 Good afternoon and welcome to our event U.S. and China Energy and Climate Policy and G20. My name is Frank Jozzo. I'm the Director of the Center for Climate, Economics and Policy here at Crawford School. That's our website. Send us a message if you'd like to be on our mailing list. Just like to take a second to acknowledge the traditional owners of the land. None of all people there elders past and present. Now international climate policy is clearly ramping up in the lead up to the UN Secretary General Summit in New York in September also in the lead up looking a bit further ahead to the Paris 2015 December 2015 climate conference which is meant to come up with an agreement for the post 2020 international climate regime. In Australia the debate has really still largely been subsumed by the shorter term policy issues such as the carbon tax, the emission reduction fund, the fight over the renewable energy target, the question of whether and how we might meet a 5% target at 2020. These issues of course matter greatly but I would argue more for how they're setting our country up towards meeting or not meeting the climate change policy challenge throughout the 2020s and 2030s rather than over the next five or six years. So questions are will we modernise our economy and energy system or will we try to cling to the past model. Major powers are moving on thinking about the next decade and beyond and about climate change commitments to 2030. All countries are called on to submit their nationally determined contributions to international climate policy in the first half of 2015. And increasingly I think it's fair to say climate change policy is not seen as something environmental but a question of economics, of the quality of economic growth, a question of energy security and also a question of strategic positioning. Who will be the dominant energy suppliers in a world that may opt for low carbon pathway who will be the suppliers of new energy technologies. The Obama administration of course recently and we will hear about that in our second talk today has put forward a plan to regulate the power sector to achieve a targeted 30% emissions reduction at 2030 relative to 2005 in the US power sector. Europe has put on the table a target of 40% reduction in emissions at 2030 relative to 1990 approximately equivalent to about 35% relative to 2005. And perhaps most importantly China. We see very strong statements out of Beijing these days on climate policy, on energy policy. It seems to be a strong commitment to limit carbon emissions especially limiting the use of coal with a very proximate driver, the air pollution in major cities but also broader concerns about energy security and ultimately climate change as well. Now pressure is increasing I think it's fair to say in Australia to somehow come to the party or at least make clear what the position internationally is and one manifestation of that quite apart from the kind of discussions that we've seen between the Prime Minister and President Obama. One manifestation is that international partners are calling for climate change to be included on the agenda of the G20 Leaders Summit meeting in November and November. Now to discuss all of these issues we've got five eminent experts here today. We've got Dr. Fu Chiang Yang who is senior advisor to the US Natural Resource Defense Council on climate change. Dr. Yang was previously Director of Global Climate Solutions at WWF International and he's got a very long experience in involvement in energy and climate change matters. He worked with China's Energy Research Institute and other institutions before moving to the US in the 1980s. We've got Mr. Matt Murray here who's Economic Affairs Counselor at the US Embassy in Canberra and who has also spent a number of years in diplomatic postings in China so he knows very well about both countries that we're discussing about today just as Dr. Yang does of course. We're fortunate also to have our colleague Professor Hugh White here who's Professor of Strategic Studies at ANU and whose interests include the development of US-China strategic relations. He's been senior advisor to several ministers and prime ministers in the past and has been very visible in the Australian international debate about strategic aspects around the China-US relationship. We also have our colleague Professor Hugh White from Fenner School of Environment who has recently published an article in Nature Journal on China's urbanization and she will provide us with a perspective on the question of urbanization and how that relates to energy and climate change challenge. And finally we have Mr. Paul Tony who is WWF's National Manager for Science, Policy and Government Partnerships and Paul is involved in the preparation and putting in place of the C20 Summit which is taking place I think later this week in Melbourne. So this is the Community 20 Summit the aim of which is to provide community organization and for community input into the G20 deliberation. So the way we'll handle this today is we'll have presentations all five presentations up first and then we'll have I think we will have plenty of time for for discussion Q&A panel discussion at the end. So without further ado let me call on Dr. Yang and welcome. Thanks a lot Frank for your kind of introduction. Today I would like to introduce what is China energy issue and climate change and China now is the largest energy consumption and producers in the world. Also is the second largest economy in the world and if I summarize my presentation I would like to focus on the on the four point that is in the top of Chinese agenda and first is energy security and second is energy transition and particularly is a stimulate development for the renewables and other clean energies and third one is that this is quite important is face out the fossil fuels and fourth is related to the energy related to climate change and Chinese the position is towards to the climate negotiation and action in the domestic and I think that I might focus today. And from this slide you can see the Chinese government have put in a very conservative GDP growth rate but actually the GDP growth rate is a much higher than the Chinese government determines and you can see the green line is the government determining the GDP growth rate in the every five years but actually the GDP growth rate you can see the yellow line actually is much higher. So in the last decade that you can see the Chinese GDP annually is growth is about 9.8% and that is the driver energy consumption is a much higher and that is the very concern is about all the pollutants and the CO2 emissions and but now the China the GDP growth rate now is a slow down very significant and that's a you can see that is a help for the CO2 emission reduction and energy consumption and put energy efficiency and renewables. From these slides you can see the China the last decade energy consumption is increased significantly and particularly for the coal. Coal is still dominating and in the 1990s and coal consumption is reduced but however another the economy booming and drive the coal come back again now coal is account 66% of last year in the total energy mix and others clean energy you can see oil and and still is about 18% and but gas is only 5% and renewable is 8.4% and so now the question is that we try to focus in the two areas and first is reduce the coal consumption and for NRDC now we have studied we call the coal cap in China that means when the China coal consumption will reach the peak point and then decline and we think that is quite important if China cannot get rid of the coal and so any you know you change the economy structure you have a low carbon green economy or if you protect the environment and protect the public health that is only impossible to do so another is that we China like to develop a more gas that is intermediate energy but in the future and that's it we like to see the high penetration development for the renewables and for coal consumption you can see China now is a cause a lot of problem for the environment particular for the air pollution and P2P PM 2.2.5 and that is a popular world to use in China if you search the newspaper or other you know people concerned and that is on the top three and so you can and public is a company and very loudly so that's driven the government have to concern reduce the PPM 2.5 and that's a now Chinese government does issue very strong regulation to limit PM 2.5 but however behind that 2.5 emissions and that is the coal consumption you can see from this picture in the Beijing area and this is a dirtiest capital in the world and so we think we have to change so in the next 10 years if you travel to China you still not see the clean up for the air so you can see China still the energy still is a dominant by the coal of course in the city and and transportation area is also is a major concern but for us is that you know this is across national wide so that issue is the coal consumption and we have a study and before seven years ago we work with Greenpeace China and to carry out study and this study shows us the total losses and damage of the because due to the coal consumption is about 7 to 9% of total annually GDP so that is a lot and recently we carry out study and we like to see what is this kind of loss and damage in 2012 and so recently the study will show us maybe if we stop the co-consumption that annually losses will be profit will increase and for the for the cities we concern about transportation sector and China for the coal buy it you know the sale before couple years of before is about 30% of increase annually even the economy go to lower lower growth rate and you can see the car sales still is a 17 or 15% and that is a large and so China now will import more oil from outside China to support the growth in the transportation sector so the energy security now is that become top of the policy in in China in Chinese government you can see oil actually now is a count 55 or last year actually is a 58% of the oil is imported and for the for the natural gas now is a 30% and for even for the coal China is a rich in coal resources but still in a coastal area import coal and that's the annually is increased to the 300 million tons of coal imported most from Australia and even including the US in Indonesia and other countries and so in the future and if we are not surprised by the 2020 if oil and natural gas is an oil increase to the to the 65% and natural gas to 40% or even increase in the coal and you know so don't surprise in the future maybe the reliance on the imported petroleum will be more than US US I guess in a historical highest is about 67 or 68% 65% but China I think 2030 property will be 30% and we have a story and now in US we can see the shell gas is a change the map of the oil energy supply and demand but they have a some prediction so US by 2030 will become net energy export but this is uncertain but we don't sure this will happen or not but for China and India will import a more energy that's either for sure so what is the energy map in the in the in the world and you can see that Asia now is a dominate for the energy consumption and production and so in the future and we like to see the Asia become the center of the energy consumption in the world so we have a joke we say how about the IEA their office have to move from Paris to Beijing or to Tokyo and because you know I think in the future they don't function well because no India and China or other Japan you know participate you know this you know the IEA and or if no Nuber if the IEA don't change their rules and they will lost their function so what is Asia in the future so we we think now is a question we think about what is we can do in Asia this is a map about what is countries in this Asia because in the in a culture in organization in in a sports or others actually actually is a kind of unity and is a unit and they can people can work together government to work together and find solutions for the common challenges and so we