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How Dirty Industries in EU Nations Created China's 21st Century Clean Energy Boom

As California moves to implement cap and trade to reduce harmful greenhouse gases, the UC Berkeley Center for Law, Energy and the Environment has published a new study designed to help lawmakers in California fine-tune the legislation.

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As with the studies by the German Marshall Fund with its Ten Insights from Europe on the EU Emissions Trading System – the UC Environmental Law Center studies those who have gone before us.

They want to fine-tune legislative ideas that can help us reduce greenhouse gases by holding polluters accountable, and by using the proceeds to implement clean and safe renewable energy that builds a prosperous economy in California.

One interesting finding is that the EU cap and trade system grew China’s clean energy.

Under the European Trading System (ETS) cap and trade system, polluting plants have to pay for every ton of greenhouse gases they send into the air, and have to reduce the amount every year. If they can’t reduce their emissions enough, they have to buy a form of an emission offset called Clean Development Mechanisms instead.

These  Clean Development Mechanisms or CDMs fund renewable energy development in developing nations. The idea is that by investing in renewable energy in the developing world – overall global emissions are lowered. So if a dirty coal plant can’t clean up, it can build clean energy somewhere else, which is done through its fees for pollution.

For example, a United Nations climate panel approved CDM funding for 32 Chinese wind farms under the Kyoto Protocol late last week, using pollution fees from dirty fossil energy plants in Europe.

Approval can be difficult. To qualify, you have to prove that the projects could not have been built without CDM funding.

The CDM’s executive board rejected 10 Chinese clean energy projects in December, saying they were already profitable without receiving any outside assistance from dirty energy plants in Europe, the vast majority of which are in the former soviet union nations that are now part of the EU.

Thus it has been the EU’s dirty old coal plants like Belchatow in Poland that initially propelled China to take its first (now reverberating!) steps into the clean energy world of the 21st century, through its mandated CDM purchases.

Now, as Steven Chu has pointed out, China is spending $9 billion a month on renewable energy. Not only by its socialist government, either. China’s recent first privately financed wind power IPO was for $2.2 Billion.

Do dirty coal plants in Poland fund clean energy in China? Dirty coal plants in Poland do. Apparently.

Related stories:

Reuters: Cap and Trade Worked in EU

Massachusetts Earned $50 Million From Cap and Trade in 2009

Image: Fallout Archives

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writes at CleanTechnica, CSP-Today and Renewable Energy World.  She has also been published at Wind Energy Update, Solar Plaza, Earthtechling PV-Insider , and GreenProphet, Ecoseed, NRDC OnEarth, MatterNetwork, Celsius, EnergyNow, and Scientific American. As a former serial entrepreneur in product design, Susan brings an innovator's perspective on inventing a carbon-constrained civilization: If necessity is the mother of invention, solving climate change is the mother of all necessities! As a lover of history and sci-fi, she enjoys chronicling the strange future we are creating in these interesting times.    Follow Susan on Twitter @dotcommodity.

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