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U.S., China end talks with smiles but no progress on climate change

President Obama is pushing for an agreement by December, but China resists committing to limits on greenhouse gas emissions. Chinese officials also express deep concern over the U.S. budget deficit.

July 29, 2009|Jim Puzzanghera And David Pierson

WASHINGTON AND BEIJING — Relations between the United States and China are getting cozier as their battle against the global recession has drawn them closer together. But things aren't quite so warm when it comes to some hot-button topics, particularly climate change.

U.S. and Chinese officials ended two days of high-level talks in Washington on Tuesday still at loggerheads on the issue, a top priority for President Obama. Global warming got little attention during the Bush administration.

China is resisting a push to commit to targets for reducing greenhouse gas emissions and to open its market to U.S. clean energy technology.

"China and the United States are different in their stages of development, national conditions and historic footprints, so I think they should shoulder different responsibilities in tackling climate change," Zhang Guobao, president of China's National Energy Administration, told reporters.

It's just one of several areas in which U.S. and Chinese interests are at odds despite all the smiles and signs of mutual respect before the cameras as the Obama administration hosted its first Strategic and Economic Dialogue.

Chinese officials, for instance, expressed deep concern about the ballooning U.S. budget deficit because of fears that the inflation that could follow would erode their huge investment in Treasury securities.

Treasury Secretary Timothy F. Geithner said the Obama administration shared their concern. He and several top economic officials, including Federal Reserve Chairman Ben S. Bernanke, assured the Chinese that they would rein in the deficit as they scaled back the stimulus and bailout programs.

"Our central banks have moved very aggressively to provide support and provide liquidity to markets. That basic strategy, I think we agree, is the necessary path to recovery," Geithner said. "But China, like the United States, understands that as we see recovery take hold, we're going to need to reverse those exceptional actions."

The two nations have time to work out tensions over the deficit, as well as human rights, nuclear proliferation by Iran and North Korea and the need to make the Chinese economy less dependent on exports to America. But the U.S. and China are approaching a deadline for progress on climate change. U.S. officials hope to have an agreement with China in time for an international climate change conference in December in Copenhagen.

"We're slogging ahead," said Todd Stern, the Obama administration's special envoy for climate change. "There is a lot of ingrained and embedded perspective on this issue that goes back now for 15 years. And . . . I'm not going to kid anybody; I don't think it's easy. But I do think that we will get there."

Secretary of State Hillary Clinton announced that the two nations -- the world's largest producers and consumers of energy -- agreed to "enhance cooperation on climate change, energy and the environment." China helped move the process forward by explaining what it was willing to consider and what investments it already was making in clean energy, "which I'm not sure is as fully appreciated in our country as it needs to be," she said.

With more green technology, China believes it will be better positioned to compete in an increasingly environmentally minded marketplace. Despite huge gains in solar and wind technology, China still needs know-how in areas such as carbon capture, waste-heat recovery and concentrated solar.

Beijing contends that the U.S. should share the technology if it truly cares about limiting climate change.

But American manufacturers worry that the transfer of research and development will lead to cheaper Chinese products flooding the market. That concern was addressed in a provision of the House climate bill that prevents imports of such products from nations that fail to sign emission caps.

"China is obviously very quick to copy global standards and even emerging technologies," said Ron Mahabir of Asian Cleantech Capital in Singapore.

China, like the U.S., knows that no international climate-change treaty will work without its participation. That has given Beijing leverage at the negotiating table as it calls for more financial support and greater commitments on the part of the developed world to cap emissions.

The gulf in expectations is dramatic. Beijing wants industrialized countries such as the U.S. to cut pollution by 40% below 1990 levels by 2020. The climate-change bill in the U.S. Senate would achieve only a 4% cut over that period.

But it is its right, China contends, to urbanize and raise living standards for its people to levels long enjoyed by the West. Such large-scale urbanization, which China is undergoing, increases prosperity and economic growth but results in greater energy consumption and greenhouse gas emissions.

The promise of prosperity is also the basis of Beijing's legitimacy, making talk of limiting economic growth exceedingly sensitive, experts say.

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