think if in this case how about the Asia energy in the future and if we see the oil the left hand is the oil production and consumption you can see actually they have actual oil can support Asia demand for the oil and natural gas almost but also for the coal but coal reserve in Asia is a big but international coal that the trading is the price is a more competitive so so for the Asia they will import more coal and so in this case they have a two uncertain factor I would like to you know mention one is what is Russia and what is Australia and because Russia you know domain that territory and they actually is a belong most part of the land is in Asia so I think it is because now the tension between the Asia the Russia and EU and United States may be forced Russia you know move to the Asia to the east and for Australia and I guess they have a much close tie with Asia so we if we put these two figures in this we can see actually for this reason can be balanced so we like to see in the future in the in the Asia we like to see they have a kind of is a physical organization can be established to deal with the supply and demand rather than say they have attention or they have a struggle between the IEA and OPEC and so so we like to see this can work or not these kind of strategies the producer the export export and the import and consumers and what they have any new policy and regulation can is that is that is to avoid a kind of fighting or conflict between these two groups and for China I think is to replace coal we have to develop a more natural gas and share gas is a has is a rich resources in China in the estimation is about 25 trading BCU is a billion cubic meters so I guess that is a lot is modern but based on the US or Chinese estimation is a little bit more than US total reserve in the share gas but in the share gas development we have to concern about the environment particularly for the water land evolution you know you know method leakage or the community and noise or other CO2 emissions so so we think if the method leakage is about 4% in the share gas development that is not worth while for the development natural gas because that's a you know to replace the CO2 emission from coal it doesn't make sense and but unfortunately in China you can see these slides and the the share gas and the coal reserve actually is overlapped with this area they have water scarcity and so that's if you develop the share gas you use more I have been the few and to check what is the natural gas development in China in Sichuan area and we find out China the share gas development will use more water than the US and based on the status data and they have you know in US 25% or 30% the water will come back to the now but China actually if you put water in for the fracking but disappear so so that's means so that's mean China will consume more water for share gas development and so that is a challenge and for natural gas you can see this map and China will form more from the Asia central country and that's a you know by 2020 is a is about 80 BCU and that's pipeline natural gas from that area and in the southern China you can see from Burma and that is 12 BCU annually and from this area and and how about Russia so now is a is a big concern about the relationship between Russia and China but I I will say don't think this is a political issue yeah this is a some kind of that but also is a economical and energy issues and so signed a long term contract and that's a that's have you know media interest and report a lot and from this map you can see the China in the east part annually they will China will import about 38 BCU now is the negotiate of about the west part and that is about the 30 BCU so total that is about the 70 BCU and annually but also these two parts I have a oil pipeline so that's a about the 20 to 30 billion 20 to 30 million ton of the oil will import from Russia so we we we can see if the tension between the Russia and the EU and the US will not deal can now settle down and Russia definitely will move forward to the Asia and for renewable everybody say yeah China consume a lot of oil and coal and how about renewable actually China is a is a number one renewable development in the world and you can see at annually and Chinese government changed the target and for the for the renewables for instance for the cell for the solar PV and now by 2015 that is about the 35 giga gigawatt for solar TV and but maybe this year and all next year China will exceed the Germany become a number one for the solar PV and in the future you can see you know the renewable will will come share a significant part of the energy consumption mix and total investment is more than 50 to 60 billion US dollars annually and but that's it will increase in the future and now we study about how what is a renewable high penetration in China and so we like to see by 2030 27% of renewables will we are counted in the total energy means and 2050 actually dominate and can be 50% or not at least is a 40% if they are 40% and the coal consumption will be lower than the 30% or other will be oil and natural gas so so that is the why if from these slides you can see the for the wind and that's a blue color actually is the number one in the world and so for the power generation even for China we say 2030 they have a no-new coal fire power plant but we don't think this is the true concept it how about 2025 they are no-new coal fire power plant so all of these will be will be filled in these energy demand is by the natural gas or by the renewables and how about the climate change everybody know China is number one in meters in the world and they have a many study to show and China have to do a more more activity to reduce CO2 emission and before they have a many study and see the China property will get peak for the emission by 2030 now 2035 now most Chinese experts get consensus maybe 2030 and so you can see the routers have a report the Chinese experts they say actually I think 2030 is a conservative target but what is a recent study and that is a based on our study and you can see scenarios is a 2040 but if we have a two degrees scenario and that is a 2020 but if we have a you know more aggressive one and 2025 is a property but in here I would like to say maybe between 2025 to 2030 is more safe for me and to say we will reach the peak point but we like to see 2025 and so that is a give Chinese the how can you establish strategies to reduce the CO2 emission we so we we think use the market the mechanism maybe that is that works because for the Chinese government traditionally they like to use administrative forces and to force the business circle and ask the public to support their business policies but however for China now is a established ETS in the five cities and in the two provinces and so far we cannot say is a is successful but we can say probably for myself I'm more conservative I will say 50% is successful even 50% failure but say I will say that is a more valuable experience we can learn if we cannot learn from the failure but in the future maybe that is dangerous for national ETS levels but if we can learn from our failure so that the lessons we can get that is a much more helpful is much more valuable so now in China because for the pollution and they will expand these cities to the region for instance in the Beijing Tianjin and and that's is a oops so that is a very close and we we argue is a city maybe the boundary is too small so now they will expand to the Hubei this area so in this area so we can see more and if we can also get more lessons from regional and so we like to see in the in the 2020 can establish the national ETS level and for the Chinese government officials they even say in the following three years they can establish the Chinese national ETS but I will say probably not and because China is so big our legal system our data system our you know the MRV system or our system is not ready yet that's slow but not stop is better than too quick so so I think by 2020 if China can build up this kind of ETS in the national level so I think that is in the world that is the biggest the market and China now urbanization is go very fast in the 2030 and 70% of the people of the population will live in the urban area and so now challenge you know for other developed country their challenge is one by one in the one period they cope with this challenge to find solution for that and for instance for the pollution in the 50 60 70s and then they find other water solution and now climate change but in China all these challenge is together so we think is a for instance for the direct countries they only in the population get to the 70% in the city they think about the world is a low carbon green city but in China we say how about our city population is go to 65 or 6% can we make this city become much green and no carbon so so that is a challenge we cannot wait until that if if they're in this case if we cannot find solution for cities also we have no way to get solution for the nation and for the Chinese position in the climate change negotiation everybody is a is a very interest I think is a China now China EU and US that is that we call this is a gold tree triangles so now the question is how about these three countries or unity or union and they can make a contribution for for the climate change negotiation now you the president Obama have a more aggressive you know that a plan for the for the power plant sector and for you that traditionally and that is like to play leadership in a negotiation for China usually there in the 1990s they are very conservative they say this is not job and we like to see what is that you have country demonstrate they play leadership cut CO2 emissions but now suddenly they become a number one in the world they have to adjust themselves what they can do about it and so for Chinese government actually down is in the in the top concern and for the for the Mr. she doesn't want his chair of the Chinese delegation he said in that in the March next year the leader Chinese leaders will we'll say something about the ambitious that's called his world ambitious power plant so we open our eyes and see what is the ambitious Chinese the plan for the put on the table for the 2015 Paris and negotiation but I think is a China now I like to encourage China to play leadership but leadership in in the Chinese world is not so positive and sometimes it's a you know understand so in for the Chinese traditional they like to see I like to behind the leader you know so so I like to watch what he did what he did something as successfully something wrongly and so I can do something better than yes so now suddenly he's in the front so we like to see Chinese government play leadership thank you very much yes hello everybody I'm very happy to be here day and you thank you very much Frank for the invitation and it's really an honor for me to be on the panel with Dr. Yang and Dr. White Dr. by and Paul Tony from WWF it's really a great group that Frank is pulled together so in the the time I have a lot of today I don't have a PowerPoint we can leave that one up there but the I really want to cover four things the first is you know some of the progress that we've made domestically in the United States on combating climate change and addressing reducing carbon emissions second how we see the upcoming international climate negotiations and the other sort of multilateral things that we do to address this issue third I want to hit on our climate specifically on our climate cooperation with China and the work that we're doing there and Dr. Yang's already alluded to a lot of that and fourth really set to the opportunities we see where we can engage in the G20 but the basis for all of this really is President Obama's client climate action plan which probably many of you have seen taken a look at it was announced in June of last year when the president said you know we really want to basically up our game to the next level on addressing carbon emissions in the United States as well as working