A Response to Daniel Abebe and Jonathan Masur by Jonathan B. Wiener

[Jonathan B. Wiener is the Perkins Professor of Law and Environmental Policy at Duke University; Eli Goldston Visiting Professor at Harvard Law School; and a University Fellow at Resources for the Future]

In their paper on the “Two Chinas” and climate change policy, Professors Abebe and Masur raise an important point about how China’s internal politics may affect its international relations. They observe that China has relatively richer eastern Coastal provinces and a poorer West, and that continued economic growth (especially in the West) is vital to the Chinese leadership’s priority objective of preventing internal unrest. They also suggest that a disaggregated look at these two Chinas portends higher CO2 emissions than seen in aggregated forecasts. Thus, they argue that the costs to China (both economic and political) of reducing greenhouse gas (GHG) emissions are higher than aggregate models have indicated. They posit that China will therefore not agree to reduce its GHG emissions without significant international side payments from wealthy countries (and may also need to generate internal side payments, from the Coast to the West). But they fear that direct financial transfers from the US to China are politically infeasible in the US. They see more promise in delivering such side payments via transfers of valuable technology from the US and Europe to China.

In this brief post, I can offer several reactions. First, I fully agree that internal politics are highly important to international relations and in particular to participation in international environmental treaties. (For earlier work making this point, see, e.g., Kal Raustiala, Domestic Institutions and International Regulatory Cooperation, 49 World Pol. 482 (1997); Jonathan B. Wiener, On the Political Economy of Global Environmental Regulation, 87 Geo. L.J.749 (1999)).

Second, while Abebe and Masur focus on the influence of China’s domestic divisions on its costs of reducing GHG emissions, they do not address the influence of China’s domestic politics on its benefits of reducing GHG emissions. I argued in a recent paper that the Chinese leadership may plausibly be concerned that political unrest may also be sparked by extreme storms and other environmental disasters that are perceived as linked to climate change. This is especially true in China, which has a history of dynasties falling after natural disasters, and a popular psychology that links the two. Hence China’s internal politics may also motivate the Chinese leadership to see greater benefits from avoiding climate change. See Jonathan B. Wiener, Climate Change Policy, and Policy Change in China, 55 UCLA L. Rev.1805 (2008). This is distinct from and on top of the more general trends that the appreciation of climate change damages in China may be rising, and the costs of GHG emissions abatement may be falling.

Moreover, China’s efforts to reduce the carbon intensity of its economy may also aid its Western economy. Although the Western provinces are major sources of coal, there are also growing new industries in wind energy and nuclear power that may be sourced or sited in the West. And there is some discussion of a domestic GHG emissions trading program within China being oriented to direct transfers to the West.

Third, the rapid rise in China’s GHG emissions in recent years (observed and extrapolated by Abebe and Masur) may also be due to other factors related to climate change policy, notably, possible leakage from the climate policies adopted in Europe and elsewhere. Thus, the type of economic growth and associated rising GHG emissions in China (both Coastal and Western) may be endogenous to the international climate change regime (or its failure).

Fourth, I agree that some side payments will likely be needed to engage China, and that direct government-to-government financial transfers are unlikely (and, worse, would be distorted by internal politics in both donor and recipient countries). The better method, as Dick Stewart and I argued in our book Reconstructing Climate Policy (2003), is through international allowance trading, with China receiving an implicit side payment in extra headroom allowances, and using these to trade back to the US and Europe in return for technology. Thus, the side payment would be delivered in myriad competitive private transactions, a much more cost-effective, and more politically palatable, approach; indeed, US firms would be selling technology to China in return for allowances obtained at lower cost than domestic US abatement.

Finally, and perhaps most interestingly from the standpoint of comparative law, the Coastal-Western tension that Abebe and Masur see within China may be not so different from the Coastal-Western tension within the US. If so, internal side payments may be necessary within both China and the US if the Coastal beneficiaries of climate policy in each country are to persuade the Western resource-rich provinces to go along with a national climate policy. Analogous regional tensions are present within European climate policy. Further study could compare the abilities of the rather different legal/political systems in China, the US and Europe to arrange internal transfers that serve the aggregate national and global interest in effective climate policy.