VZCZCXRO0780
PP RUEHAST RUEHHM RUEHLN RUEHMA RUEHPB RUEHPOD RUEHTM
DE RUEHBJ #4222/01 3190654
ZNR UUUUU ZZH
P 140654Z NOV 08
FM AMEMBASSY BEIJING
TO RUEHC/SECSTATE WASHDC PRIORITY 0862
RUEAEPA/HQ EPA WASHDC
RHMFIUU/DEPT OF ENERGY WASHINGTON DC
RUEATRS/DEPT OF TREASURY WASHDC
RUEHCN/AMCONSUL CHENGDU 9530
RUEHGZ/AMCONSUL GUANGZHOU 0004
RUEHGH/AMCONSUL SHANGHAI 9515
RUEHSH/AMCONSUL SHENYANG 9193
RUEHHK/AMCONSUL HONG KONG 0725
RUEHIN/AIT TAIPEI 7092
RUEHZN/ENVIRONMENT SCIENCE AND TECHNOLOGY COLLECTIVE

UNCLAS SECTION 01 OF 04 BEIJING 004222 
 
SENSITIVE 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: SENV ENGRD EAID CH
 
SUBJECT: ENERGY AND ENVIRONMENT DISCUSSED DURING 
CONGRESSIONAL-EXECUTIVE COMMISSION ON CHINA (CECC) VISIT TO BEIJING 
 
BEIJING 00004222  001.2 OF 004 
 
 
 
¶1. (SBU) SUMMARY: During a visit to Beijing on October 26-30 (after 
stops in Chengdu and Shanghai), Congressional-Executive Committee on 
China (CECC) members Jonathan Stivers (Senior China Advisor to House 
Speaker Nancy Pelosi) and Gerry Waldron (Staff Director and Chief 
Counsel, House Select Committee on Energy Independence and Global 
Warming) met with members of China's Ministry of Environmental 
Protection (MEP), National Energy Administration (NEA), the Foreign 
Affairs Committee of the National People's Congress (NPC), and 
several environmental NGOS. The purpose of the CECC visit was to 
discuss potential cooperation between the U.S. Congress and Chinese 
government officials on energy efficiency and environment 
protection, assess China's key environmental challenges, and 
determine how the U.S. Congress might engage in the Strategic 
Economic Dialogue (SED). NGOs and government officials provided 
thorough briefings on China's energy efficiency efforts, 
environmental NGO activities in China, environmental challenges 
associated with growing energy demand, and China's environmental 
protection efforts and goals.  All expressed the desire to expand on 
existing joint environmental cooperation and to explore new joint 
cooperation efforts.  While eager to discuss these efforts, NGOs and 
Chinese government officials acknowledged they had no prior contact 
or experience with the U.S. Congress on energy or environmental 
issues, but were willing to explore joint cooperation with Congress, 
especially after the U.S. elections. END SUMMARY. 
 
¶2. (SBU) During a limited country team briefing hosted by the 
Ambassador, the visitors solicited viewpoints around the table on 
the utility of the SED process (currency, bilateral investment 
treaty, sovereign wealth fund), environmental concerns (including 
global warming, enforcement issues, and potential U.S. exports of 
environmental technology to China), China's energy needs 
(reliability of data, price controls), and China's response to the 
global economic downturn.  Stivers told the LCT that Speaker Pelosi 
was considering a trip to China in summer/fall of 2009, and part of 
the purpose of his travel here was to advance the trip, in 
particular looking at whether cooperation in energy and environment 
might be used as "positive" areas around which to focus the trip. 
 
 
¶3.  (U) At a NGO Roundtable hosted by the Brookings/Qinghua 
University Center for Public Policy, the environmental NGO community 
was represented by the China Foundation for International Strategic 
Studies, Beijing University, the Global Environmental Institute 
(GEI), the Natural Resources Defense Council, the Sustainable 
Development Consultancy, and the World Resources Institute.  In 
opening remarks, Stivers conveyed that Speaker Pelosi has a great 
interest in the work the NGO community is doing in China, 
particularly in the areas of energy and the environment, and 
emphasized the U.S Congress's desire to find ways of working 
together.  The NGO representatives responded with an assessment of 
the progress they have made over the last ten years, particularly in 
greater information exchange and joint research projects with the 
government. On the environmental side, NGO participants also 
emphasized that the most effective role for them will be to continue 
developing unbiased information and innovative solutions, and 
bringing this type of work to the attention of key decision makers 
within the Chinese government. 
 
¶4. (SBU) Some NGOs said they are encouraged that Chinese environment 
officials are becoming more receptive to NGO environmental 
assessments, particularly the NGOs that are viewed as "impartial," 
and take a non-advocacy tone in dealings with the government. NGOs 
also see opportunities in their feeding environmental information 
into the political system by forging greater ties to academic and 
research institutions, given that, according to some of the NGOs 
present, environmental policymakers are talking more and more with 
these groups. However, the representative from GEI opined that 
environment officials do not generally seek NGO assessments on 
environmental issues; instead, the mass media will be the key to 
greater public advocacy on environmental issues, and therefore 
become the means by which greater progress in dealing with China's 
environmental challenges will be made. 
 