with international partners to address the issue globally and what in the president's words he said that you know America stands at a critical juncture to help put us and the world on a sustainable long-term trajectory on climate and as all of you probably know the president's already made a commitment in 2009 that the United States would reduce greenhouse gas emissions by 17 percent over 2005 levels would do that by 2020 so you know this is really the the task before us the climate action plan has three parts it aims to cut carbon pollution in America first and foremost to prepare the United States for the impacts of climate change and third to lead international efforts to combat global climate change and prepare for its impacts the good news and there is a lot of good news is that in 2012 carbon emissions from the energy sector in the United States fell to its lowest level in two decades so from the time I was in the seats that all of you students are in until now about 20 years we've we've hit that we've gone back to that level and at the same time America's net oil imports have fallen to their lowest level in 20 years as well and as Dr. Yang indicated we hope to be able to become energy sufficient here in the near future the bad news though is that there's still so much more work to be done if you've seen the national climate assessment that came out in the United States just last month indicated the climate change already is a you know is happening across the United States and many Americans are feeling the effects in a variety of ways on the domestic front and in terms of what we've been able to do domestically in the United States if I could just leave you with one key point today it would be that there has not been simply one key silver bullet to addressing these issues and reducing carbon emissions the climate action plan as well as the president's all of the above energy strategy both attest that there are many many ways the United States is working on reducing emissions in pursuit of a clean energy future and our ambassador John Berry highlighted a lot of these when he was in Melbourne last month at the Australian emission reduction summit the Carbon Market Institute hosted in in Melbourne and and we need to continue to work in these areas you know if I could just highlight a few of them the policy includes cutting carbon pollution for power plants you know we've more than doubled electricity generation from renewables we've increased government funding for clean energy innovation which we see is very important we've increased fuel economy standards because vehicles are such a large part of the problem in the United States we've developed advanced transportation technologies reduced energy bills through efficiency upgrades energy efficiency is obviously a very important part of all this we've curved the emissions of hydrofluoric carbons reduced methane emissions and worked on preserving forest resources so it's a very multifaceted approach it's not just focused on one specific area and on the first point cutting carbon pollution from power plants as Frank mentioned I mean it's important to note that you know we've again made some progress here recently in prioritizing carbon pollution from power plants which in the United States account for 40% of our emissions and the EPA took that stuff a couple of weeks ago announcing the Clean Power Plan which would produce a rule proposed a rule I'm sorry to limit carbon dioxide emissions from US power plants where we would work together with our states to reduce the emissions by further 30% by 2030 in addition as Dr. Young was just talking about the shale gas revolution in the United States has really changed things through the development of innovative technologies and and sound policy support to produce more natural gas and as we've increased production of natural gas it's obviously a comparatively cleaner source of energy and has also contributed to reducing emissions and and finally on on the domestic side I don't have time to go into it in detail today but it be remiss if I didn't mention that while these are the steps the federal government is taking there are also a number of steps that our state governments are taking in particular California and New York are some of the ones you read about in terms of their own very aggressive policies to reduce carbon emissions including in California emissions trading so on the international side I would point out that just as our domestic progress on reducing emissions is the result of advances in several areas so to the United States international engagement is a very multifaceted approach so in 2009 President Obama helped launch the major economies forum on energy and climate which is the high-level forum that brings together 17 countries that account for approximately 75% of global greenhouse gas emissions and the goal of that forum is really to support the international climate negotiations and to spur cooperative action to combat climate change and one outcome of that of the map was the launch of the clean energy ministerial as well the United States also supported emission reduction efforts through other multilateral mechanisms such as the climate and clean air coalition to reduce short-lived climate pollution as well as promoting clean energy solutions through regional efforts like the USA's specific comprehensive energy partnership and of course as Frank and Dr. Young just highlighted the United States remains very committed to what's going on here to work through the UN framework convention on climate change to negotiate a new international climate agreement applicable to all countries by 20 in 2015 and to take effect in 2020 I think you said that the China word is ambitious we have three words the agreement should be ambitious inclusive and flexible and we really want to work with all countries through this process to make that agreement a reality and so I also want to highlight again because the topic of today I it's really critically important that the United States engaged bilaterally with emerging economies including China so I just want to talk a little bit about China for a second I'm definitely very passionate about US China cooperation on all fronts I spent seven years in China four years in Beijing three years in Shanghai then when I was back in Washington I was really focused on China for a couple of years on the staff of our under Secretary of State and it's really been for myself personally pretty amazing over the last 10 years to see how much we've opened dialogues with China on a whole range of areas economic environment energy related and to see you know how far we've come since 2004 really gives me a lot of optimism about the relationship in many ways Dr. Young already did an excellent job of you know outlining the challenges China faces in its domestic energy situation as well as the changes that the Chinese leadership is making to try to address those challenges and you know one of the things I learned during my time in China is that while it's always very easy sometimes to as an outsider criticize decisions that are being made by the Chinese government it's far more difficult probably to actually be the person that's trying to make these changes and to be the leaders in charge of making those changes so it would be tough to want to swap spots with Xi Jinping or Xi Jinping or anybody else that's really charged with making those those decisions because those are those are some tough decisions that need to be made certainly from the US perspective when we look and see that as the two largest emitters of greenhouse gases the United States and China really do need to play key roles in any effort to combat global climate change and you know President Obama and as well as Secretary of State Kerry since he came into office last year have really worked very hard to elevate climate change in our relationship with China during its first trip to China last year Secretary Kerry announced the launch of the US China climate change working group which then met during our strategic and economic dialogue in Washington last last July and which has continued over the course of the last year we are now engaged in a constructive and high-level collaboration with China on climate change including as many of you know a breakthrough agreement at the presidential level to phase down hydrofluorocarbons as well as concrete initiatives and key sectors and a dialogue about our post 2020 plans to limit greenhouse gas emissions I think it's really important here too to go back to Dr. Yang's presentation which emphasizes you know how focused the Chinese domestic leadership is on this issue and which has definitely given us an opportunity to talk more with China about ways we can cooperate in the case of the air pollution indicator the PM 2.5 an interesting footnote to that is it was really the US Embassy putting an air quality monitor on it on the roof of its building several years ago when I was there that really started to get that conversation going which I think is something that we're all very proud of in the State Department and having played a role in in that kind of engagement which is I would say is you know a good example of 21st century diplomacy thinking outside the box a little bit and and the big thing too was that it involved using social media to get the actual scores on 2.5 PM 2.5 out which then was getting picked up within the Chinese population and that's where as well the you know there's definitely a focus in this US China discussion about the impacts of the impact of climate change on health the impacts of air pollution on health and how we can work together to really move forward the US China climate change working group that I mentioned is aimed at encouraging large-scale cooperation to address climate change there are five initial areas of cooperation under the working group to address some of the key drivers of greenhouse gas emissions and air pollution in our countries those include emissions reduction from heavy duty in other vehicles smart grids carbon capture utilization storage collecting and managing greenhouse gas emissions data and energy efficiency in buildings and industry all of which we think are very important so in short there I mean the United States and China together are really are taking important steps to curb greenhouse gas emissions and we welcome further cooperation to meet this challenge as well as working within the UNFCCC process finally with respect to the G20 you know as President Obama has emphasized 2014 is a critic is a critical year for action on climate change and leaders of the world's largest economies do have a responsibility to help galvanize action toward an ambitious agreement at the UNFCCC process that sets clear long-term plans substantially reduced emissions G20 leaders have said that the G20 will be the premier forum for international economic cooperation we believe that if that commitment is to be credible then they must take on the most important issues and seek common ground in international negotiations and drive concrete action at national levels the dramatic increase in time and attention devoted to climate in the US China relationship but I just outlined is further evidence of how important this issue is to two of the world's leading economies largest economies and just like promoting trade or reducing tax evasion or strengthening financial regulation addressing climate change is we believe a core international economic priority that we would expect G20 leaders to discuss I know that President Obama and Prime Minister Abbott just last week discussed the importance of the G20's leadership across the board including on climate during their discussions in Washington and we definitely want to continue to work with all G20 members on this issue so with that in the interest of time I'll wrap up here but I look forward to the panel discussion on your questions thank you thank you very much Matt I think that was very clear Matt's boss the ambassador gave a speech