California Could Profit from China's Pollution Problem
With China's political leadership talking about cleaning up the country's air quality, the California Governor will have the chance on his visit to translate his state's experience with the issue into valuable business deals.
By Anthony York
As Gov. Jerry Brown tours some of China's economic hubs this week, he is breathing the kind of heavy, soiled air that blanketed Los Angeles decades ago.
The soot and smog that are byproducts of this country's industrial progress are choking its people and threatening its economy. Chinese leaders are talking openly about the need to clean up the air, and to learn how from California.
So Brown and a large delegation of business and political leaders have come to lend a hand, as well as to leverage China's need into business deals.
Brown made his agenda clear not long after he arrived in Beijing, a city so gridlocked in traffic that parts of his schedule are being upended to account for the time he spends trapped in it.
"We're from California," the governor said, addressing the dozens of delegates at a lavish dinner Tuesday in a restaurant that 400 years ago served as a palace for a Qing Dynasty prince. "We're not interested in politics. We're interested in business."
On Wednesday, he held a private meeting with Environmental Protection Minister Zhou Shengxian. They signed a nonbinding agreement "to enhance cooperation on reducing air pollution," the first such accord between China's government and a U.S. state and one of several Brown is scheduled to secure while here.
Under the pact, California will help China set up institutions to regulate air quality, similar to those the state has established, and the two nations will engage in research projects "of mutual interest."
Later in the day, the governor addressed about 250 businesspeople, mostly Americans, in a ballroom at the Peninsula Hotel, where the shops sell Louis Vuitton and Chanel. The first question concerned pollution.
"The fact of the matter is, that can be cleaned up," Brown said. Compared with the days when Los Angeles was dense with smog, "the air is well over 90% cleaner... with millions of more cars on the road," he said.
The Chinese have expressed eagerness to adopt more clean technologies and use them to enlarge that part of their economy. The nation is ranked by the accounting firm Ernst and Young as the world's most attractive market for renewable energy projects.
And California, which bet heavily on the development of clean technologies, wants to export them as widely as possible. The embrace of California know-how by the world's most populous country -- and recent convert to green energy -- can help bolster the state's reputation as an international environmental trailblazer.
As Brown talks about environmental protection with officials in Beijing, Shanghai and Guangdong, he is expected to find receptive audiences for the California prescription: regulations that foster cleaner-burning power plants and factories, requirements for more energy from renewable sources and an emphasis on conservation.
"Everybody's got to do the maximum. China is key," Brown told reporters recently. "They're crucial to even our plans."
China is more open to help from California than from elsewhere, experts say.
"California is perceived in China as a leader in cleaning up the environment without any ulterior motive," said Yunshi Wang, director of the China Center for Energy and Transportation at UC Davis. "If these requests or demands come from Washington or Brussels, there's some attitude in China that it's some kind of effort to slow them down economically."
China is responsible for burning nearly half of the world's coal and producing nearly a quarter of the carbon dioxide, a gas scientists say is a leading cause of global climate change. Those emissions have grown as the nation's economy has boomed over the last decade and more people have pushed into the teeming cities from rural areas.
That movement and the country's growing prosperity have made China the largest car market in the world. But much of the clean-air technology in new cars is counteracted by China's dirty fuel. Brown had remarked on his arrival that the masses of bicyclists he saw here in the 1980s seemed to have been replaced with drivers.
"It looks like any city in Europe or the United States," he said. "There's been a radical transformation."
Even on days with relatively good air quality, like the ones cold winds brought to Beijing this week, many residents wear surgical masks when they go out. Growing citizen anger, evident in violent protests over the last year, has spurred the government -- unwilling to impose strict environmental regulations in the past -- to action.
"Air pollution has moved to the top of the policy agenda here," said Barbara Finamore, who is based in Hong Kong as Asia director of the Natural Resources Defense Council.
In the Los Angeles Basin in 1980, smog levels for eight-hour periods violated the federal standard 98 times. In 2012, that happened just once, according to figures from the California Air Resources Board, chief enforcer of the state's environmental laws.
By contrast, smog is getting worse in Beijing, a city of more than 20 million people. This year, the U.S. Embassy here, which has begun posting pollution levels on its Twitter feed, reported an air-quality rating of 755 on the U.S. Environmental Protection Agency's index. Anything above 300 is considered hazardous.
Similar problems beset other cities. The air in Chongqing and Guangzhou, a southern city of more than 12 million people that Brown will visit this week, is sometimes worse than Beijing's, according to official Chinese news reports.
Brown has acknowledged the limits of the compacts he's signing. But he mused before leaving Sacramento last week that they could help lay the groundwork for more significant accords between Washington and Beijing.
"There's tensions between the United States and China," Brown said. "California is not in that geopolitical domain, and I think we can be a good bridge to keep open a very friendly and positive relationship."
Among the things California will do is provide guidance for Chinese provinces trying to develop a pollution-credit market to reduce harmful emissions. California's system, the second largest in the world, limits the volume of air pollutants that may be released in the state each year but allows high polluters, such as some power plants and factories, to buy permits to emit more than their share.
This week, Brown will sign agreements to share information with leaders in the southern province of Guangdong, who are working on a carbon-trading market. The governor, accompanied by advisors who can offer expertise, is expected to invite Chinese officials to California this year to learn from state regulators and scientists.
Among those here who see business opportunities in China's environmental needs is Mike Hart, president and CEO of Sierra Energy, which specializes in converting trash into energy. His firm is working on a deal with a Chinese company to build a plant that will convert 500 tons of trash a day into electricity to power about 20,000 Chinese homes. Hart estimated the deal is worth about $80 million.
Also on the trip is Margaret Wong, CEO of the Sacramento-based McWong Environmental Technology, which specializes in wastewater treatment.
Wong already does extensive business in China, including numerous projects with Baosteel, the government-run steel producer that is third-largest in the world. And she has signed a $100-million deal to build and operate a water treatment facility at a chemical plant in Anhui province.
(c)2013 Los Angeles Times