China matters. What China ends up choosing to do regarding its aggregate greenhouse gas emissions will in large part drive both the extent and pace of climate change. China continues to grow at 6% notwithstanding a worsening international economic crisis. China’s annual greenhouse gas (GHG) emissions have now reached levels that exceed the United States. And yet, China’s “ecological debt” measured in this context by historical (cumulative) GHG emissions is significantly less. Relatively speaking, Canada’s aggregate emissions are much smaller. However, on a per capita basis our emissions are on par with the Americans and our ecological debt is of a similar order of magnitude. All the while, China’s recognised economic development needs remain unsatisfied.
Canada is a party to the Kyoto Protocol but has yet to implement a domestic regulatory regime designed to implement the protocol. For example, at the time of publication, Canada has yet to meet its obligation to have a national registry for carbon instruments that would permit Canadian businesses to effectively participate in international projects. On the positive side, various provincial initiatives to regulate GHG emissions are in place or in process and action is anticipated from the federal government to implement its key policy (Turning the Corner) though tweaked as appropriate to accommodate a regulatory regime as stringent as that which is expected out of the United States within the next year or so. China is an active participant in the Kyoto Protocol hosting a significant proportion of the emissions reduction projects proceeding under the auspices of the Clean Development Mechanism and is fully engaged in the post-2012 negotiations.
US President Obama’s administration takes climate change seriously and recognizes that serious progress requires a serious and collaborative engagement of China. There is little doubt that a successful conclusion of the international negotiations currently under way depends on a meeting of minds between the United States (the largest industrial emitter and only significant Annex 1 jurisdiction still outside the Kyoto Protocol) and China (the largest developing country emitter). China continues to insist that discussions regarding negotiated reductions in GHG emission occur in the context of the United Nations Framework Convention on Climate Change and the Kyoto Protocol and that prospective agreements take note of differential responsibilities and capabilities. A “Copenhagen” climax of sorts is hoped for this December. There is a growing consensus that a collaborative engagement of China (and arguably, as a consequence, of India, Indonesia, and other large developing countries) must key in a timely way on a few priority areas. A recent Pew Centre/Asia Society publication listed the following areas: deploying low-emissions coal technologies including carbon capture and sequestration, improving energy efficiency and conservation, developing an advanced electric grid, promoting renewable energy and quantifying emissions and financing low carbon technologies. The private sector is expected to play a central roll in meeting the challenges of climate change. Indeed, evolving polices and regulatory regimes directly incentivise and reward business that is better than business as usual, particularly international investments and commercialisation of technology in these priority areas. Climate change mitigation is in large part about doing business and a significant amount of that business will be done in China. There are opportunities to deploy capital and experience, to take advantage of entrepreneurial opportunities, to finance, to commercialise low carbon technologies and to provide goods and services. Will Canadian businesses participate? Will Canada engage China?