this morning across the lake at the Alliance 21 conference on the Australia US relationship that's a forum that's traditionally focused on security issues quite tellingly the first if I may call it the first substantive session this morning was actually on energy and in that session climate change policy low carbon policy kept coming up so quite significantly Matt regard so I've managed to do the introduction into security issues you're right the floor is yours well thanks Frank it's a great pleasure to be here and to join this conversation you know the premise behind a session today I guess is very obviously that as the US and China are the world's two biggest economies and all of that what we can do as a global community about climate change is going to be fundamentally influenced by what those two countries can do separately and what they can agree to do together and my contribution to the conversation is to just make some observations about how what that might mean what they can do individually and what they can do together will be affected by their relationship with one another and that is that relationship is both an extraordinarily important one and also extraordinarily strange and remarkable it's important of course because they are the two world's two strongest countries and will remain that way until India catches up with one of them and that might be quite a long time in the future and it's remarkable because we have what we've seen over the last couple of decades in the rise of China economically is the fastest and swiftest change in the distribution of power in the world in history and because power affects relationships in so many complicated ways this has an enormous implications for the kind of relationship they have the fact that that growth has taken place in China has absolutely been a product and has been able to take place so fast has actually been a reflection of the emergence of a thoroughly globalized economy without globalization China couldn't have grown as fast as it has and that means that the these two economies are deeply interdependent not just the economies the societies are deeply interdependent in ways that major economies have never been before to a degree that major economies have never been before but they are also deeply competitive and we've never seen in history the emergence of such if I can put it straight a classically competitive relationship between an established power and a rising power as we have between the US and China today in the context in which they are so interdependent with one another and there's no error area in which that interdependence is more prominent or significant than in the area of their response to the challenges of carbon pollution and climate change and I just want to talk a little bit about how that plays plays out I mean the good news is that we ask that that the US and China because of that interdependence and because of goodwill on both sides have a formidable capacity to cooperate we wouldn't be living in the world we're living in today if that wasn't so we wouldn't be living in the world we're living in today if the US and China hadn't reached an agreement about their nature of their relationship actually back in 1972 when Nixon went to China which provided the foundation for 30 years and for 40 years in particularly in the last 30 years a very deep understanding between the US and China about some shared objectives and and and understandings and so on and that has been extremely successful and in all kinds of ways as Matt said there's a formidable array of ways in which the US and China do cooperate and work well together and in a sense you could say that cooperation has made the world we live in today but there is also competition there and partly because I'm in the strategic policy business and therefore a bit inclined to be gloomy I want to talk about that competition and suggest a little bit about it where I think it's going and how I think it might affect the capacity to cooperate across the board and on climate change issues specifically the first point to make is that when people talk about the US and China as strategic competitors or rivals they tend to focus on a series of specific issues some weeks it's climate change it's it's cyber espionage some weeks it's crisis in the South China Sea some weeks it's crisis in the East China Sea but they look at a series of specific points or or problems or disagreements I don't think that gets at the nature of the problem because I don't think disagreements real and it's important though they are between the US and China on things like cyber espionage or maritime issues in the in the East or South China Sea I don't think they are the causes of the sense of strategic rivalry I think there's symptoms of it I think that's the causes lie much deeper and they go fundamentally to different views in Washington and Beijing and you might say more broadly in the two communities in America and China of their respective of the nature of their relationship and their respective roles in Asia what's been special and beneficial about the last 40 years since Nixon went to China is that there's been broad convergence between the US and China on that issue but what's what's been special about the last few years let's say the last five years is that that consensus has started to break down and it's broken down because the United States principle objective has been to preserve the status quo in Asia preserve the relationship the nature of the relationship which both accepted back in 1972 and that was an acceptable relationship based on US primacy as a foundation for the Asian order and just to be clear speaking as an Australian that's fine by me I'd like nothing better than the status quo to last forever but it doesn't seem to be fine by China big subject I won't go into it now but to put it briefly when President Xi Jinping says he wants a new model of great power relations I think he means exactly what he says that means he doesn't like the old model anymore it worked for them until now doesn't work in future China wants a different kind of relationship with the United States than the one the United States wants with China and not to put too fine a point on it China wants to be treated at least as an equal in China's terms what does that mean big subject for later but be treated as an equal in China's terms and the United States wants to preserve what American political leaders continue to refer to as leadership with a capital L I added a capital L but you know what I mean and the problem is that for both of them very deep questions of identity and status are tied up with those ideas and countries do terrible things to themselves and to one another in pursuit of questions of identity and status now that's not to say of course that I decide what I decide what's right for your competition they both want peace they both want cooperation they both understand how important it is to both of them that they preserve the pattern of cooperation which I referred to before but they both believe I fear that they can achieve their objectives in America's case preserving the status quo in China's case of reshaping the regional order quite fundamentally they both believe they can achieve that without risking rivalry and confrontation because they both think the other side is going to give way most Americans I believe don't really take China's challenge seriously and I fear that many Chinese believe that the United States are ready to use a bit of Australian vernacular to tap the mat and one can see why they might think that I think they're wrong to think that I might say but I can you can see why they might think that and so both underestimate the power and resolve of the other and therefore both underestimate the need to compromise with the other to step back from their preferred outcome and try and find a reconciliation with the other in order to avoid the clash that both would like to avoid I don't want to dramatize things but this is how wars start they don't start the good ones are usually they don't start the cold one side of the other things wouldn't a war be great they start because each side thinks that they don't have to give away things that they really value because I think the other side will step back so they don't have to think that's exactly the kind of problem we're facing between the US and China at the moment now I happen to think they're both wrong I happen to think the chance of either stepping back completely is very low I don't believe China will accept the status quo in Asia and I don't believe the United States is ready to step back as much as China would probably prefer that's why the risk of rivalry is very real it's not inevitable of course absolutely not inevitable there's no reason why the US and China shouldn't build a perfectly sustainable long-term relationship and which both sides can cooperate continue to cooperate very very effectively but it won't be on the basis of US withdrawal from Asia and it won't be on the basis of continued US primacy that will have to be on the basis that neither side really wants it's called compromise it's pretty tough but it's the only way to resolve these sorts of issues in the end neither side is strong enough to face the other down now of course whilst that process is unfolding cooperation on all sorts of specific issues is possible as we've seen I think we've seen quite clear evidence of escalating strategic rivalry on the one hand and increased cooperation particularly on issues of climate change just over the last four months or so in the way that Matt for example referred to so it's this is not all doom and gloom but it this context of strategic rivalry does affect the prospects for action on climate change both individually and collectively that is what each country will do about its energy position and what they will be able to do together and I think we could say this the four ways in which this could happen the first is that it will is the question about how they see their own economies and how willing they are therefore to take risks or to pay costs to to move to a lower carbon economy under pressure from economic competition with the other that is the political leaders have a lot of things in mind when I think about economic choices about the well-being of their citizens and so on but as strategic rivalry escalates between the US and China if it escalates then thinking about how their economy stacks up in relation to the other quite competitive zero some terms I think is likely to be an increasingly large world there's a risk that will be increasing large part of the of the picture now that how does that cut if people see advantages in moving to a low-carbon economy that low-carbon economy that might that might be good news they might compete that benevolently with one another to try and do better but if they see them as negatives then that could be a disincentive and I think there is a risk of that I might say I think that would be a particular risk in the United States because I think the United States is at some stage coming in for a shock if I might be wrong about this but I don't think I've ever heard a US political leader say the following words out loud before long China's economy will be bigger than ours and we will no longer be the biggest economy in the world now some stage some American political leaders gonna have to start explaining that reality to the American public and it might be a very scary moment and it might produce some pretty wacky policies the second is the question of energy security this is a very big subject in itself normally people in my business going about energy security a great deal I'm not going to say very much about it because I think for both US and China energy security is not actually that big a deal I think as long as they can avoid all that conflict the chances of either interfering with the energy flows of the other are very low and there's quite a lot of history behind that I won't go into it but I will say that