Energy Technology Innovation Policy in the Backdrop of the U.S.-China Emissions Agreement

Workshop Report

Introduction

Background: The U.S.-China Emissions Agreement

In November 2014, the U.S. and Chinese governments made an historic joint announcement committing their countries to substantially reduce greenhouse gas emissions. President Obama announced a new target to cut net greenhouse gas emissions 26–28% below 2005 levels by 2025, and President Xi Jinping announced targets to peak China's CO₂ emissions around 2030, with the intention to peak earlier and to decrease the share of energy from fossil fuels. The U.S. and China account for over one-third of global greenhouse gas emissions, and as the joint announcement demonstrates, cooperative action to address climate change now appears politically feasible. Furthermore, it is hoped that the joint U.S.-China announcement will lead to broader cooperative efforts that will inspire a more effective and ambitious climate agreement at the December 2015 United Nations Framework Convention on Climate Change Conference of the parties in Paris.

Energy technological innovation is featured prominently in the U.S.-China joint announcement. The two governments announced six U.S.-China collaborative efforts and a series of domestic measures. Four of the six collaborative efforts are focused on accelerating research and development in low-carbon technologies (the other two are focused on encouraging technology diffusion and best policy practices).

In terms of domestic efforts, the U.S. highlighted its new policies to accelerate the development, demonstration, and deployment of energy technologies, mainly in the form of flexible sectoral policies and technology standards (e.g., for clean power, heavy duty engines and vehicles, and energy efficiency in consumer products). The White House announcement stated that under this new goal, the U.S. will double the pace of CO₂ emission reduction from the historic average rate of 1.2% per year between 2005 and 2020 to 2.3–2.8% per year between 2020 and 2025 (The White House, 2014). China announced large investments in the development and deployment of clean energy technologies, with the goal of non-fossil fuels accounting for 20% of primary energy by 2030. According to the statement by The White House, this target for China would require additional clean energy deployment of 800–1,000 GW, which would represent more than China's current coal-fired generation capacity. The centrality of technological innovation in climate change mitigation strategies is not unique to the U.S.-China emissions reduction deal.

There is general agreement that innovation in energy technologies will be essential to cost-effectively address the global energy challenges of environmental protection, energy security, and energy access.

The Energy Technology Innovation Policy research group at the Harvard Kennedy School and the Tsinghua School of Public Policy and Management convened a workshop at Tsinghua University in Beijing on June 18–19 to build on the momentum created by the U.S.-China joint emissions agreement and the upcoming Paris negotiations. The objective of the Workshop was to discuss the current state of affairs in China, in the United States, and in selected other countries as well as academic research on: (1) the funding and allocation of government investments in R&D, with a particular focus in energy; (2) the impact of policy on private sector innovation in energy; and (3) the management of publicly funded R&D organizations. The agenda (see Appendix A at the end of this report) details the speakers in the public welcome session and in the subsequent three closed sessions spanning the three aforementioned topics.

Participants included thought leaders in academia, government, industry, and the not-forprofit community in China and abroad (see Appendix B at the end of this report for a list of participants). They spoke off-the-record about what new or adapted policies or activities might serve to accelerate low-carbon innovation in China and beyond, domestically or in cooperation with other countries.

This "not-for-attribution" Workshop Report summarizes the highlights of the discussions in the workshop. By a "not-for-attribution" report we refer to the fact that the report summarizes the discussion in the workshop but does not attribute any views or comments to specific individuals. The objective was to elicit open and candid discussion. The report itself can be cited in future work.