U.S. Assistant Attorney General John Demers discussed the China Initiative and the process for assessing risks posed by Chinese acquisitions or the business operations of Chinese companies in America.
Todd Stern, Remarks on the U.S. Delegation's June 7-10 Trip to China to Discuss Climate and Energy Issues, June 12, 2009
Special Envoy for Climate Change
Bureau of Public Affairs
June 12, 2009
MR. KELLY: Well, good morning. Welcome to the briefing room. We’re very pleased to have with us today Todd Stern, Special Envoy for Climate Change. Mr. Stern was appointed by Secretary Clinton on January 26. He served in the White House from 1993 to 1999, where he worked on these kinds of issues, issues of climate change. Also from 1999 to 2001, he advised the Secretary of Treasury on the policy and politics of a broad range of economic and financial issues. Mr. Stern was most recently a senior fellow at the Center for American Progress.
And again, I welcome Mr. Stern. He’s going to talk about his most recent trip, make some introductory remarks, and then take questions. So, Mr. Stern.
MR. STERN: Thanks. Thanks very much. Welcome, everybody. I thought I’d just give you a little background on the trip we just took to China. I think we had a very constructive set of meetings there. I really went to China with the intention of having in-depth conversations about climate change in the Copenhagen negotiations, as well as to pursue our mutual interest in developing a dynamic partnership on clean energy and climate overall, something that Secretary Clinton talked about in February when she went to China on a trip where I accompanied her. And so we were looking to start fleshing that out, and I think we did both of those things on the trip.
I was joined by John Holdren, the President’s Science Adviser, also David Sandalow, Assistant Secretary for Policy and International Affairs at the Department of Energy, as well as colleagues from Treasury and EPA, and my own team from State. I had particularly in-depth conversations with Xie Zhenhua – I’m sure we can give you the spelling of that if you need – who is vice chairman of the NDRC in China, and their chief climate negotiator; essentially, my counterpart.
Also, a very useful meeting with Vice Premier Li Keqiang, and good talks with – I’m going to, I’m sure, butcher all these names – but good talks with Minister of Science and Technology Wan Gang; State Councilor Liu Yandong; and Vice Minister of Foreign Affairs He Yafei; and the National Energy Director Wen Jiabao.
I wouldn’t characterize my discussions on climate change as producing any breakthroughs, but we talked very openly and candidly and in a lot of detail about what needs to be done on both sides to advance toward a successful outcome in Copenhagen. And by the way, I never had any notion in my mind that we were going to get breakthroughs on this trip. It’s not what the trip was about.
We certainly did not agree with each other on everything, but I think that we each came away with a better and a clearer understanding of each other’s views and perspectives. I will say, and I’ve said this before, but I think it was again true during this trip, that I was very favorably impressed by actions that China’s already taken, and by – taking, and by China’s commitment to develop a low-carbon path forward and to take potentially far-reaching steps to contain their greenhouse gas emissions.
And at the same time, as they pursue what is an undeniable need to develop and grow, I have said on some number of occasions now, and I think it’s accurate, that China is, in effect, both a developed and a developing country at this point. They are developed in some of their major cities, but there is still – like Beijing and Shanghai – but there is still – they are still developing and still quite poor in a large and far-flung countryside.
The stark reality, though, is that the world cannot contain climate change and cannot avoid dangerous levels of greenhouse gas concentrations in the atmosphere without very significant action by China. And we discussed this point, as well as the science behind it, in great detail. Again, as I said, Dr. Holdren was there with us and was very helpful in conversations on the science.
Among the issues that I stressed with the Chinese were the need for China to develop a low – a long term, low-carbon pathway consistent with what the science is telling us; significant actions in the mid-term range between now and 2020 that will reduce emissions very significantly from where they otherwise would have been; and to keep China on that low-carbon pathway forward; that they’ll need to make a strong commitment to carry these actions out, and that their actions and the underlying numbers, if you will, will need to be transparent. This is essentially a question of measuring and monitoring emissions. It goes by the rubric in the Copenhagen negotiations of MRV, which is measuring, reporting and verifying. So we had some conversation about that as well.
