CHINA: U.S., China sign energy pact, launch investment treaty talks (06/19/2008)
Michael Burnham, Greenwire senior reporter
The United States and China agreed yesterday to collaborate on energy security and environmental sustainability challenges during the next decade, as well as begin bilateral investment treaty talks in the next several months.
U.S. Treasury Secretary Henry Paulson and China Vice Premier Wang Qishan signed the "Ten Year Energy and Environmental Cooperation Framework" in Washington, D.C., after two days of Strategic Economic Dialogue meetings in nearby Annapolis, Md.
In the coming months, Paulson and Wang will marshal the cooperation of a dozen state-level Chinese and U.S. agencies on air, water, transportation, electricity and forest and wetland conservation issues. Businesses and leading research universities will also participate.
Energy security ranks as perhaps the most important economic challenge the countries share, Paulson said.
"We seek energy security -- which is so vital to our economic security -- while taking the necessary steps and making the necessary technological advances to preserve the health of our planet," Paulson said. "Success in this area will require a sustained long-term effort by our two countries."
The United States and China are the world's two largest net importers of oil and emitters of carbon dioxide and other heat-trapping gases (Greenwire, June 16). China built about two coal-fired power plants a week and accounted for almost 50 percent of world oil demand growth last year.
Neither country has a set a long-term, binding cap on its greenhouse gas emissions. The 10-year framework does not specify energy and environmental targets but calls for joint development of cleaner technologies, policies and incentives.
Paulson and Wang are slated to meet in December in Beijing for the fifth Strategic Economic Dialogue. Between now and then, the delegations will explore "EcoPartnerships" as a vehicle for demonstrating environmentally sustainable technologies and policies.
A Treasury Department spokeswoman declined to elaborate on what those partnerships would entail.
The delegations already are discussing steps the countries could take together to diversify their power generation resources, as well as develop alternatives to fossil fuels within the transportation sector.
The Chinese and U.S. delegations also plan to collaborate on clean water technologies and policies, as well as the establishment and management of protected wildlife areas.
The countries will also develop a sulfur dioxide emissions trading program for China's power generation sector. The United States would provide technical assistance.
While Wang called the 10-year energy and environmental pact the "highlight" of the two-day meeting, the countries also agreed to launch talks for a bilateral investment treaty to make it easier for companies to do business on both sides of the Pacific Ocean.
The delegations plan to meet several times before the next official Strategic Economic Dialogue meeting to discuss legal protection and transparency for all economic sectors. Such a treaty would require several months of negotiation and Senate approval.
"The conclusion of a [bilateral investment treaty] would send a strong signal that our two nations welcome investment and will treat each other's investors in a fair and transparent manner," Paulson said.
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