¶5. (SBU) All of the NGOs represented at the Brookings/NGO briefing 
agreed on the need to encourage continued cooperation within the NGO 
community and for the United States to maintain momentum and 
"sustained support" regarding environment and energy issues in 
China, as it will be years before China will be able achieve 
measurable progress in key areas, including calculating carbon 
 
BEIJING 00004222  002.2 OF 004 
 
 
dioxide emissions at a national level. Several NGO reps cautioned 
Stivers and Waldron that using U.S. models for meeting environmental 
standards as measures for progress in China will not likely be 
appropriate or effective. 
 
--------------------------------------- 
(SBU) STRATEGIC ECONOMIC DIALOGUE (SED) 
--------------------------------------- 
 
¶6.  (SBU) At a briefing with Embassy ECON, ESTH, and Treasury 
officers, the visitors reviewed the current status of the SED 
process and discussed how Congress might become more engaged in the 
SED. Stivers said that Congress feels it could be more engaged in 
the SED process than it is now, possibly as observers, and could 
help build on what has already been done, particularly in the areas 
of currency issues, sovereign wealth funds, market access, WTO 
commitments, consumer safety issues, IPR, and energy and environment 
issues.  Stivers then raised concerns about whether actual 
accomplishments had been achieved by the SED. 
 
---------------------- 
CHALLENGES FOR THE MEP 
---------------------- 
 
¶7.  (SBU) In a meeting at the Ministry of Environmental Protection 
(MEP) hosted by Mr. TIAN Weiyong, Deputy Director General, 
Environmental Supervisory Bureau, Stivers began by congratulating 
MEP on its being raised to Ministry level in March 2008 from the 
former State Environmental Protection Administration (SEPA), 
emphasizing that United States-China environmental protection 
cooperation has made big strides over the last few years. Stivers 
added that they had traveled to China to explore further 
Congressional-Chinese cooperation on global warming and energy 
issues, to discuss challenges China faces regarding environmental 
protection, and to explore opportunities for greater United 
States-China joint environmental cooperation.  According to Tian, 
China takes environmental preservation seriously and that 
sustainable development is an important part of China's 
environmental strategy. Senior MEP officials emphasized that China 
has made progress in reducing industrial pollutants and in carrying 
out its water pollution abatement effort. But pollutants included in 
the 2005-2010 Five-Year Plan are currently limited to sulfur dioxide 
and COD (chemical oxygen demand, used to measure water quality) and, 
while MEP and the U.S. Environmental Protection Agency (EPA) have 
jointly worked on this effort, any decision to expand reduction 
targets to include other pollutants in the next five year plan will 
have to be decided by the NDRC. MEP reps insisted that with progress 
made dealing with water and atmosphere pollution, reducing other 
pollutants will eventually emerge as a higher priority in China for 
the MEP agenda. 
 
¶8. (SBU) Tian acknowledged that China's environmental problems had 
increased and in some areas worsened over the past few years, but 
insisted that the central government and local authorities are 
trying to improve environmental quality across the country.  The MEP 
monitors China's environment regionally via six MEP regional offices 
set up to monitor environmental protection at the local level to 
intensify environmental regulatory enforcement.  When asked about 
exploring joint cooperation initiatives with the U.S. Congress, MEP 
officials said that they had no prior contact with the U.S. Congress 
on environment and energy issues, only experience with the Executive 
Branch.  Their experience with the U.S. Environmental Protection 
Agency (EPA) had proven quite beneficial for China in the past, 
especially in the area of environment legislation and law 
enforcement.  Other areas of MEP-EPA cooperation include water 
pollution, atmospheric pollution, toxic disposal, and solid waste 
disposal. Tian said that MEP values its relationship with EPA very 
highly, and hopes to draw on EPA environmental management strategies 
and on U.S. technology to help implement China's enforcement 
mechanisms for improving corporate environmental enforcement and 
cooperation within China. 
 
--------------------------------------------- ---------- 
NEA:  EMPHASIS ON ENERGY EFFICIENCY AND DIVERSIFICATION 
--------------------------------------------- ---------- 
 
¶9. (SBU) After welcoming remarks from Mr. SUN Qin, Deputy Director 
General of the National Development and Reform Commission's (NDRC) 
National Energy Administration (NEA),  Stivers praised United 
States-China (and potential U.S. Congress-Chinese government) 
 
BEIJING 00004222  003.2 OF 004 
 
 
environmental cooperation efforts, emphasizing that his visit comes 
in the spirit of understanding and is aimed at learning more about 
how decisions are made in China on challenges associated with energy 
and environment issues. Stivers praised the dedication of Chinese 
officials toward finding ways forward on common energy and 
environment issues, particularly on energy efficiency. Specifically, 
Stivers was interested in what incentives were in place for local 
governments to meet energy efficiency standards.  NEA officials 
responded that since 2008-2020 is projected to be a growth period 
for China's economy, NEA must ensure the country's energy supply. 
To do this, there will be added emphasis on energy conservation, 
diversity of supply, and environmental protection.  Policies have 
been put into place encouraging specific energy efficiency targets, 
but some provinces have failed to meet them.  Sun said the 
government is gradually phasing out high-emission projects by 
shutting down small coal mines and oil refineries and by launching 
some highly- efficient power generating units.  Sun also shared 
information on the Thousand Enterprises project, whereby 1,000 
enterprises are required to upgrade emissions reduction capability 
on a regular basis to reduce pollution. 
 
