E3G

Europe’s World: An EU-China pact is key to a global climate deal

By Nick Mabey

The new housing that will be built in China between now and 2020 is equal to all the existing housing stock in the EU-15; European housing will help drive emissions growth in the next 15 years. Acting together now to improve efficiency standards would help avoid locking in inefficient housing with high CO2 emissions for the next half-century.

China and Europe will dramatically improve their chances of achieving energy and climate security by finding concrete ways to work more closely together. Their cooperation must be concerted and transformational if it is to affect global economic and political conditions, going beyond the confused plethora of small, nationally driven projects that currently dominate EU–China energy cooperation.

Building “low-carbon economic zones” (LCEZs) in China was one of the initiatives proposed in the Changing Climates report of November last year by Chatham House and E3G. These LCEZs would be formed at prefecture level (30-40m people) and would provide testing grounds for new technologies. LCEZs would be magnets for attracting investment in research and high-end manufacturing, which is consistent with the Chinese leadership’s desire to move into higher added-value industries. The LCEZs could be to China’s next industrial revolution what Shenzhen was to the current one – and they would be a powerful demonstration of the viability of a low-carbon economy. The EU could focus its energy and climate cooperation around these zones so as to demonstrate to other countries the reality of large-scale transformations.

China uses coal to generate around 80% of its energy needs – a uniquely high percentage, coal use is likely to increase in China and also in the EU as both seek to reduce fuel imports. Europe and China should therefore radically upgrade their existing cooperative programme on carbon-neutral coal power though the development of carbon capture and storage technology, and should have a full-scale demonstration plant in operation by 2012 with a further programme of technology development beyond that.

Because China now manufactures such a vast array of goods for Europe and elsewhere, adopting world-class standards for energy-efficient goods would bring clear benefits to all. Under its Eco-Design Directive, the EU will be setting increasingly tight energy efficiency standards, and China and the EU could drive progress in both their markets by setting up a consultative committee to define challenging standards for energy-efficient, low-carbon goods. This could be coupled with the introduction of an EU–China ultra-efficiency building research platform to drive new technical and development opportunities in this fast-growing sector. Other opportunities for EU–China cooperation include developing a low-carbon free trade and investment agreement.

Fulfilling this vision of a truly transformational approach to EU–China collaboration clearly implies moving away from today’s endless jostling over trade issues, and an end to the kind of political rhetoric that feeds exaggerated fear in Europe of Chinese competition. To win political support for removing barriers to trade and investment in climate-friendly goods, services and technologies, we need to focus much more on the potential benefits rather than on the costs of low-carbon transition.