China Law Blog

Earlier this month, DLA Piper's Beijing office put on its third Young Professional's Forum.  These forums are invitation-only events for Beijing professionals "to meet and socialise against the backdrop of a debate on current issues."  They are held every two months in Beijing and DLA Piper is planning to begin similar forums in Shanghai, Tokyo, Hong Kong, Bangkok and Singapore. 

I was invited to this event, and excited as I was in attending, I did not think I could justify the airfare from Seattle.  But, thanks to Edward Hillier's terrific write up on the event, I feel almost as though I was there.  Wishing to convey that same feeling to our readers, I am posting Mr. Hillier's write up here.   

Mr. Hillier is a Legal Assistant at DLA Piper's Beijing office. He studied law at University in England, did his LPC (England and Wales Law Society exams) and worked in law for about four years before coming to China. He came to China because he is interested in the country, after having spent some time in Hong Kong many years ago.  Mr. Hillier studied Mandarin in England before moving to China to engage in corporate language training. After almost two years of teaching in China, Mr. Hillier went to DLA Piper to get back to his original field of law. Mr. Hillier has been at DLA Piper for about eight months, where he engages mostly in paralegal work, writing articles, some Business Development work, and some English editing.

DLA Piper's February forum was a panel debate on Global Warming, led by DLA Piper's Beijing office's managing partner, Jingzhou Tao. There was an excellent turn out from the business community, the environmental community and the media.

The panelists were:

Pan Jiahua

Director of the Research Center for Sustainable Development in Beijing and member of the Chinese Academy of Social Sciences, Pan Jiahua has written around 150 articles in academic journals on climate change. He received his PhD from Cambridge University in 1992 and has since worked for the United Nations Development Programme Beijing Office as Senior Programme Officer and as an advisor on environmental and development and for the Intergovernmental Panel on Climate Change.  His recent research projects include Clean Development Mechanism policy in China, human development with low emissions as a scenario of post-Kyoto, emissions demands for development goals in China, and South-North Dialogue on Equity in the Greenhouse.

Ma Jun

In 2006, Time Magazine named Ma Jun as one of the world's 100 most influential people and Ma is probably China's most famous environmentalist.  After working as a researcher for the South China Morning Post, he was the Chief Representative of SCMP.com in Beijing from 1999-2002, focusing on environmental issues.  In 1999, Ma wrote China's first major book on China's environment, entitled, "China's Water Crisis."  He served as environmental consultant for the Sinosphere Corporation until 2004, when he was selected as a Yale World Fellow. He currently directs the Institute of Public and Environmental Affairs.

John Shi

As Managing Director of Arreon Carbon, John effectively trades air. Carbon trading is a Kyoto government/market hybrid to incentivise companies to efficiently reduce global emission of greenhouse gases. Under Kyoto, countries commit to cap their greenhouse gas emissions. Carbon credits are traded on the free market, enabling companies that can clean up cheaply to do so and then to sell their credits on to those with higher clean up costs.  This could make Arreon a key Kyoto East/West facilitator.

THE DEBATE

The evening began with an introduction from Mr. Tao, who set the tone by talking about the beautiful village in Anhui Province where he grew up.  The village was situated at the confluence of four rivers, and Mr. Tao told of how, as a boy, he had nearly drowned when his childhood friends had thrown him in one of the rivers, not knowing he could not swim. He left the village at the age of ten, not to return until last year, more than thirty years later.  Upon his return, he was heartbroken to discover that of the four rivers he remembered from his childhood, only one still existed.  The other three rivers had been built on and the one remaining river was so full of plastic bags and rubbish he could not even see the surface of the water.

Having graphically made the point that environmental concerns are everybody's responsibility in the here-and-now, Mr. Tao went on to ask the panellists to introduce themselves:

Pan Jiahua gave the background to the Kyoto protocol, and explained that as a developing nation, China does not want to make any firm commitments.  He made the point that by 2008, per capita carbon emissions in China will be above the world average.

Ma Jun stated that 2006 was a turning point in the world's attitude towards global warming, as there is now widely accepted evidence that global warming is almost certainly due to greenhouse gas emissions. He also explained that global warming will change China's precipitation patterns, leaving some areas with water shortages.  He finished by giving a message to the international community:  China will take its environmental responsibilities seriously, but international treatment of China must be fair.  The developed world discharged 70% of the unnatural CO2 in the environment in the last 200 years.  However, the Kyoto agreement was correct in that this is everyone's responsibility.  China's own environmental problems should not be overlooked, and China deserves more international support.

John Shi stated he hoped to represent the Carbon business, explain the Clean Development Mechanism (CDM), and in particular de-bunk some of the myths that have been propagated, as for example in the article "China Cashes in on Global Warming."

Mr. Tao then began the debate by asking the first question:

What can we do on an individual level to combat global warming?

