If the United States starts charging people and businesses for the greenhouse gases they emit but China does not, America's economy could fall behind its fast-growing Asian competitor.
It's a crucial issue now bogging climate-change legislation on Capitol Hill. No lawmaker wants to push through laws that are likely to raise US energy costs and hand an advantage to global-warming scofflaws.
"I will not support major legislation imposed upon the American economic system ... unless and until we have brought the Chinese on board," said Sen. Pete Domenici (R) of New Mexico, who serves on the committee that would move global-warming legislation, in a hearing last month.
But new evidence suggests that, despite a fast-growing economy that could make it the world's largest carbon-dioxide emitter as early as this year, China may be getting on board. In a bid to cut energy costs, boost energy security, and reduce air pollution, it could be essentially creating the largest greenhouse-gas-reduction plan on the planet.
Indeed, if the nation's leaders follow through, it may be the US playing catch-up with China – not the other way around. "You hear people in Washington saying we can't do anything if China doesn't do anything to reduce greenhouse-gas emissions," says Ned Helme, president of the Center for Clean Air Policy (CCAP), a Washington think tank. "But that's basically a myth. China is really doing quite a lot, not under treaty but on their own."
Make no mistake, China's greenhouse-gas emissions are projected to increase rapidly through 2020. With its roaring economy and demand for coal-fired power, China will surpass the US as the largest producer of greenhouse gases sooner than expected, perhaps this year instead of in 2010, International Energy Agency officials said this week.
Yet China's rate of growth in emissions could slow thanks to sweeping reforms, started in 2001, to slash energy use at cement, steel, and paper factories, and for automobiles, Mr. Helme's group reported this week. Those reforms are on track to cut 168 million tons of greenhouse gases by 2010, says the CCAP.
That's a pittance compared with the nearly 6 billion tons of carbon-dioxide China emits annually. But that amount nearly matches the Bush administration's goal of reducing US emissions, voluntarily, by 183 million tons a year by 2010, says the CCAP report.
That small start may be just the beginning for China. Last year it embarked on a dramatic plan to boost energy efficiency 20 percent nationwide by 2010, a move that could eliminate as much as 1.4 billion tons of carbon-dioxide emissions, according to a recent Lawrence Berkeley National Laboratory analysis.
"They've really done a lot already to reduce emissions and improve energy efficiency," says Mark Levine, who heads the China Energy Group at the lab. He notes, however, that growth in coal-fired electric power between 2001 and 2005 has vastly increased Chinese emissions.
China is also currently lagging behind its ambitious 2010 efficiency goals, Dr. Levine says. Instead of a 4 percent energy-efficiency gain, the nation achieved only a 1.2 percent cut last year, the first year of the program. But even if China gets only halfway to its goal, the reductions in emissions growth would be larger than the EU's Kyoto goal of cutting 682 million tons annually by 2012, Helme says.
Such a large cut means China could end up by 2010 with "by far the most aggressive global warming pollution reduction policy of any country in the world," Douglas Ogden, director of the China Sustainable Energy Program at the Energy Foundation, an organization in San Francisco promoting renewable energy and efficiency in China and the US, wrote in an e-mail.
Much still hangs, however, on whether China can replicate the energy-efficient gains it made through 2000, Levine says. China once had 20,000 efficiency experts, since disbanded. Now the central government is demanding long-term efficiency gains from provinces, whose eyes are fixed more on short-term profit.
Still, if China's new efforts were recognized, it might deflate what Helme calls a pair of "myths" that are inhibiting Congress from acting on global warming.
One myth, he says, is that developing nations like China aren't taking meaningful action to curb emissions. Another is that China and other developing nations, like Brazil, will be pollution havens that suck jobs out of the US. (An exception to the rule so far may be India, he says.)
Several new bills, including one proposed by Sen. Jeff Bingaman (D) of New Mexico, include an "off ramp" to allow the US to back out of its emissions-reduction program if China does not do its part.
Domenici isn't yet satisfied, however. And in the House of Representatives, Democrats such as Rep. John Dingell of Michigan and Rep. Rick Boucher of Virginia are worried about China gaining an unfair advantage. A number of Republicans, meanwhile, are digging in their heels even more. "You cannot have a legislative package that passes the House of Representatives that does not have an enforceable, meaningful mechanism to include the developing world, especially the Chinese," said Rep. Joe Barton (R) of Texas in hearings last month.
But if Congress doesn't recognize China's actions, the US might end up delaying climate-change policy for no good reason, some say. "For some lawmakers, their opposition has turned from 'we shouldn't do this because climate change isn't occurring' to 'we shouldn't do this because what we do has no meaning if China doesn't act,' " says Kyle Danish, a partner at Van Ness Feldman, a Washington law firm specializing in energy and environmental issues.
Business and labor groups, in an unusual moment of alignment, say emissions credits should be required for imported goods manufactured using energy- and CO2-intensive processes.
"Imposition of emission controls by some but not all major emitting nations disrupts the competitive trade balance between nations and inappropriately shifts jobs to countries without emissions controls, where manufacturing costs will be less," wrote American Electric Power president Michael Morris in an opinion piece in Energy Daily coauthored with Edwin Hill, president of the International Brotherhood of Electrical Workers.
Despite China's official hard line – government representatives are adamant that China won't curb emissions if it compromises economic growth – there are glimmers of flexibility. Earlier this month, Chinese Premier Wen Jiabao and Japanese Prime Minister Shinzo Abe signed an agreement to work on a successor to the Kyoto treaty.
But if the Chinese are acting to curb global warming, Congress needs to see that in clearer ways, some say. "We in the US would be better off to deal with the reality of what China is doing rather than the perception of where China stands," Levine says.