Rained In

Saturday morning. My favorite part of the week. Get up early, bike over to Starbucks with my laptop and soak in the English newspapers with a giant coffee and a chocolate muffin.

Unfortunately, this morning, its pouring. Which means my bike is getting soaked outside and I'm stuck here for quite awhile. The American Chamber of Commerce July 4th BBQ is this afternoon/evening. I'm totally bummed. Gabe, my AmCham insider, tells me that there should be over 1200 people there and that they've got the works lined up, including fireworks. It rains so infrequently here, I don't know if they have a contingency plan. Hope it clears up!

So while I'm stuck sitting here, here is the week in review:

Monday: Finally picked up my bike. Left it at Courtney’s courtyard when we threw Ali’s birthday party (I posted a picture of the beginnings of the party just to make the post more interesting. Note the guy making kabobs in the back. We were proud of getting that together).

So, without a bike, I was forced to take the bus to work all last week. The buses are so jam packed that there is a person who works at every stop to cattle prod people in as the doors close. There is no space to breathe and its 90 degrees out. Yummy. But it only costs one kuai— in USD about twelve cents. Taking a cab to work costs twenty (still only $2.50). But getting one is impossible where I live after eight in the morning. So: sleep later, pay nothing, get squished. Get up early, pay twenty times more, sit in a spacious Hyndai with air conditioning. I choose the bus.

So, I finally picked up my bike, which makes my morning commute much more bearable. Since I was in the neighborhood, had dinner with Courtney and Will. The three of us foreigners, booking through the old narrow hutong streets on bicycles, in suits, must have been quite the sight.

Tuesday: Trivia night at Tim’s Texas BBQ. All of the people us regulars pester to come every week actually showed up. Had a huge team and finally beat out the Mudbugs.

Wednesday: Song Dan and Lu Na invited Dan and I out to dinner as a thank you for helping them out with an urgent problem with the UN. By the time the day finished, it had evolved into half of the office going over to Dan’s to order food and play cards after work. Linghui showed up with noodles and veggies and whipped up an inproptu dinner for all of us (you can always count on Linghui to keep everyone fed). Vivian brought a bunch of beers and before I knew it I was teaching them American drinking games. By the end of the night, Dan was serenading us with Bohemian Rhapsody and John was passing around the Cubans. One of the most random Wednesday nights I’ve had in awhile.

Thursday: Spent the morning at a EU CDM conference. Met the AmCham environmental forum chair, who I had, quite coincidentally, just emailed right before I left for the conference. We’re going to meet to talk about reviving the forum and seeing if I can get more involved. Excellent.

Thurs evening, Ali and Courtney threw the big Ogilvy media party. Since they organized it, they were able to slip me in-- which got me free food, drinks and a party bag. The party was pretty cool, they ordered eight different kinds of Belgian beer and had a real American grill man making the best burgers I’ve had in months. Ran into some of my old Edelman colleagues and spread the carbon trading gospel (and my business cards) to all the foreign correspondents. It’s fun hanging out with journalists. It reminds me that Beijing is connected to the outside world. I talk to someone, hear what they’re up too. Then I read about it on front page of the Wall Street Journal three days later.

Friday: Went to another conference in the morning. Terribly boring-- I left after the first coffee break. But it wasn't a complete waste of time- they gave me a free computer bag, which I desperately needed. Had to write a semi-annual self assessment report for John. It was a weird thing to write. My major accomplishment of the six months on the job is that I now know what I'm talking about. How do you tell your boss-- "Well, I had no idea what I was doing six months ago. Now at least I've gotten the hang of it. I know I have a long way to go " ??

After a pretty crazy week, spent last night chilling at Ali and Gabe's, watched Grey's Anatomy (thank god for pirated DVDs) and ordered in Italian food. Nice way to round out a busy week.

Still raining. Looks like I'm not going anywhere anytime soon.

So, what do you do?

Wrote this carbon market into for a British publication called China Dialogue. Hasn't been published yet, so I hope I don't get knocked for plagarism...

So, what do you do?

That inevitable question.

PR. Investment Banking. Consulting. Journalism. IT. My friend’s answers usually get a pleasant smile and nod.

My answer, “carbon trading,” rarely gets that reaction. I always wince a little before I throw it out there. Most people ask me what on earth carbon trading means. Others are horrified that I am paying Chinese companies to pollute. Once, a particularly pugnacious (and intoxicated) compatriot threw a fist at me. It’s not often that I hear, “Wow, carbon trading, that’s great.”