We will be having a very extensive, continuing dialogue going forward. There’s any number of points along the calendar where we are going to be engaging directly with the Chinese. We have an upcoming meeting in Mexico next week for the third preparatory session of the Major Economies Forum. There will be a leaders meeting for that forum in Italy. There will be a meeting later in July between China and the United States here, and we will be carrying out – I know I will be carrying out with Mr. Xie and others very extensive, continuing conversations going forward in order to try to find common ground.
So with that, I’m happy to take questions. Do I call these out or –
MR. KELLY: It’s up to you.
MR. STERN: All right. You go ahead.
MR. KELLY: Yeah, go ahead.
QUESTION: Ambassador, I appreciate you taking the time to do this. It’s helpful. I’m unclear as to what the U.S. is specifically expecting. I know what’s not being expected. There is going to be no expectation for a reduction of emission targets, mandates. Do they agree on the 450 parts per million and will they agree to at least not raise emissions? And what are your specific expectations?
MR. STERN: Well, let me try to clarify a couple of things because the words matter and words can be confusing in this area. We are expecting China to reduce emissions very considerably compared to where they would otherwise be. So in other words, to take – to undertake policies that will bring their emissions down a lot from where they would be on what’s called generally in this game of business-as-usual: “trajectory.” So that’s not an absolute reduction below where they are right now, because they’re not quite at that point to be able to do that. And in that respect, developed and developing countries are different.
But on the other hand, the reductions – so if your curve would ordinarily be like this, and your curve is like that, that’s a big reduction. It’s a reduction against what otherwise would have been. But so that’s – I think that’s quite critical and it’s what is – it’s kind of what – it’s what’s both appropriate and necessary at this point for China to be consistent with that longer-term path towards something in the neighborhood of 450. I mean, we don’t know whether it’s 445 or 460 or – but in that general range.
We did talk about the notion of a peak year. A peak year is a concept, again, that essentially says your missions go – continue to go up for a while, but in a much – at a much lower rate than they otherwise would have. Then you hit a peak, and then after that they come absolutely down. We did talk about that concept also, and I think that they take that concept onboard. It matters a whole lot when that peak year is, and we don’t know yet where they’re going to come out on that, but – so very important that there be significant reductions; just have to understand what’s meant by reductions and what’s not. It is not correct to say that we’re not expecting China to reduce, because we are.
You asked whether they are – they kind of are onboard with 450 parts per million – that’s the concentration in the atmosphere. I don’t know about that. We talked about it. We talked at some length about our view of what the science requires, and they didn’t – wouldn’t say that they disputed it, but they – there wasn’t – we weren’t trying to have a discussion about signing on to some number, but rather to say here’s the general sense of what – where we think the scientific consensus is and that something along these lines is what needs to guide both what you do, what we do, and what everybody else does.
MR. KELLY: Yes. Could you identify yourself as well?
QUESTION: Nick Juliano with Carbon Control News. I want to ask what impression did you get from the Chinese as to their thoughts towards what’s happening in the legislative process here in the U.S.? And also, as a sort of follow on to that, launching their scenario sort of in Congress where it looks like the House is trying to meet this July 4th deadline to pass the climate bill out of the House, but nobody really sees a pathway to 60 votes in the Senate, do you worry at all, going into Copenhagen, what it’s going to mean if we have this sort of six-month lag of a House-passed bill with, you know, no similar passed legislation in the Senate, what that’s going to say to the rest of the world in the broader Copenhagen talks?
MR. STERN: We did talk about the bill in China. And I think that they were very favorably impressed by the fact that it had progressed to the important – it had taken the important step that it took a few weeks ago when it passed through the Energy and Commerce Committee. They’re clearly following it very closely. And they, I think it’s fair to say, regarded that as – they took – they were pleased by that. They see that as a step that – as an indication that things are really moving here.
On your other question, look, I think that this is a one-step-at-a-time kind of deal. I think that it was a huge, big step under the leadership of Chairman Waxman and Markey to get the bill reported out of Energy and Commerce. My general sense is that there’s a – there is a kind of commitment and objective to get it through the House this summer. I think that there’s a good chance that that’ll happen, and we’re strongly supportive of that, obviously.