Pan Jiahua:  Everyone should consume moderately.

Ma Jun:  The focus should be on large corporations to set the example.

John Shi:  We should all take the time to educate ourselves about the facts, and then do what has the most impact to change the prevailing view of the media and the government.

The debate was then thrown open to the floor.

Steve Andrews, National Resources Defense Council:

How does the CDM relate to projects under constructions, as opposed to projects to reduce emissions on installations already in operation?

John Shi:  The CDM is a mechanism to fight climate change, by incentivising clean investments.  It will therefore encourage the market to drive cleaner development, which will create a permanent effect.

Pan Jiahua:  China builds new coal power stations with a capacity equal to that of the UK every year, which is worrying.  However, the new stations are much more efficient.

Jorg Hohn, German Centre

In China, most CDM projects focus on power generation, but in many countries they focus on transport.  Does the panel know of any CDM transport projects in China?

John Shi: Every CDM project goes through a strict approval process through the UN, and so far there is no approval channel for transport projects in China. Also, CDM credits need to be monitored, and this is difficult in the transport and construction sectors, for example.

Manny Rumbos, Mega Media Works

Carbon Trading seems reactive, not proactive.  In economic terms, it is a macro-economic solution, not a micro-economic solution. At the big picture level, what is being done?

John Shi:  We are reactive.  Global warming is already a fact.  But, the flexible mechanism under Kyoto is both macro- and micro-.  Cap and trade systems have been shown to be effective in the US, and the technological aspect will allow free enterprise to find a solution.

Mark Dembitz, Sindicatum Carbon Capital

The Kyoto agreement expires in 2012.  What a) will happen afterwards, and b) what should happen afterwards?

Pan Jiahua:  Post Kyoto, there will be a basket of agreements.  There should be a continuation, but that will prove more difficult.

Ma Jun:  That will depend on what happens between China and the U.S.  Bush has made his views clear, so let's hope there is a new president.  CDM should be combined with local efforts.  China's efforts should be recognized, but it needs to change its growth model -- at present it uses 50% of the world's cement every year, and burns 31% of the world's coal.

John Shi:  The point about the China - US axis is correct.  An Economic survey said recently that many in the US felt the US should take the moral lead.  There are several arguments for this; though China has only been burning fossil fuels for a few decades, China did have the chance to develop, but didn't.  When a house is on fire, no one argues about who stared the fire, people just put it out.  No one criticizes Halliberton for benefiting from the war in Iraq.  China has a moral obligation to be part of the solution, because we all share the same future.

Stephanie Tseng, BANCOMEXT, Beijing

I recently read that a double-digit percentage of Americans do not know what 'greenhouse gas' means.  How many people in China know?

Ma Jun:  There was a recent survey by the All China Environment Protection Organization, which showed that the Chinese people's number one environmental concern is food safety, followed by water pollution, followed by air pollution.  Global warming was in the top ten.  Remember, 300 million rural Chinese do not have safe drinking water.

Mark Pinner, UK

Everyone knows about global warming, but not many know that fossil fuels will run out.

Ma Jun:  To change the growth model is challenging.  There is a growing consensus in China, as can be seen from the 'harmonious society' campaign, that man and nature should not be in conflict.  It is happening, both from the top down and the bottom up.  The biggest problem is weak enforcement.  In 2003 there was the first example of a law which required public participation.  Transparency is the first step, which means identifying polluters and telling the public.

Daniel Foa, Nortel, UK

The petrol prices in the UK, US and China are all different.  Why can't driver-consumers be charged for the cost of keeping carbon emissions down?  Why can't there be incentives for new 'green' car designs in China as in Japan, which could also create a new industry in China?

Pan Jiahua:  The impact of price increases is minimal.  It is also not that easy to introduce new concepts and models in the marketplace.

Ma Jun:  This issue is slightly more complicated than it looks.  What we need is transparency, accountability, the rule of law.

Elizabeth Aab, Banker, China

China is morally obliged to assist.  It is important for every country to collaborate and support each other, and it isn't useful to criticize or blame.  Some western countries export rubbish to China.

Ma Jun:  It is up to the Chinese to man their own fences.  Some companies are good corporate citizens, except in China.

Qi Wen, South China Morning Post, Hong Kong

Could you clarify the misunderstandings about HFC?  Is production of this refrigerant being encouraged when it will be banned in the US?

John Shi:  The Chinese government has approved 250 projects reducing carbon emissions. Fewer than 10 are HFC destruction projects, which account for 30% of [greenhouse gas] emissions.  All the qualified HFC destruction plants have been built and sold, and there are no indications that because of the CDM, new plans are being made.

FINAL COMMENT

Tao: It has been said that all of China's FOREX reserves would not be enough to cover the cost of cleaning up China's environment.  Likewise, all the time we have tonight is not enough to discuss this topic.