The Chinese saw that Climate Change was the platform for them to assert themselves on the ‘world leadership’ stage.
From their perspective – having been constantly pilloried for a decade ofer:
1. Industrialization that sucked global manufacturing from the West to its coastal production zones – of course Walmart, Nike etc also benefit
2. Making so much money from the export of goods that the US constantly demands revalue its currency so that it will owe Beijing less
3. Human Rights: Treating Workers/Uighurs/Tibetans/Dissidents/Falongong (& just about anyone the media & Congressmen thought was being oppressed) {NB: I’m simply stating a perspective)
4. Being the world’s largest polluter in absolute terms (never mind that per capita the US is a much higher polluter)
- Side note: Has anyone noticed that whenever CNN talkes about China’s energy industry it always refers to “China’s reliance on ‘dirty coal’ for power generation” – like the US doesn’t get 90% of its electricity from ‘dirty coal’

So with those odds stacked against it, China needed a platform, other than the Olympic games, to announce its arrival as a world power.

It found it, not in Copenhagen, but in Bali in Dec 2007 when it rallied the developing world & the EU boxing the US into a corner for failing to commit to any CO2 reductions & (like N Korea) refusing to ratify Kyoto.

It is a position China has heald steadfastly to ever since.

Both Clinton & Obama made trips to Beijing to discuss the possibility of a Sino-US side deal before Copenhagen, they left with no such deal. However, it seems inconceivable that while in Beijing they had no insight into the position China would take in Copenhagen! Hell, the Chinese leadership publicly stated it at just about every opportunity!

At the UN Conference in NY, Wen announced China’s ‘voluntary emissions cuts’ & told the world’s leaders what their stance would be….
The head of the UK charity Oxfam summarized it qute wekk “Everybody played nice at the UN Climate Change party – but only China and Japan brought cake!”

So on to Copenhagen:-
- Clinton’s announcement of a $100 billion fund for the developing world was seen by the developing world as a scam to buy them off – it wasn’t even the US’s money: the EU would contribute some $9 billion, Japan $11 billion… the US would throw in some $3.5 billion, of course very little of those pledges would ever be ponied up & what was wouldn’t be dispersed (see: http://news.bbc.co.uk/2/hi/business/8376874.stm)

- The US offer to cut emissions (it was hardly a pledge) by 17% was little more than a two-card-trick based on 2005 emissions when set against the EUs pledges to cut from 1990 levels it works out that the US was really offering 4% (see: http://www.newscientist.com/article/dn18198-obama-offers-fixed-targets-for-us-emissions-cuts.html)

So were I a Chinese negotiator, I’d have blocked any binding agreement that would let the US get away with committing to a paltry 4% cut & sure as hell I’d have demanded that it sign up to Kyoto first (it STILL has 2 years to run).

On reflection, I think China played its cards well by blocking a binding agreement & forcing the US to go back & come up with a more substantive ‘real’ commitment – after Congress has approved it.

Possibly China’s only mistake at Copenhagen was that it didn’t have a slick impeccable English speaking spokesperson to front their argument, they didn’t seem to have anyone – I don’t recall any Chinese delegates being interviewed by the international media (there was the lady from The Climate Group, but that’s an international NGO & it seemed that the media trotted her out for lack of anyone more official).

A trade war? Possible, but consider this: in a War the winner tends to be the one who has the largest war-chest, and currently who is that?

This perception of who has the moral high ground in this climate change dispute is widely accepted in the developing world, including China.

China may not be able to prevent a trade war, but if such a war does come, we can be sure that China will mobilize its side with a sense of climate justice based on morality and equality. The so-called carbon tariff is seen as another ploy in a never-ending struggle between countries to maximize their interest. Today the trick is anti-dumping. Tomorrow it will be carbon tariff. The day after tomorrow it will be something else.

Last but not least, whoever starts a war using whatever excuse, including carbon tariff, needs to understand that retaliation will be certain. The opponent also holds substantial leverage: trillions of dollars worth of government bonds, withdrawing from intellectual property regimes, etc.

It is not wise to go down that path, and it is not wise to encourage anyone to go down that path.

I agree that there is a possibility of a trade war with China, but I think it’s too early to tell.

The House bill you spoke of definitely sent a strong signal to China: no commitment to emissions reductions will likely mean import tariffs on Chinese goods. There is a high chance that carbon-based import tariffs will figure in the final climate bill (China says this goes against WTO regulations, but I doubt that matters). Similar language is included in the senate bill, and its this measure has quite a bit of support. Although Obama criticized the measure just after the bill passed, saying this was no time to send out protectionist signals, if his uncritical support of the healthcare bill offers any indication of his eagerness to pass bills that are too big to fail, I wouldn’t be surprised if he signed off on it. And to make matters worse, it still looks like the U.S. and China are far from agreeing on how to verify emissions reductions.

But if I had to make a prediction, I’d say the U.S. and China will come to a compromise before they reach the brink of a trade war. Compromise. That’s something neither China nor the U.S. was willing to do in Copenhagen. Things look no better for either state than they looked last week. That’s why I’d give them both a notch in the Loss column.