In a carbon market, an entity sets or is given a limit on how much greenhouse gas it can emit. If it isn’t able to meet this target in house, it can buy emission reduction credits from somewhere else. Carbon trading is the buying and selling of those reduction credits, known as carbon credits. Here in China, we develop emissions reducing projects that generate carbon credits used to offset emissions elsewhere.

Most of the time, I dig myself in deeper with that follow up. Buying and selling emissions reductions? Outsourcing to China? It just doesn’t go over well.

The scientific community has come to a consensus that climate change is real and its effects catastrophic. The carbon market is a very active response to the problem. According to Point Carbon, the leading carbon market news provider, the market traded 1.6 billions tonnes of CO₂ or equivalent in 2006, worth about 22.5 billion euro. That’s a lot of money in the name of climate change. So where is it going and how it is it making a difference?

Here in Beijing, day in and day out, I see firsthand what that carbon money is doing. China, with the world’s fastest growing economy and largest population, is poised to overtake the United States as the world’s greatest emitter of greenhouse gases. It is crucial that China build the infrastructure needed to curb its greenhouse gas emissions growth. Nonetheless, despite stellar year on year economic growth rates, China’s per capita GDP is still only one sixth that of the United States.

In 1997, when the Kyoto Protocol was being negotiated, parties were concerned that specific emissions caps would handicap economic growth for developing nations. Therefore, they did not give developing country signatories specific limits on their greenhouse emissions. To encourage the reduction of emissions in these developing countries, the Protocol established the Clean Development Mechanism, or CDM. This mechanism gives China, and all other developing countries, the practical assistance it needs to stop emissions without unfairly hindering economic growth.

The Clean Development Mechanism, and the carbon market in general, is based on the fact that the gases warming our planet are all being dumped into the same place, our atmosphere, regardless of where they come from. Abatement is abatement, regardless of where it happens. Therefore, under CDM, stakeholders from developed country signatories to the Kyoto Protocol, like the UK, invest in and transfer technology to greenhouse gas abatement projects implemented in developing country signatories like China. If these projects prove that they could not have been implemented without CDM support, they are issued carbon credits that can be used by developed countries to stay under their emissions caps.

CDM, simplified, works like this: I am a utilities company in the UK, a developed country signatory to the Kyoto Protocol, and am allowed to emit ten tonnes of CO₂ this year. I emit eleven. It costs me fifty euros to reduce a tonne of CO₂ at home. I pay a company in China, a developing country signatory, twenty euro to help build a wind power project. The project generates electricity that would have otherwise been generated by burning coal. Less coal is burned and the project reduces the amount of CO₂ that would have been emitted into the atmosphere by one tonne this year. The project would not have happened without my financing, so the worldwide net reduction in CO₂ emissions is still the same. This CDM funding gives China real incentives to develop the technology and training needed to get that wind project off the ground. Once it is up and running, companies gain valuable experience, which can be reapplied to more clean energy projects.

At the center of the mechanism is an intricate regulatory system that ensures project quality. Getting projects registered through the CDM process requires the support of both the developed and developing country host parties, verification by a certified third party standards body and the ultimate approval of the United Nations. Baseline emissions, what would have been emitted without CDM, must be clearly measurable and the project must be able to be strictly monitored. Finally, combinations of financial, investment, technological or common practice barriers must be strong enough to block the implementation of a project without CDM support.

So what is being done in China? One type of project far and away gets the most attention: the highly profitable HFC-23 destruction. Although the environmental benefits of destroying this highly potent refrigerant are unquestionable, the large amount of money HFC-23 factory owners make off CDM is highly controversial. Yet, because these projects are so profitable, they were developed first. HFC-23 is now the poster child for CDM.

Such a strong focus on HFC-23, however, presents a seriously skewed picture of CDM’s impact. China does hold a greater share of HFC-23 CDM projects than any other country in the world. Yet, of the eighty five projects in China that have passed through United Nations registration, only eight are HFC-23 destruction projects. HFC-23 project development has all but trickled to a halt. Four hundred and eighty eight new projects in China are preparing registration applications. Three of them are HFC-23 projects. Two hundred and sixty one are renewable energy projects.