And I don’t have any – I am absolutely not prepared at all to say that I don’t think it’s going to get 60 votes in the Senate. I think that this bill is going to become law. I can’t give you a time frame because I don’t know the timeframe yet, but I think that the President is committed to it, the Administration’s committed to having strong, comprehensive energy legislation passed. And I think that there are – that there will be a lot of support in the Senate, and there’ll be, undoubtedly, a lot more negotiation and debate that’s going to have to happen first. But I am in no way pessimistic about that.
MR. KELLY: Yes, ma’am, in the back, if you could identify yourself.
QUESTION: Yes, Christine Cordner with Platts Emissions Daily. Speaking about the bill, I was wondering, in talks ongoing, how critical would it be to – for a bill to clearly allow CDM generated offset credits in a U.S. scheme to, I guess, maybe get China to move forward with an agreement to caps or anything?
MR. STERN: Look, I think that the general concept of offsets is an important concept to be embedded in any ultimate legislation. It is in the Waxman-Markey bill as it stands now. This is a mechanism that actually serves two purposes: it allows reductions in the United States to happen at a lower cost than they would otherwise happen, and, just as important, if not more important, it’s a mechanism by which – that helps to drive investment by the United States and other developed countries that have similar mechanisms into developing countries, whether that be China or countries in Africa or India or Brazil or wherever it may be. So I think it’s an important concept.
I think it’s also extremely important that the kind of rules of the road and the standards that apply to offsets be responsible and tight so that the reductions are real reductions. It’s an area which is inherently a little bit difficult to manage, so it’s quite important that it be done in a way that’s got real environmental integrity. But I think that can be done, and I think it will be done.
QUESTION: Mr. – oh, yeah. Matt Cover with CNSNews.com. Now that you’ve had these discussions with the Chinese, what’s the U.S position in regards to providing technical and financial assistance to so-called developing countries? There was some language in the U.S., I guess, recommendation text that was sent out a couple of weeks ago about Copenhagen that recognized that there would need to be some financial and technological assistance. Is that something that we’re going to be providing to the Chinese?
MR. STERN: Well, I think that the issue – just put China aside, because I don’t think this is a China issue, per se. I think it’s a developing country issue, which includes China, but it’s not only China. I think there’s no question that a Copenhagen agreement is going to have to include mechanisms to provide for financial flows and technological assistance to developing countries. And in my view, that’s with a particular focus to the poorer countries, and that needs to focus both on mitigation, which has to do with means of reducing your CO2 emissions, putting you on a low-carbon path forward; and adaptation, which has to do with dealing with the effects of climate change that are already happening and that are going to happen, no matter what occurs.
So yes, I think that there will need to be those mechanisms. There are a whole host of questions that are important and issues that are important with respect to how to structure a financing mechanism, what institutions to use, what governance to use, where the sources of money would come from – that’s between public and private – and carbon markers and all of those things are under discussion.
MR. KELLY: Yes, again, if you could identify yourself.
QUESTION: Xiong Min from 21st Century Business Herald. It’s a Chinese paper. Question is about the bigger ways, paying the bill to the Chinese parts. Are they satisfied with the language regarding the technology assistance to the developing world in the bill?
Also, I’m not sure whether U.S. is still working on the bilateral agreement with China before the Copenhagen meeting.
MR. STERN: The – so just noting your questions down. Well, I think China has a very active interest in technological cooperation, and there are a couple of different kind of aspects to that that we’re working on. I mean, one is the – this broad, clean energy collaboration that we – that I referenced in my remarks. And we are – we had a lot of discussion with them on this trip about that, and that can involve any number of important areas: research and development; cooperation on building on efficiency; industrial efficiency; solar energy; carbon capture and storage, as it’s called, for coal; electric vehicles, and the like, and we talked about all of those things. I think that we – what we’re interested in doing is to define a few areas where significant actions can take place, actions that can make a difference and where our cooperation can make a difference. I mean, there’s some areas where they can do their thing, we can do our thing, and that cooperation doesn’t matter that much. But there are other areas where we can actually, working together, have a synergistic effect that would be quite positive.
So that’s an important part of technology cooperation. And that is, I think, supportive of a Copenhagen agreement, but exists at some level outside a Copenhagen agreement. It’s a bilateral thing that would – that can happen in any event. There’s also discussion about what kind of technology provisions that would be actually in a Copenhagen agreement, and that’s a kind of a broader discussion, not just with China. But China’s very interested, we’re interested, in technology cooperation in the right way.