questions about energy security nonetheless get mixed up with questions other questions about the energy economy in very complex ways particularly again in the US I think perhaps also in China to some extent a lot of the conversations in the United States about issues that most properly seen as related to climate change are mixed up with the US concern about energy dependent dependence on energy imports and this is a distraction I don't think the US really has an energy security problem at least not of that form but if strategic rivalry with China escalates concerns about energy security will come into the debate even more and perhaps distort judgments that might be better made in other ways the third is the way in which sense of competition will in could intrude into negotiations between the US and China about what they're prepared to agree to particularly in in Paris next year to the extent that there's a sense in a rivalry between them makes compromise harder and particularly harder to sell domestically in order to get a deal and I think this probably applies in both ways it's a bit more opaque at least to someone like me who doesn't profess to be an expert in Chinese internal politics but on both sides it'll be harder to sell significant compromises with the other side if there seem to be compromises with a country with which there are strategic rivals so for example if the United States has to accept to be more accommodating of China's argument that because of because America had 200 years head start with the industrial revolution China should be given more space than America is you can see how the argument about that in domestic politics in the United States the administration's capacity to settle that to the Congress and more broadly is going to be made harder the more China is seen as a rival and the trend over the last year or so there has not been positive if those trends continue it's going to be harder and harder for for American leaders to sell a compromise deal with China to their electorates and quite possibly in a more complex but perhaps just as real way conversely in the United in China as well and the last of course is the risk that rival returns into conflict I don't want to over stress this I'm certainly don't believe that that's in China is inevitable but it is not a negligible risk China and Japan are regularly risking a direct military confrontation in the East China Sea the chances of one of those incidents turning into an actual exchange of fire or loss of platforms is I'm going to give you a totally bogus piece of quantification maybe 5% between now and the Paris meeting if that happens then the chances of the United States of the chance of that escalating to a larger China Japan conflict is very high and if that happens the chances of the United States being drawn in is very high 80% or 90% in that case so the risks of an actual clash are not low and if that happens the chances of satisfactory deal at any other issue no matter how important it seems will go by the board so that is a significant factor now I wish I could finish my talk by giving you a snappy idea as to how we can fix that problem get away with it get away from it I haven't got that bit yet I'm afraid thanks Frank for inviting me to this event it's a great pleasure to be here as Frank just mentioned I'm not going to talk about energy or carbon but I'll be talking about one of the most important major sort of a transition or a process ongoing in China which has profound implications for energy and carbon emission that is discussed here which is rapid urbanization and I'll talk about it in particular in relation to the recently released national new type of national strategy which will be guiding China's urbanization process over the next until 2020 at the least first of all I would like to start with some background some of you might know that China has really been urbanizing rapidly in 1978 China has only 17.9 or 7.8% of people its population living in cities but by 2012 this ratio has raised to 52.6% well those numbers are just very dry statistics but if I say each 1% increase means 14 million population moving into cities probably that can give you a better idea what is the you know the magnitude and scale and speed and it looks like this process is going to continue until 2020 at least because the new type of urbanization strategy released by the Chinese government says that it is aiming to achieve a 60% of urbanization ratio by 2020 which means a 1% our increment each and every year until then so again each and every year we'll be having 14 million population moving into cities from the rural area so in a recent paper like Frank mentioned we published a paper in nature in this particular paper I argued that I think this particular process is the biggest if not you know you know it's one of the but it's not the biggest experiment in human history in terms of human and human resettlement well why do I say that it is because organization in China actually is not entirely natural sort of process usually organization happens by two sort of forces one is the poor factor and the other is the push factor the poor factor means the attraction of cities to you know the rural people people are attracted by the you know the neon light the job opportunity or the education opportunity that is offered by the city and the push factor is there you know in rural areas people cannot really have any livelihood anymore so there are these two factors that are working together which is driving this urbanization process usually but in the case of China and in several other Asian countries I think the policy factor is playing really an important role as a key driver for example China has been you know trying to promote the organization for the past about two decade and it is very determined to keep that position and probably even gear up a little bit Chinese the organization was has been the top sort of policy agenda in the new government since President Xi Jinping and Premier Li Keqiang took their office and there are a couple of sort of rational in behind this first of all I think organization and industrialization in China has been regarded as two sort of engines or sometimes translated as the wheels that carries the modernization and economic growth process in China and this is actually quite easy to understand because if you look at some of the developed countries and then look at their you know organization ratio usually they have much much higher organization ratio for example like OECD countries they typically have like 70 to 90 or even 97 98 percent of their population living in cities so it's quite natural for a developing country government think okay in order to achieve higher income we have to promote organization but as the distinguished to make because there's a difference between you know correlation and causal relationships so there has been a paper published in science in 2008 I think which was has conducted across you know country you know of course across the world about 190 country across the world sort of panel analysis grant you causality analysis I think looking at whether there's actual causal relationship between organization and income growth and then the conclusion there was that there wasn't any causal relationship between those two but then we question this conclusion because this is cross-country sort of conclusion not really coming from China particular country context so we use the same sort of method and then use a different sort of indicator organization and then we conducted the same analysis in China and our analysis actually shows in the case of China organization does have causal sort of relationship between with the income growth and there is a positive sort of feedback relationships between those two so it is quite sort of natural for the Chinese government think in order to achieve economic growth they have to you know promote organization and the second rational for the Chinese government to promote organization is that the Chinese economy has been following has been you know adopting this expert oriented sort of growth model but in order to avoid this mid-income trap they have to expand their domestic consumption base and it is quite natural to think about organization as one of the you know vehicle to deliver it because in China an average urban citizens earns about three times three point two times more than average rural population so it is quite natural if you move lots of rural population to cities and then try to you know assuming that their income level catch up with average citizens in the city then there will be a huge consumption power that can be released and third rationale behind this top governmental sort of priority is that organization is seen as a catalyst for regional development because in China each farmer has very much limited sort of agricultural land they have less than 0.1 hectare each farmer which is really small you know it's almost like a little larger than average sort of our you know residential lot in in Canberra for example so there are very limited sort of capacity for the Chinese farmers to achieve economic growth simply based on their you know agricultural production so by moving some of the poor rural population to cities it is suppose it is assumed that it can free up some of the land that they hold and then you know open the room for you know scaled up modern sort of farming practices so those are some motivation are behind why the Chinese government is really keen to promote urbanization in China and if you look at this rationale you can see there's one core element in it which is development but of course the Chinese government realized it and then they stress again and again that they won't do it in a sustainable sort of manner and of course they just have to do it in a sustainable manner for example like I have a couple of statistics here for example like 80% of world heavy crane are concentrated in the coastal China and about 40% of the world construction material are used in China so it is very you know quite natural for you to imagine you know the Chinese supply of construction material alone cannot really catch up with its demand so you just have to think about some of the possibility of doing it in a sustainable way and the Chinese government do have some plan about that for example the top five year plan says they will reduce about 30% improved like 30% of land productivity to you know preserve the land resource and then they will reduce 16% of energy intensity of its economy and then reduce 17% of common carbon emission intensity over during the top five year plan of course there's a catch behind this because if the income of the new residents that they do catch up with the you know the citizens the average level in cities then this sort of consumption power can really drive the economic growth but on the other hand they also have sustainability consequence there was a study I think published a couple of months ago which says that if the Chinese citizens consumption catch up with the level of USA for example then any sort of efficiency gain cannot really offset the growth in the absolute amount I don't really want to leave you with impression that organization is all bad in terms of sustainability or you know in terms of environment or in terms of carbon emission because organization is also an enormous opportunity because change is always considered as an opportunity if you look at the crisis the world crisis in China which is saying another crisis and then the opportunity staying together so rapid organization can be an enormous opportunity to introduce sustainable technology as well as sustainable practices at a sort of national scale and the latest organization plan for example that highlight couple of those opportunities for example it is aiming to drastically improve the share of green buildings in all new constructions in China from a 2% in 2012 to 50% in 2020 so you can imagine this is can be a drastic sort of improvement in terms of sustainability outcome and