider developing government-backed public finance structures, such as risk insurance or guarantees of CO2 prices for a set amount of successfully abated carbon similar to those proposed by the American Clean Energy and Security Act of 2009.
All of these moves will take time and effort. They also represent a first-generation approach to dealing with carbon-emitting power and industrial plants. But the plants are not going away anytime soon. We must break the cycle of inertia and start the process of driving down the cost of compliance that stands in the way of progress toward climate objectives. The U.S. and China have the motivation to act now. And as environmental scientists and citizens around the globe watch, the clock is ticking.
Scott Daniels leads the global chemicals-energy and sustainability practices at Monitor Group