MR. KELLY: James Rosen from Fox.
QUESTION: This is a layman’s question, but recognizing that your mandate is to focus on relations between states in a multilateral accord, I wonder if you could address the role that you think that individuals – ordinary, everyday citizens – can play in this. And I’m thinking in particular, for example, of Vice President Cheney’s famous remark that recycling might be a personal virtue, but it’s not a policy. What role do you think that ordinary people could play in moving these things along?
MR. STERN: Well, I think there's two roles that ordinary people can play, and the first is not exactly what you’re talking about, but I’ll take an opportunity to say it anyway, which is that there has just got to be – I mean, that the more that political leaders here and around the county, but particularly in Washington I’m talking about, hear from and recognize from their constituents that this is an issue that matters, this is, in effect -- not to be melodramatic, but I actually think it is a fate-of-the-earth question. I mean, there are many people who think the two great questions in the 21st century in terms of security are nuclear arms and climate change, and I think that’s probably right. So it’s important for people to convey their level of concern and to make it clear that failure is not an option here, and that kind of dillydallying and procrastinating is not going to work.
There are tough issues. I’m sympathetic to anybody on the Hill trying to wrestle with these issues. But we’ve got to wrestle with them and get them done. So that’s one thing.
The second thing is, everything is going to come back to personal conduct at some level. Now, I think that what – if you’re going to make a difference at the scale that – where we need to make a difference, you’re not going to get there by just cheerleading people to change their lights and all of that. They should change their lights, and that’s a part of the equation, but you’ve got to set the rules of the road in such a way, and the incentives in such a way, and the requirements in such a way that help to drive people in that direction.
If power companies had the right incentives to be – and they do in some states; some states have done this. But if power companies had their profits and their sales decoupled so that they could be making money by pushing energy efficiency rather than simply energy use, then they’re, in turn, giving incentives to their users to be more energy efficient, and the thing radiates through the system in a way much more effective than simply saying, “Come on everybody, let’s do the right thing.”
MR. KELLY: We have time for one more question. Mark Lander from The New York Times.
QUESTION: Another non-specialist question, but I’d be interested just if you talked a little bit about the relationship between economic growth or lack of growth or reduction in growth trends in China, and the Chinese attitude towards climate change issues. I mean, does the fact that their growth has fallen off so dramatically make them more or less reluctant to talk about these things, or to consider steps that have a cost attached to them?
MR. STERN: What I think is that they see that there is not – that the business-as-usual path is not sustainable for them. I do think that they see that, and I do think that they see that there is a low-carbon path that they’ve got to follow.
Now they’re trying to make difficult judgments about what to do when, how much to do when. They clearly have huge challenges just in terms of managing their economy and managing their system. I mean, they need to grow at a very high level, probably over 8 percent a year, just to create enough jobs to accommodate the new entrants into the workforce. They’re trying to move something in the order of 15 to 20 million people a year from the countryside to the cities.
I mean, if you think about it for a minute, half of all housing in the world is going to be built in China over the course of the next couple of decades. They are building housing at the rate of two Bostons a month. That’s what’s going on, and it’s a huge country with huge challenges. So you can’t – I mean, if you kind of understand what they’re up against, you can’t kind of help but be sympathetic. And yet, as I have said on other occasions, the atmosphere is unforgiving. And so there’s only so much stuff we can throw up there without tipping into potentially catastrophic danger.
So they need to take a low-carbon path. I think they get that they need to take a low-carbon path. And the real issues are going to be, how fast are they prepared to move along, and is the speed at which they’re prepared to move along consistent with what the science requires? So I am quite sympathetic to the challenge that the Chinese are facing. By the way, nobody – when we were industrializing, nobody told us how many – how much we could put up into the air because nobody understood it at that point.
So I mean, they do have a different challenge, and not only them, but other developing countries. And yet there’s no choice; it’s got to be done. So that’s what’s hard. That’s what makes this a really difficult but quite critical issue.
MR. KELLY: Okay. Thank you very much. Thank you, Mr. Stern.
MR. STERN: Thanks very much.
QUESTION: Thank you.
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