they are going to do this through improving their green building codes and certificate and accreditation system and making some of the adoption compulsory and also develop some of the green construction materials another example is that the plan also says they are aiming to improve the share of public transportation in bigger cities with you know 1 million or above population from current 45% to 60% by 2020 so this can be another significant sort of improvement and also they say they are going to improve increase the share of renewable energy consumption in cities and towns from 8.7% you know the current level 2012 to 13% and also from Professor Yang's presentation the current renewable energy consumption level is about 8.4% so currently the city's renewable energy share is a little larger than bigger than national level but it's interesting if you look at the 2020 level the national target is 15% but the city target is 13% now I don't know what is actually exactly behind this discrepancy but anyway they're aiming to achieve some sort of improvement there as well and also another target there is that the share of prefecture and above level cities that actually meet the national air quality standard will be improved from current 40% to 60% and I think this has significant meaning for energy and carbon emission because usually any measures that really targeted air quality improvement they also have energy and carbon co-benefit so I think it is really important to identify some of the innovative practices and try to build up transferable knowledge and you know facilitate cross-city learning because if you look at some of the fund runners in China and in other you know countries they can do some amazing sort of things for example like in Georgia city in China they have somehow achieved succeeded in proliferating the solar water heater to 99% of their citizens through very you know very sort of measures they can carry combined and you know awareness enhancing activities so if they do want to do something they actually can do something especially at the city level so I think this high-level policy intervention like the China's strategic plan for organization if they are done properly they can be a really powerful force for good but I think in order to succeed the Chinese government really need to adopt a tailored and really adoptive sort of approach that can engage with the local society and local environmental you know cultural sort of context and also allow some of the local innovations to happen another thing I think I picked up from that presentation talking about the US embassies initiative tries to publicize the PM 2.5 data in Beijing I think this actually highlights the potential of some of the growing middle class in cities they can really become a very powerful force that can push the Chinese government to take action to reduce the air quality the air pollution which will have co-benefit for the carbon and energy front and I would like to conclude this talk by really highlighting that cities are really at the forefront of this energy and carbon sort of debate which is very often under recognized there's a favorite quote I often quote which is by several UNDP administrator and you know Bill Clark at Harvard which says the battle for sustainability is lost or won in cities so I think we really need to recognize the positive and potential positive role cities can play in terms of climate change discussion and also better engage with cities in terms of you know how you can actually realize some of the goals that are set up by you know through some of the international negotiations such as the IPCC process thank you thank you Frank and thank you everybody for coming in that certainly a privilege to be on a panel with such distinguished speakers the I will I'm conscious that we the panel hope that there would be good opportunity for questions here so I will be fairly brief I suppose the what I propose to do is give you a very brief introduction to the C20 then a brief opinion on why the Australian Presidency of the Australian Presidency in Brisbane provides an opportunity for to address climate change what has been done so far and what WWF at least believes could be done I'll give you three examples which are comparatively straightforward not easy but comparatively straightforward and three more ambitious things that the government would aspire to the C20 is a organization that was set up to provide civil society which is the term used commonly overseas for non-government organizations input into the G20 there was there was and is a business 20 which provides the perspective of the private enterprise there's also L20 which provides a perspective of organized labor and so on so there's a number of interest groups of the civil society 20 is one of them it was first established in Mexico it received a lot of support from the Russian Presidency last year and we have received very good support from the Australian Presidency this year and we're preparing for the Turkish Presidency next year now the reason the G20 provides a significant opportunity in our view I should say the views I'm expressing now are not yet the views of the civil the adopted views of the C20 the C20 summit is to be held on Friday and Saturday this week and it will only be after that that a consolidated and adopted view will be able to be expressed so in a sense the views I'm expressing now the views of WWF the G20 is really the Pareto principle in operation it's got 20 parties to it 19 countries plus the EU those parties produce 80% of the world's emissions and they're responsible for 85% of economic activity so unless if there is to be a solution to climate change and we sincerely hope there will be the majority of countries in that room must have supported the G20 meeting in Brisbane is also being held nine months seven months out from the UNF triple C you know nation's framework convention on climate change talks in Paris in 2015 so at the point that the G20 is held most of the government for all the governments in the room will be very advanced in their preparations for the UNF triple C conference they'll also have a good idea about the positions of the other countries so this really provides a splendid opportunity for a group of very important countries to identify and address the key impediments to a climate chain a deal at the UNF triple C meeting in Paris and there has been some good work being done today and there's some good work being done right now there is an existing commitment by the G20 to phase out inefficient fossil fuel subsidies by 2020 there is also a good work being done on energy efficiency but not withstanding the commitments and the good work energy efficiency by itself I cannot offset the growth and absolute emissions and although there has been a commitment on fossil fuels it has largely been delayed by a long discussion about what inefficient means and also understandable degree of political inertia so what could the G20 do and I don't propose to rehearse the debate in the media about whether or not the G20 or whether the not climate change is an economic issue it is clearly an economic issue it will have severe impacts on the global economy and even leaving that aside energy is the heart and soul of a modern economy and I also won't address another issue which is raised which is that it's too difficult to get agreement because that's just outrageous cop out by our leaders every international agreement is difficult and so unless we are prepared to tackle it the most difficult ones the difficult ones are not resolved one argument that does have some validity is that it may undermine the UNFCCC process and that is an issue that we must be concerned about but not withstanding that I think there is a number of WWF would suggest that there's a number of things that can be done at the G20 none of which will undermine the UNFCCC process the first one is we the G20 could commit to phase out fossil fuel subsidies by 2020 there are numerous reports by the IMF the World Bank the IEA indicating that there are there is a very large amount of money 1.9 trillion ish going into fossil fuels the subsidies each year freeing up that for more efficient use would be an enormous benefit to the world economy the second step again perfectly doable would be to adopt to a five-year plan or to agree to prepare and adopt at Turkey the G20 in Turkey next year a five-year plan to deliver a step change in energy efficiency through a mix of its standards incentives and investment energy efficiency is a well-trawled over area there's very little new to be done all it needs to be done the third relatively straightforward thing that the G20 could do that would increase the likelihood of a successful to score talks in Paris would be to develop a climate finance roadmap essentially the climate finance is one of the sticking points in the UNFCCC negotiations broadly speaking climate finance really just means providing funds to developing countries to enable them to take a more expensive in the short term but most expensive in the long term clean path to development China has said that it does not require any funding for this so is Brazil but both of them rightly say that unless funding is in place for other countries effective treaty will not be reached so essentially every donor every much nearly every major donor there is actually quite a few very generous donors but who are not in the room but nearly every major donor is in the room and so to put together a roadmap which would could be released before the Paris talks would greatly improve both the atmosphere of the Paris talks but also the likelihood of success finally there's a couple of things that are more ambitious still but would increase by a very significant margin the likelihood of a solution to climate change in Paris one would be for all G20 countries to adopt national emission reduction caps energy efficiency targets and renewable energy targets because we know that the bundle of those three mandatory targets essential to transform our energy supply the second would be to commit like the World Bank and a number of other governments to no longer use public funds to pay for new coal infrastructure called by father most pollution source of energy whatever the private sector may do and they will be guided by the caps that are set up by governments public money should not go into this most dangerous form of development and finally there will be a lot of infrastructure planning proposed and hopefully done at the G20 this year all those infrastructure plans should be both climate resilient and for most clean development so in summering the G20 in Brisbane this year under the Australian presidency provides a splendid opportunity to set up Paris for success it doesn't replace Paris but certainly the group of countries that form the G20 can show what they are prepared to do to address this issue so that other countries can feel confidence that process is starting to work okay so floor is open for four questions we've got a wrong mic I've got a question in the back just to get us started I'd like to ask you dr. young I think it seems like China is quite on on a quite different development trajectory with regard to energy and emissions and the United States so we have US emissions peaking in 2007 and now clearly defining and most experts that I speak to seem to think that the peak in Chinese emissions is probably going to occur in the 2020s at much lower per capita GDP than than the US so just wondering if you wanted to comment on that they have a many prediction or scenario study about energy consumption and CO2 emissions and I think is a in my slides you can see if based on the two degree temperature scenario CO2 emissions have to be no later than 2020 and so in this case for the cold cap that have to be a 2015 co-consumption have to reach the peak another indicates I would like to say if we can demonstrate the CO2 emission which the peak and first is a energy or CO2 emissions per capita have to go the peak for these