Atlantic Council

Chances for successful United States-China cooperation will be significantly enhanced if China and the United States establish an Implementing Mechanism for Cooperation (IMC) that utilizes existing cooperative mechanisms and involves the top levels of both governments.  The recommendations in this report are the findings of a dialogue hosted by Atlantic Council on U.S.-China Cooperation on Low-Emissions Coal Technologies in Beijing from June 24-26.  This dialogue was held in collaboration with the U.S./China Energy and Environmental Technology Center (EETC), an initiative of Tsinghua University and Tulane University.

Executive Summary:

This new implementation mechanism should act as a government-to-government framework to facilitate bilateral initiatives in the public and private sectors. This framework will lower uncertainty and risk by promoting best practices and facilitating collaborative clean coal research, development and demonstration. However, for this new framework to be successful, it must be both properly endowed and operate over the long term.

The initiation of such a mechanism will need to be supported at the highest level of government. With the U.S. and Chinese governments evidently committed to greater cooperation, there is an excellent opportunity to create a solid, well-structured framework that will ensure vibrant economies while facing environmental challenges.

This overarching recommendation regarding the IMC should be back-stopped by a series of detailed actions to be undertaken by both countries. In the near future, this report recommends that China and the United States, together, undertake a follow-on dialogue to create a U.S.-China road map regarding CCS to address:

• Joint coordination of the R&D being done in both China and the United States with regard to lowering capture costs;
• Coordinate policy and capacity building efforts to facilitate deployment and intellectual property sharing;
• Develop an agenda to “cross-breed” the FutureGen and the GreenGen projects to maximize the resources the public and private sectors are dedicating to these CCS programs.

Other key issues the U.S. and China should address include:

Funding

• Accessing expanded World Bank funding of the Global Environmental Facility;
• Coordinating efforts to ensure CCS projects are included in the Clean Development Mechanism (CDM) and/or are eligible for certified emission reduction credits in global agreements;
• Establishment of a significant global fund to support international research and development of technologies that could be jointly owned.

Lowering Costs

• Development of a long-term joint research program that specifically focuses on reducing the capital cost and energy consumption associated with CCS;
• Develop standardized designs for CCTs that could significantly reduce capital and operating costs.

Intellectual Property Rights

• Create a platform for U.S. and Chinese industry to establish joint industry partnerships; for many companies, concerns over intellectual property rights (IPR) are no longer inhibiting the desire to form partnerships;
• Develop an energy sector, or sub-sector, approach to resolving concerns over intellectual property rights. Chinese industries and universities are rapidly developing new technologies that need to be protected.

Standards and Benchmarks

• Establishment of common benchmarks to support “best practices” in the operation of coal fired power plants;
• Build on the regulatory analysis undertaken by World Resources Institute (WRI) to establish regulatory “best practices” that could be applied globally; aim to establish procedures that would allow “fast track” permitting of new facilities;
• Common and/or compatible standards should be established for plant performance and the measurement and monitoring of emissions in order to facilitate the two way flow of technology and investments.

Partnerships

• Enable Chinese companies to participate in U.S. Regional Coal Sequestration Partnerships (RCSP) Program, and U.S. industry to expand joint ventures in China, with the appreciation that China has the potential to develop IGCC plants at lower costs than U.S. industry;
• Systematically expand the content and number of institutional partnership relationships between national laboratories and universities. These should be designed to provide for longer-term fellowships to enable participants to gain an understanding of each other’s cultural structures and administrative systems as well as to gain from cross training in technical subjects;
• Collaborate on helping China to develop appropriate monitoring and verification systems for GHG emission reductions as a result of China’s myriad policies and programs. The Unites States can impart its experience with related monitoring equipment, technologies and best regulatory practices; help train professional staff in this area; and demonstrate transparent and effective communication, auditing and reporting systems.

Technology Developments

• Formally establish a database of potential geological storage sites for CO2 . Utilize existing petroleum industry expertise in development of the database and in particular help China to improve its data collection and information sharing capabilities;
• Design and establish programs to explain the necessity and benefits of CCS and other CCTs, including the interface to long-term energy security and other pollution objectives;
• Develop a clear game plan for developing pre- and post-combustion technologies recognizing the two approaches require separate research and development paths. There needs to be more than the identification of a few jointly funded projects. Clear timelines need to be established and progress on a comprehensive program monitored. There will be earlier progress on pre-combustion while post-combustion is not likely to be available until after 2020. Jointly develop and demonstrate integrated processes for removing SOX, NOX, mercury and particulate matter along with capturing CO2;
• Determine if there are opportunities to jointly research and develop novel approaches to sequestering CO2;
• Establish a procedure where by industry, national labs and universities can interact through a Secretariat of the IMC to present its senior officials with breakthrough concepts and technology developments.

Overall, there are more similarities than differences between China and the United States, creating opportunities for collaboration. The fundamental solutions to a low carbon economy are being described in the same way in both countries: start with energy efficiency, use all coal, oil and gas resources, accelerate use of zero emissions energy sources such as nuclear and renewables, and ultimately use coal with CCS. The basic agreement on the path forward presents a true opportunity for collaborative efforts between the United States and China.

Related Event:

• U.S.-China Cooperation on Low-Emissions Coal Technologies

Related Publications:

• U.S.-China Cooperation on Nuclear Power
• U.S.-China Cooperation on Clean and Efficient Transportation
• U.S.-China Energy Security Cooperation Dialogue

Photo credit: Reuters Pictures.