China Will Hit Its Targets, Will the U.S.?

China is the number-one source of greenhouse gases.  But Washington Post China Bureau Chief Simon Denyer recently wrote: “There is a growing sense that a fundamental change is taking place, because of an aggressive shift into cleaner fuels, slower economic growth that has hit heavy industry hardest, and a conscious transition away from high-polluting industries that used a lot of coal and electricity.”

Coal use, which had risen by more than 9 percent a year in the decade to 2011, fell by 2.9 percent last year, and the decline has continued this year. (As you may have read, China disclosed in early November that in recent years it has been burning 17 percent more coal a year than previously disclosed. But presumably that does not change the positive trend.)

Denyer quotes several experts struck by the turnaround, including Mikkal Herberg of the National Bureau of Asian Research: “I was traditionally, honestly extraordinarily pessimistic about all this, if you had asked me two or three years ago. It is only in the last year or two that I have actually begun to believe they can do some of the things they are promising to do.”

Now, many China watchers believe that the world’s top emitter could beat its own emissions target and reach a carbon-dioxide peak even before 2030. Optimists, Denyer reported, now predict that China’s coal use could peak between 2017 and 2020, before beginning a long, slow decline. Greenhouse gas emissions will lag behind but are likely to peak in 2025, according to a report by Nicholas Stern and Fergus Green at the London School of Economics. The country has pledged to create a national cap-and-trade program by 2017.

One reason for China’s urgency in trying to move away from coal and toward renewable sources is the nation’s appallingly poor air quality and citizens’ growing impatience with that pollution. The Washington Post’s Emily Rauhala cited some stunning data from the city of Shenyang. On November 9, the government’s toxic particles readings were 40 times the level that the World Health Organization considers safe. Think about that for a moment. According to a recent study in the journal PLOS One, air pollution in China leads to 1.6 million deaths a year.

Fortunately, the United States is not racking up numbers of that magnitude. Even so, our air should be cleaner, and we must do more to reduce greenhouse gas emissions. EPA’s Clean Power Plan, assuming it survives intense challenges in the federal courts and on Capitol Hill, will not reduce emissions quickly enough. In fact, a recent analysis of nations’ pre-Paris pledges by Climate Advisers concluded that even if--if--all countries met their voluntary targets, the world would fall 58 percent short of the reductions needed to stay below the two-degree Celsius goal that scientists recommend. (Climate Advisers’ founding president, Nigel Purvis, was one of four co-authors. He was a leader in climate diplomacy in both the Clinton and George W. Bush administrations.)

That’s why we need to put a price on carbon. The best way to do that is by levying a revenue-neutral fee, of perhaps $30 per metric ton at the outset, where the carbon enters the economy. It should ramp up over ten years. To attract more Republican support and to give the fee a greater pro-growth flavor, half the proceeds should go toward reducing the corporate tax rate. At 35 percent, it is the highest in the industrialized world, and the revenue from this fee could knock it down to 25 percent. The balance of the proceeds could be refunded to low- and middle-income consumers, who would be paying slightly higher energy prices.

Would a fee put some U.S. companies with high-carbon operations at a disadvantage? Not if we also enact a border tax adjustment, which would encourage our trading partners to enact similar carbon pricing measures to avoid having their exporters pay the fee to the U.S. government at our border. U.S. exports would receive a rebate. Both are permitted by international trade rules. This would move the world toward a common carbon price regime.

If China and the United States can provide strong enough leadership, there is some basis for optimism that we can prevent extreme changes in our climate and the damage that would result for our health, economy, and national security.