¶10. (SBU) Sun stated that China is diversifying its energy mix by 
bringing more hydro power (145 gigawatts (GW) generated in 2007), 
wind power (China generated six GW by the end of 2007 and aims to 
develop between 30-50 GW by 2020), and solar power (currently about 
1 gigawatt) online, as well as implementing an ambitious nuclear 
power program.  Sun acknowledged that while renewables are 
important, they will only make up a small percentage of China's 
energy production over the near term due to the high cost of these 
technologies and problems integrating renewables-generated 
electricity into the power grid.  He further stated that that China 
will remain highly dependent on coal, which currently accounts for 
70 percent of the country's power generation capacity (China 
produces 40 percent of the world's coal - about 2.3 billion tons per 
year).  Given its abundance of coal resources, Sun said that China 
is striving to become a leader in clean coal technology. China is 
currently involved in a carbon capture and storage project with 
Australia aimed at capturing 3,000 tons of carbon dioxide per year. 
 
 
¶11.  (U) In a brief discussion on biofuels, the NEA officials said 
that nine provinces in China would soon be requiring at least 10% 
ethanol in gasoline available for sale in those localities.  Staff 
Director and Chief Counsel Waldron of the House Select Committee on 
Energy Independence and Global Warming also described U.S. efforts, 
including that of Congressionally-mandated targets of 26 billion 
gallons of ethanol in use by 2020 and encouraging specific 
(non-corn) sources of biofuels.  Sun concluded the meeting by 
affirming that, in his view, the SED has been crucial in ensuring 
that the United States and China fulfill common responsibilities and 
goals in energy and environment for the benefit of the world.  He 
also stated that the SED process remains a good forum to enhance 
mutual understanding, maintain a constructive dialogue, and reach 
consensus on energy and environment issues important to both 
countries. 
 
------------------------------------ 
NPC: COOPERATION DESPITE DIFFERENCES 
------------------------------------ 
 
¶12. (SBU) At a meeting with the Foreign Affairs Committee of the 
National People's Congress (NPC), chaired by Deputy Director Mr. MA 
Wenpu, both sides agreed that tremendous opportunity exists for 
Congress to become more involved in cooperative efforts, including 
those found within the Strategic Economic Dialogue. Ma emphasized 
that China and the United States have seen the benefits of mutual 
cooperation on many fronts, including in economics and trade, 
military and anti-terrorist issues, and in resolving issues in 
international hotspots.  The NPC welcomes good relations with the 
U.S. Congress and seeks opportunities to increase mutual 
understanding, trust, and bilateral cooperation.  Ma stated that 
while differences exist between the United States and China on Tibet 
and arms sales to Taiwan, the NPC welcomes exchanges with the U.S. 
Congress as a way for China to learn about U.S. experiences 
conducting its legislative process and governmental oversight, as 
well as possibly pave the way for cooperation in international 
challenges. He cautioned that the recent decision to sell arms to 
Taiwan "is not consistent with the trend of the times, is not 
conducive to peaceful development, and sends the wrong signals to 
Taiwan." Stivers agreed there is bound to be disagreement on some 
 
BEIJING 00004222  004.2 OF 004 
 
 
issues, but with continued dialogue, Congress hopes to work with 
China to find solutions to common problems, including energy 
efficiency and independence and global warming. Regarding a possible 
visit of Speaker Pelosi, Ma said he would report these plans to the 
NPC, and that regardless of the outcome of the U.S. election, the 
NPC is committed to ongoing cooperation with the United States. 
 
 
¶13.  (SBU) COMMENT: Chinese government and NGO interlocutors were 
anxious to convey to the CECC visitors the importance of the United 
States and China continuing their high-level economic dialogue 
established by the SED process, not only because of its success so 
far in raising economic issues to the most senior levels of both 
governments, but also because of the potential benefit that a 
SED-like process could have on future cooperation efforts on energy 
efficiency and global warming.  After the U.S. election, based on 
the tone of the meetings described above, Chinese officials will 
likely be looking hard at the status of the SED in the new 
Administration, and at which part of the Administration takes the 
lead in keeping the SED process going.  END COMMENT. 
 
¶14. (U) The CECC delegation has been sent an information copy of 
this message. 
 
RANDT