Doing Good by Doing Well
China to Go Green Without Breaking a Sweat

Chinese President Xi Jinping is set to announce a nationwide carbon cap-and-trade program for China during his official visit with President Obama today. The announcement will be part of a broader pledge by both China and the United States to meet the ambitious goals for CO2 reductions by 2030 agreed to by both leaders when Obama visited Beijing last November.

Details remain sparse ahead of the announcement, but China is expected to build a national program on top of several local pilot cap-and-trade schemes launched in the past few years in its major cities. The program will seek to wring most of the emissions improvements from its paper, steel, and cement industries—relatively low-hanging fruits for a modernizing Chinese economy that is striving to balance away from an export-driven model and toward a service-oriented model.

Depending on the details, this could represent genuinely good news for the planet—but not necessarily in the way greens might think.

China is undergoing a shift away from metal bashing and other energy intensive applications towards less energy intensive activities like providing medical services and building gourmet restaurants for a growing, urbanizing population. A ballet class adds to GDP but doesn’t burn as much carbon as a tire factory, and China’s economic planners have long been moving to shift from a tire economy to a ballet one. This shift is bringing long-term slower growth rates with it, and if the economy keeps getting more energy efficient as the growth rate slows and China’s developing economy matures, the country will be able to cap and ultimately to cut carbon emissions without breaking a sweat. (Of course, China has another important reason to cut energy intensity: It wants to reduce its dependence on imported energy because it fears the ability of the U.S. Navy to interrupt its energy supply in the event of a serious U.S.-China crisis.)

This kind of reality doesn’t play well with the MSM, which will no doubt try to cast the announcement as China having had a sincere change of heart, embracing green austerity and adopting the politics of self denial. Don’t be fooled: China’s policies may end up doing good things for the planet, but the country is pursuing them out of self-interest.

And that’s at the heart of why this could in fact be very good news. China—like the rest of the world—doesn’t have to embrace green pessimism and anti-growth economics in order to make real progress in reducing its carbon footprint. Economic growth and technological progress combined with intelligent and forward looking policy choices will do more to bend the carbon curve than the breast-beating and garment-rending so popular among some greens.

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