Instead, the vast majority of CDM projects will make long term contributions to curbing China’s emissions growth. Many projects generate electricity through renewable sources, such as hydropower and wind power. The electricity generated by these sources displaces the electricity produced from fossil fuel burning power plants, which, in China, tend to burn coal. Less coal is burned and greenhouse gas emissions are thus reduced. Other projects generate electricity from waste heat recovered from industrial processes. Others capture methane gas emitted from working coal mines and utilize it to generate electricity. The owners of these projects, no matter how committed they are to the issue of climate change, aren’t able to practically implement them without financial support. The carbon market, through CDM, provides that. The fate of CDM after 2012 is unknown. Regardless of what happens, the infrastructure created by CDM projects will still be in place.

The impact of the carbon market extends beyond curbing Chinese emissions. The truth is, there just isn’t the space in a short article, or a dinner party introduction, to fully argue the merits and flaws of the carbon market. Nevertheless, just opening the conversation corrects misconceptions and starts a real discussion on how we can do it better. Let’s keep the dialogue going.

My First Trip to the Great Wall

Sitting at work on Friday afternoon, struggling over an article on carbon trading for the British Chamber magazine that just isn't going where I want it. Dan, the other office laowai (foriegner) poses the question--

Hey Leigh, wanna go for a run on the Great Wall tomorrow?

The smog had been suffocating. My lungs were still aching from the basketball game the night before. Would be nice to get out of the city and get a run in some quality air.

Neither of us have a Chinese drivers license, nor could we get a hold of any of the gypsy cab drivers we knew to take us there. John, our boss, happened to be walking by our desks in the what next brainstorming session and offered to loan us his car and his driver, Master Wu.

Master Wu works around the clock-- taking John to work, chauferring the rest of us around to meetings all day, then taking John to the business dinners and drinks that last until late. On the weekends, he picks up John and Linghui's groceries and takes Linghui's kids to soccer. And now, because we feel like going for a run, he's going to get up at the crack of dawn on a Saturday and take us to the Great Wall. I awkwardly stand there while John orders Master Wu to do this. But I don't stop him.

Saturday morning, 6am, he's picking us up in front of the CNOOC building. He comes with with two teenage kids-- his daughter and his nephew, who want to join in on the fun.

We have a great time on the way up. We hear all about the kids' dreams for the future. Both were born in the very poor Anhui province and came to Beijing as babies. This means that they have a rural hukou, or identity card, which makes education, housing, healthcare, everything exponentially more difficult for them than a "real" Beijinger. Nevertheless, they see the world at their fingertips. The girl wants to be a doctor or go into the foreign service. Being either one of those things is hard, she says, but I work hard. Master Wu beams while she practices her English with us. The boy tells us he wants to be a businessman. He wants to study process management in college and dreams of going to Italy.

At the wall, Dan and I pay for the kid's entry tickets. We run, the kids walk. 10km, up and down the mountain peaks. My first time to the Great Wall. The run is killer, but it's beautiful.

Afterwards, we're all starving, so Dan and I take everyone out to lunch. What dishes do you want? Order whatever you like. What do you want to drink? Whatever you want. Master Wu and the kids are very deferential to us. It's clumsy. Dan and I are foreign. We don't know what every dish on the menu means. We don't know if what sounds good to us sounds good to them. The qingke (treating someone to a meal) etiquette is something we aren't totally clear on. Usually, when we treat our Chinese friends, if we ask, they jump in and help us order the best stuff. They know we're still learning the thousands of of Chinese dishes and how to read them off menus. But Master Wu doesn't do this.

I suddenly feel very class aware and very awkward. We paid for their tickets and their lunch. We are foreign twenty somethings in their country and the 200 kuai (about $35) it cost for it all is nothing to us. Master Wu has at least twenty years on us and makes about 1000 kuai a month (if that). The 200 kuai is alot to him. Are we showing him our appreciation for coming out and taking us to the wall? Are we two snotty kids, taking away a piece of his dignity by not letting him pay? I don't know.

Dan and I rattle off some standard dishes-- stir fried egg and tomato, aromatic eggplant, kung pao chicken, dumplings. We're back to having a merry old time. We hear about everyone's favorite kind of food, meanest teacher and favorite movie. The four of us pass out on the car ride home.

Later that afternoon, I get a call from John, asking how it went. I tell him we had a fabulous time and thank him for letting us borrow the car and *wince* Master Wu.