Breaking the Climate Impasse with China: A Global Solution

This paper explores the question of how to reconcile both countries' need for economic advancement, which is increasingly intertwined, with the imperative need to reduce greenhouse gas emissions (GHGs). How technology transfer occurs in practice, and how low-GHG technology transfer specifically might occur, based on prior experience with China, are examined. Particular focus is devoted to the following questions: How could U.S. firms benefit economically from low-carbon technology transfer to China? And, how could China acquire the technologies it needs to continue its rapid progress of industrialization in a more climate-friendly manner? The paper is aimed at finding a partial solution that would be likely to bring both the United States and China into an international climate change mitigation regime. The ideas proposed herein certainly do not resolve many other important challenges, such as how to provide for adaptation assistance, or how to help least-developed countries attract support for improving energy access in a climate-friendly manner. A "deal" is proposed in this paper, whereby all major-emitting countries, including the United States and China, agree to reduce emissions through implementation of significant, mutually agreeable, domestic emission-reduction policies. To resolve the competitiveness and equity concerns, a proposed Carbon Mitigation Fund would be created. This proposed fund is contrasted with other existing and proposed mitigation funds and finance mechanisms.