two assumption have to go first or cold have to go first if we don't see anything is a co-consumption but by get peak the energy consumption by capital or CO2 consumption by get capital get get peak so it's hard to say the national emission cap can be soon or later question in the back and it's always welcome if you state your name my name is here thanks to all the speakers fascinating presentation a couple of questions firstly for pro-flight lots of interesting things there but I just want to ask for recognition because I think it's an interesting area and if you just haven't think about something that keeps that up much appreciate my real question my other question is about firstly it seems we haven't we haven't priced fossil fuels at the moment so there are costs of carbon direct environment impacts health etc and then on the other side we have fossil fuels so in Australia Mr Murray we have the impact of a strong fossil fuel industry obviously will be affected by the price I want to ask how the US is managing that relationship and will continue to manage that going forwards and then to you Dr young whether that's different in China because of the political structure and what opportunities how that affects any action that John might take is it free to proceed all right thanks for your question I think one of the really important things in the United States that we've been doing specifically over the last decade is we've very much been consulting with the business community and specifically the energy sector on the steps that we're taking and in fact a lot of the innovations that have really been developed on the clean energy side have been led by energy companies have been led by the business community so I think one of the points that our ambassadors stressed when he was in Melbourne is that we really see where this is not it's not a foreign against or you know a conflict between our reducing emissions and being profitable businesses are being profitable energy companies that really we can we can do both together and that the business community can play a role in doing so you know I think would be happy to send you some more information later on on some of the the projects that they're referring to but really the bottom line being that we see that business community as being part of the solution you know rather than part of the problem I think you know here in Australia and I definitely saw this when I was with the ambassador in Melbourne there certainly also are a number of business interests that have really been pushing for clean energy that have really been pushing innovation in this area and you know our view is that you know this can continue to happen and it doesn't have to be a you know foreign against you're either for reducing carbon emissions or your you know for economic growth we believe if you're looking at developing clean energy solutions if you're looking at innovation then there's a way that we can do both side-by-side To answer your question I think that definitely price is a strong signal for the market and for the coal and unfortunately coal is very cheap because the economy could be rescheduled and now coal is a price is a job very significantly and so let's make a call is a very competitive so one way we overcome these kind of barriers and we carry our study we call coal benefit so we have to estimate a call from exploration transportation you know combustion all these you know processes and what is social environment cost in bed so we estimate at least put all these together the coal price will increase with a 70 to 80 percent so in this case of course renewable definitely will will much advantage however and the government so far they cannot see I have to put the price or other tax on the coal to increase 70 to 80 percent but now they have a two tax is under discussion and one tax will be implemented very soon that is the resources so resources if can be exercises and so the price for coal will increase about five to six percent but another is a carbon tax but now we argue ETS is a better market in Kansas pools or the carbon tax if we impose the carbon tax on coal so that's called we have that the price will increase about 10% to 15% so so this is a lot is a much feasible the policy of course we have to argue about the environment cost and environment regulation and standards have to follow and for the natural gas that is having subsidized by government so this in this area we have to face out subsidization and compare to the international market or pipeline price or LNG price domestic price natural gas price is only 40 to 60 percent lower so that is the habit in the substance so we have to move this out and for the oil and oil actually is in the market price and so we like to see any cost and damage for the environment so so I think it is for Chinese to move this subsidization for the fossil fuel I think that is quite important but fortunately we have to also concern about our CO2 mission if we have every solution emission cap so so that can be faced out of the fossil fuel much sooner well just very brief answer I'm going to fail to resist the temptation to suggest that in a large and complex literature not a bad place to start as a little book called the China choice why America should share power published by black ink written by me Scott white from the application of the European Union I have a question for dr. Yang I notice in your very good presentation they didn't make a lot of reference to carbon capture and storage so I was just wondering in your opinion what role you see for CCS in the Chinese context thanks the CCS have argued or in the debate in China for a long time and China now consume more than half the coal in the world and so I think in this case if Chinese face out cold maybe take a long time but another challenge is that we have to develop a CCS fortunately is a private sector is more active than the common common at this moment is only a little money for the R&D but private sector for instance are set to like some part for the end and also is number one co-producer in some part they they have a CCS project and I think is that we have to increase the private sector because for this private sector they have their view they are afraid in the future you can survive or not so that is a kind of motivation and thank you very much Lee Gansung from Cronford school like to ask dr. Yang again on the energy and climate change policy in China so you're talking about the China's government set a target to reach the peak level in about a 10 to 15 years time but we were thinking that this is actually the peak level is the average for China but we know China has a very different the vast and the different regions and the different regions have a very different income level perhaps the richest and the poorest the income gap is about 10 times so in the way that if you look at the issue in the context of environmental cuisine is you occur that means the rich region reached the peak and you know the poor region still yet to come so in the way there is a risk very interesting public policy issues in the way to design the institution or even policy in accommodating the poor region for example in complying to the nationwide you know requirement for the carbon and for you know the emission etc so otherwise you know the third industry were migrate from a cost in responding to the rising cost to the inland and the poor region so therefore overall China will have a very difficult half to reach that average you know the peak level there is another dimension which is actually bring the international dimension if Chinese industries manufacturing were moved to dirty industry offshore so what will happen on the international friend again reason that you know the the broader issues about how to handle that through international corporations thanks yeah this is a good question I give you an example now we have a study coca that is not only in the national wide coca but also is a sectorial coca we can desegregate the national coca to the different sector for his power sector and still cement and building sector and cochemical sector but also is quite important because they have a leakage about the pollution and now more power and more cochemical novel to the west so to avoid this kind of a leakage so we every promises and every reason and we have a food coca in that case so for instance coastal area the coca is a little lower but I asked them to implement sooner together in under this coca and but we also in attack in the west we say in the couple years later you cannot exceed this coca to avoid to develop a more profile or you know co-driven or use coal the enterprise there and so so I think that is a one way to avoid and this coca in a different region also increase the tree like carbon tree or other tree or even they consume the money from coastal area to the poor area like up here I'd like to thank again all the panelists for speaking today my question was prompted by the comments from Professor White but it's open to the panel since I guess economic liberalization of China in the 70s much of the domestic legitimacy of the Chinese government or it's been argued that much of its legitimacy has rested on the fact that it's been able to guarantee economic development for its people and lived hundreds of millions of people out of poverty one of the consequences of its economic industrialization however has been a great deal of environmental degradation now it's I'm interested in I guess the domestic pressures on the Chinese government to act on climate change so far we've already seen dwindling water resources droughts significant air pollution in major cities once a future impacts of climate change become apparent like more extreme weather events rising sea levels and things like that how will the Chinese government respond to say domestic pressures on it to respond to climate change and maintain not only the economic but I guess also the environmental well-being of its population I think for anybody wants to have a go at it well that's good stuff sure I can start on that just in terms of my my time there and then you know working on it on the US China relationship from us about 10 years I think we're already seeing quite a bit of that and that's I think what's part of the reason that we've had an opening over the past few years to really engage China on a much wider range of issues I think in particular the air pollution the very serious air pollution incidents that China experienced particularly I think it was January 2012 and then following really affected the middle class in China just as Dr. Bai was saying earlier and so I think from the US perspective and we've definitely seen an opportunity to engage more with China to talk about these issues because they the leadership is increasingly serious about about addressing them so while the problems themselves the environmental degradation itself is a serious concern I think the silver lining if you will is that Chinese leaders are much more interested in engaging interested in international cooperation on this issue and interested in being responsive to that growing middle class in China I can just add a thought to that and I certainly don't regard myself as an expert on Chinese domestic politics but I do think that you know one of the most striking things about the Chinese government is although it works very differently from our say it has the same problem that is it's got to please its public on all sorts of different things many of them mutually incompatible you know more services lower taxes all that sort of stuff and so just like anybody everybody else the Chinese government has got very strong incentives to keep the economy growing very strong incentives to deal with problems of pollution very strong incentives to strengthen China's place in the world and you know establish its dignity and status and all that sort of thing and these pull them in different directions and I think although the way in which public expectations are filtered through to the