Kyoto, Australia and honesty

The Australian government prohibits nuclear power and has no nuclear input to offset emissions from its base load power. With the exception of the variable input from Snowy Mountains Hydro and local domestic hydro in Tasmania, Australia's entire energy base load will be subjected to cuts under Kyoto. Solar and wind are minor contributors. In Australia, our per capita emissions represent 16 tonnes of carbon dioxide equivalent. In the OECD, it is only 11.5 tonnes carbon dioxide equivalent helped by a sizable nuclear component.

China's Kyoto windfall

China signed and fully supports Kyoto. Unlike developed nations the rapidly developing giants, China and India, are exempt from the initial 5.2 per cent reduction target of six greenhouse gases by 2008-2012, based on 1990 levels.

China's exemption presents it with a massive economic windfall by enhancing its price competitiveness and increasing exports to fuel foreign consumer spending. It will also experience a jump in foreign direct investment.

If manufacturing and service industries of the developed nations in Kyoto are to produce competitively priced goods and return profits to shareholders the only option will be to outsource their bases to China, India, Vietnam, and so on. The downside is an increase in emissions for the manufacturing-base countries, and a decline in domestic job opportunities and GDP in developed countries. What is Mr Rudd's strategy to confront this possibility? Maybe the answers lie in the Australia 2020 Summit perhaps?

How could China refuse to submit to Mr Rudd's charm and diplomatic persuasion to commit to emission cuts beyond its current obligations? The answer is "easy” Any commitment that would decrease China's high economic growth rate will jeopardise the ambitious growth goals of the 10th and 11th 5-Year Plans. Especially with high inflation and the impact of lower consumer spending in the US.

Hu Jintao has a very ambitious vision for China 2020. During the 17th NPC and presentation of the 11th 5-Year Plan, he appeared to reconfirm the commitment to "quadrupling the GDP value by 2020" as set out in the 10th 5-Year Plan. His ability to play the game however, was highlighted by his subtle change in terminology when he proclaimed the goal was to "quadrupling the per capita GDP by 2020" in place of "quadrupling the GDP value by 2020".

That is a much higher growth target than that set earlier. No one is going to convince those in the Zhongnanhai to give that up.

Signatories to Kyoto strengthened China's hand by granting it the right to continue on a path of massive emission increases that undermined the efforts of the developed nation signatories. The impact of this becomes clear when comparing the differential in growth between 1990 and end 2007. The OECD's 2007 model of doubling global GDP by 2030 will result in massive increases in total global emissions.

China's increasing emissions

China passed the US as the world's biggest carbon emitter and now wears the crown of the world's biggest single polluter of air, soils, rivers and marine environments.

Despite this China is still committed to high economic growth through to 2030. To meet its growth plans China intends to achieve 67 per cent urbanisation by 2030. A review of China's population now confirms the 1.5 billion mark will be reached prior to 2030. Accommodating such growth and demographic change will involve the construction of the equivalent of 1.5 cities the size of Beijing each year over a 14-year period to 2020. That alone will create a massive increase and ongoing demand in energy, steel, glass, cement, timber, plastics and chemicals. This in turn will increase emissions and demands on a rapidly shrinking water resource.

Such change and surge will increase the already massive growth in China's private car ownership, exacerbating emissions and resulting in disproportionate use of resources such as water and energy as rural becomes urban. Although official figures suggest that 140 million cars will be on China's roads by 2020, experts consider this too conservative when taking into account the growth plans for 2020.

Much has been made of China's huge investment in renewable and alternative energies. Except for some PR exercises, it is limited only to hydro and wind. As for nuclear, China has 11 reactors in operation and eight under construction. By 2020 the intended goal is 40 nuclear reactors with two to three being commissioned each year. There is clear evidence of the use of selective data in official statements, but by 2020, 92 per cent of China's base load will continue to rely on coal. Nuclear and renewables will contribute only 4 per cent each.