US-China Strategic and Economic Dialogue: Pledges of Greater Energy Market Transparency and Energy Supply Diversification

Climate change was not the big news it was a year ago at the US-China Strategic and Economic Dialogue (S&ED). This is not surprising given that China made its major commitment on emissions reductions – its 40-45% carbon intensity target by 2020 – last year and US climate legislation is pending in the Senate. But many of the key players on climate change, including Secretary of State Clinton, her Climate Negotiator Todd Stern, and Department of Energy Assistant Secretary David Sandalow, were at the meeting. Energy Secretary Steven Chu stayed in the US to address the Gulf of Mexico oil spill, but his Department co-hosted three major bilateral seminars on energy efficiency, renewable energy and biofuels after the S&ED.

The outcomes paper from the S&ED lists a number of energy and climate-related outcomes. On climate change specifically, the document simply “welcomes progress” under last year’s bilateral memorandum of understanding. In contrast, much of the energy language is more specific. It includes new efforts on both shale gas and nuclear energy, and a host of renewable energy technologies. The statement also announces a new website for the 10 Year Energy and Environment Framework.

The State Department also signed a joint statement on energy security. While not a climate or clean energy agreement per se, there are several points that could prove useful to advancing clean energy and climate change policy goals:

  • The statement stresses the importance of transparency in energy markets and pledges cooperation between the US Energy Information Agency (EIA) and the Chinese National Energy Administration (NEA) on improving the collection and analysis of energy production and consumption data.
  • The two countries support “diversified energy supply” and stress the importance of clean energy in this diversity. They commit to cooperate on a range of technologies from energy efficiency to nuclear power, and they commit to diversifying the energy supply of the vehicle fleets (including electric vehicles).

Immediately following the S&ED, DOE kicked off three bilateral energy forums with a number of Chinese ministries. The National Development and Reform Commission (NDRC) was the main co-host for an energy efficiency forum, while the National Energy Administration (NEA) hosted a renewable energy forum and a biofuels forum with both DOE and the U.S. Department of Agriculture (USDA). As part of the energy efficiency forum, Lawrence Berkeley and Oakridge National Laboratories signed an agreement with a consortium of Chinese universities. Also at the efficiency forum, NDRC’s Vice Chairman Zhang Xiaoqiang catalogued China’s progress thus far reaching its 11th Five Year Plan (2006-2011) goals, already surpassing its 10% SO2 reduction goal with a 13.1% reduction in the first four years, but also still struggling to meet the 20% energy intensity target, with he said a 14.4% reduction in the first four years. Zhang said it was going to be difficult to meet the target, but emphasized the new measures and targets the Central Government has announced, and said that poorly performing provinces would be subject to greater scrutiny. U.S. Ambassador Jon Huntsman emphasized the high priority both the U.S. and Chinese Presidents have placed on clean energy as a “centerpiece of the US-China relationship” along with more traditional issues like regional stability, nonproliferation and the economic recovery.

Launching the renewables and biofuels forums, NEA Administrator Zhang Guobao emphasized that China is interested in cooperating on the full range of renewables, including both cutting edge technologies and technical cooperation in areas where China has met challenges, such as integrating wind into the grid. He also specifically noted that China had dropped its previous local content requirement for wind projects. The opening ceremony concluded with a number of deal signings between US and Chinese renewable and biofuels companies. This follows a major clean energy trade mission led by Commerce Secretary Gary Locke last week.

Photo by Vlastula, courtesy of a Attribution-NonCommercial-ShareAlike 2.0 Generic license.