policymaking process are different I think the process still works the other side of the coin of course is that in countries all around the world in China as well as elsewhere governments have a significant capacity to define these problems that to shape the way public see them I'm going to allow myself to say you can see that work in Australia in recent years one of the striking things about the Chinese government for the last few years it seems to me is that they've chosen to acknowledge and address the problem of climate change very frankly to say this is one of the things we have to fix they had a choice about that they could have told the public a different story as other governments have done they haven't so far one of the challenges will be to hope that they keep on taking that approach just the last point I think we will talk about this public awareness and pressure pressure very often talk about one side of the pressure like in the public is putting pressure to the government but actually what happens actually there is a you know both side kind of feedback for example I think a few years ago he said have did a survey asking USA and Chinese citizens say to what degree do you think the global change and climate change is a big issue I think in China there was about 78 percent something very hard to say this is a very big issue and then we would like to have the government to deal with this issue I think this is partly because of the government effort that if you look at TV sometimes they have this public government advertisement saying you know we have to predict our ecosystem and then some of the mention of climate change as well so our likes say this is a both side sort of interaction by the end of one side to the other and the second point I would like to mention is that you just mentioned this risk factor especially probably the coastal region I would say if I look at the new organization strategy I think the risk that is very under the jest and this is this is also shared with my colleagues in China I'm just back from China last week so we're really you know as someone who is working on our ecosystem we would really like to see that the government take a more sort of force anticipating and forcing kind of role in terms of taking the risk into account when they plan an organization and then building cities in China usually government action is raised a lot until they have crisis or big challenges and here for the environment issue and health quality and you can see now is the kind of crisis so fortunately Chinese government take action very quickly but before they are very slow because they didn't see this in the big challenge and based on the Chinese expert study now for the Chinese industrialization now is in the phase what we call the post industrialization let me in that relation we will not go up again and we will maintain play for production or even decline so for I still now reach the peak for cement maybe 2015 or 2016 or so reach the peak so for all these energy intensive orders in a maybe in the cradle so so on the other hand this is a good news for the current change the power of public opinion we're past two o'clock we've got two more questions lined up I think we'll take them together for one last round of responses from the from the crawl my question is for professor by I was interested in your comments about the potential of cities in terms of the contribution to climate change problem when we look at cities as decision-making systems what we see when we disaggregate them is a lot of fine-grained complexity a lot of regulatory issues at local council levels at local decision-making levels there are always huge compliance issues and when we look at the empirical reality we see that there are always issues about what to do about old building stock the percentage of green buildings as a percentage of buildings in cities generally is very low even with various incentives and it always comes back to a question cost so I was wondering if you could say a little bit more about how you overcome a lot of this regulatory reality as it were overcoming a lot of these micro problems in order for cities to really achieve this macro objective that you talked about which seems plausible and good now how does one green cities and particularly in the context of China I guess my question is to you white regarding the country way before the current situation with the US and China potentially it could deteriorate could improve or the status quo could be maintained so I didn't really understand how this impacted on climate you may mention that there was a risk movement to allow account economy you also mentioned that China's economy will overtake the US and what impact that will have in real time and energy security to these question first I'll give a very brief answer I think there's as I touched on in my remarks I think there are a number of different ways in which the reality the present reality of strategic rivalry between the US and China and the risk that that rivalry will escalate in the two separate points can affect both what each country does individually in relation to changing their energy economies reducing their carbon emissions and to their capacity to cooperate in achieving things like a good outcome in Paris next year and it partly relates to the way they partly relates to the way they see one another as competitors and so for example the more competitive the more they see one another as competitors and the more they're conscious of them of themselves being as I think they are in a competition to see who has the bigger economy because that is in the end determines who's got who's got the most power and I think it is as brutal and simple as that in essence will factor in will not be a sole determinable factor into their judgments about how far they're prepared to sacrifice economic growth in order to achieve lower emission energy outcomes it will also affect the way in which they see one another as negotiating partners slash competitors and I think it will particularly affect the politics of selling negotiated outcomes to their domestic audience as I said before I don't know enough about Chinese politics to know how that would work but it's not very hard to envisage the situation in which the US president takes a deal to the congress and some of the congressmen say hell you're given away too much to China and the more competitive the relationship the harder that will be to get past and the last point is that if as I think is far from a certainty and in fact not a very high likelihood but considering how serious it would be a likelihood we have to take into account very significantly if the US and China find themselves in an armed conflict not an impossible possibility then I think the chance of cooperation on climate change or anything else go straight out the window it blots everything else out so it's a it's a that's a that's a relatively low probability but very high consequence possibility that looms out there at the edge of the future space low but not that low I think it's I reckon it's higher than most other people do because I've got a very gloomy imagination is it is it okay if I also add if I could add something to that as the US government representative on the panel just want to offer an alternative an alternative narrative alternate narrative just very simply and very briefly we welcome the rise of China we've said that our president said that our secretaries have said that there's been bipartisan support for that over the last 30 some years we've said it repeatedly we want to engage China across the board that doesn't mean we'll never have disagreements of course we will we have disagreements with any country diplomatically politically economically and we're gonna have disagreements with China but we want to continue to engage China across the board and lastly as I talked about in my remarks we really believe that this energy and climate space is one of those growing opportunities where we can do more with China and uh you know so I would I would put it more as the the glasses have full person um up here but uh you know that's something that I've seen myself over the last 10 plus years and I hope we'll be able to continue to do that yeah may I jump in yeah uh uh I agree with you man um if based on my observation you know we have a strategic dialogue between the US and China is more than 10 years already so I don't see because I'm involved in the environment and climate change technology area this cooperation is very smooth they are no big trouble big fight in the environment uh energy and climate change and of course other issues like military issues of course they have a some conflict but I don't see in the future you know they are they have a big you know fight between us and China of course in the future we have a more you know competition uh in a common area even in other areas but I think it is uh uh I think both countries smart uh leaders are smart to settle down this and and even uh you know big uh my observation for the Chinese leaders and they don't like to have a very strong you know other uh you know conflict with the US of course they like to die and so uh for the China for China I'd like to see the first time in the world they can see the uh you know peaceful race or peaceful development can work in these two big countries if it doesn't work and I see the big disaster so can I come to the um city question I certainly agree with you it is really it is easy to say that cities have lots of potential but it is really hard to realize those potential and I think it's particularly because try to address some of the global issues at the city level there are this scale mismatch I call them for example you know we have this temporal scale mismatch if you haven't you know elected mayor you know his concern is probably three to five years within his office time but when we talk about global change it's you know we're talking about hundred years of scenarios and things like that so it's totally out of his you know temporal um scale and also there's a spatial scale issue for example a mayor will be concerning about whatever happening within their boundary administrative boundary but the global change issue doesn't have really a boundary and then how to actually address those things within the city boundary sometimes times they conflict with their local issues for example more pressing you know like how do you actually provide for urban poor those sort of things and also there's this institutional scale mismatch for example like city government they have to work within this national and state government um you know sort of system and it is sometimes very hard for them to over jump and then say we would like to do something for something that is global so it is really hard but on the other hand I would really like to see um you know like people to look at some of the stars there are some of the very good front runner cities in the world and despite all the you know they just beat all the odd and they can do lots of good things so my approach to this is that rather than try to give you know one size bigger kind of um solution I would really like to see how some of the front runners could do that and then by doing a more systematic sort of analysis looking at you know those front runners across different cases and different um contexts we probably can find out something um that can be um you know transferable can be you know learned by others and I would like to quote um Torres you know Anna Carolina you know the novel's opening sentence which says you know all happy families are alike but all you know each and every unhappy families they have their own misery this is you know a paracord from Chinese translation because I read that in Chinese so I would like to forget about those you know unhappy families for a moment and then focus on why some of those happy families can be happy and what are some of the you know alike commonalities among you know some of the happy your cities so that will be my answer