Consuming nations should pay for carbon dioxide emissions, not manufacturing countries, says China

Tough stance on responsibility for emissions could be crucial obstacle to US agreement on climate change in December

Jonathan Watts, Asia environment correspondent
guardian.co.uk, Tuesday 17 March 2009 16.59 GMT

China wants consumer countries to take responsibility for the carbon emissions generated in the manufacture of goods, not the producer countries that export them, according to its top climate change negotiator.
The tough bargaining position set out by Li Gao, whose country is now the biggest emitter of carbon dioxide in the world, looks set to be a major hurdle for the Obama administration and other developed nations as they seek to find common ground ahead of a crucial UN climate change meeting in Copenhagen in December.
Since taking power, President Barack Obama has signalled his readiness to enter into an international agreement on reducing emissions, to be negotiated in Copenhagen. This is in contrast with his predecessor George Bush who dropped out of the Kyoto protocol because it did not set binding targets for big developing nations China.
A deal between the two countries is widely seen as critical in reaching an international agreement. China overtook the United States as the biggest emitter in 2006 and its dependence on coal-fired power looks likely to ensure that it will remain in this position for decades to come. Li, who was in Washington for a preliminary meeting of the major emitting nations, set out China's position that western consumers were largely to blame.
"As one of the developing countries, we are at the low end of the production line for the global economy. We produce products and these products are consumed by other countries... This share of emissions should be taken by the consumers, not the producers," said Li, who serves in China's powerful National Development and Reform Commission. He added that between 15% and 25% of all the country's global warming emissions resulted from manufacturing exports.
His counterparts from Japan and the European Union said the position was unacceptable. "I think the issue here is we take full responsibility and we ... regulate all the emissions that come from our territory," said Artur Runge-Metzger, who heads the climate change strategy and international negotiations unit at the European Commission.
Softer ground may be found between these two positions. British lawmaker and former environment minister Elliot Morley believes importers and exporters share responsibility because while emissions have been outsourced from the west, China has benefited from extra jobs.
Several recent academic papers have noted how European nations have outsourced emissions and other forms of pollution to developing nations instead of tackling emissions at home. According to Oslo's Centre for International Climate and Environmental Research, a third of all Chinese emissions are linked to exports, with 9 per cent caused by exports to the US, and 6 per cent from producing goods for Europe.
Karl Hallding, of the Stockholm Environment Institute (SEI), said a shift to a consumption-based system was worth considering. "This has been debated among economists. The argument makes sense. It would be better if emissions were owned by consumers. It would provide incentives for us to put the money into reducing emission in producing countries."
The SEI has determined that Britain's calculated emissions would have risen by 20 per cent relative the 1990 if imports and international transport were factored in to the total. In contrast, under Kyoto protocol accounting methods, the UK government says emissions have fallen by 18 per cent over the same period.
While the US-China talks are still in an early stage, the difference of opinion indicates the ground that the Obama team will need to make up. Their efforts to forge a compromise have been further complicated by US lawmakers considering the imposition of carbon tariffs on countries that do not set binding caps on their emissions. Li said such a trade barrier would be a "disaster".
China argues that wealthy nations should contribute more because they have a greater historical responsibility for the carbon that has entered the atmosphere over the past two centuries.
But State Department spokesman Robert Wood remained upbeat about the dialogue between the US and the visiting delegations. "There's a willingness, particularly on the Chinese side, to really engage on the subject of climate change, and we welcome that."