The UN Climate Summit and the Future of US-China Collaboration

SAN FRANCISCO – Asia Society

18 December 2015

BRUCE PICKERING: My name is Bruce Pickering, I’m the Vice President for Global Programs for the Asia Society and the Executive Director of the Asia Society. Normally, I’m in the California Centre which is based in this building actually. It’s my pleasure to welcome the Honourable Kevin Rudd and, the Director of the Asia Society Centre on US-China Relations, Orville Schell to talk about climate change negotiations in Paris and the current state of US-China relations. Asia Society is very pleased to be organizing this event with World Affairs Council and we are especially grateful for the friendship and partnership with the Vice President of Programs for the World Affairs Council. Asia Society, as you probably know, is dedicated to providing mutual understanding strengthening relations between the peoples, leaders and institutions of Asia and the United States in a global context. It is thanks to you members that we are able to do what we do and we are delighted that you’re here with us. The World Affairs Council, and I have to read this, offers a neutral forum on critical international issues of opportunities and to learn more about the Council please visit their website at worldaffairs.org. At this time I’d ask you all to turn off your cell phones. We are recording this event for broadcast so it will actually have two openings and two closings. This is the soft opening. I’m actually going to give a somewhat more abbreviated hard opening for the radio broadcast. That will last a little over an hour. When that’s done I’ll close that and at that point we’ll go into a more informal conversation and there will be a roving mic and you’ll be able to ask questions of Mr Rudd and Mr Schell. With that in mind, I’m going to start the program in just a second and we will go forth. Welcome, my name is Bruce Pickering, Vice President for Global Programs for the Asia Society and the Executive Director of the Asia Society’s Northern California. I will be moderating today’s conversation about the recent climate change summit in Paris and the current state of climate change collaboration between the US and China, specifically. We are very pleased to be co-organizing today’s program in partnership with the World Affairs Council. It gives me great pleasure to welcome two very distinguished figures and leading thinkers on China and climate change who are joining us for today’s conversation. The Honourable Kevin Rudd is the inaugural President of the Asia Society Policy Institute which is a think and do tank dedicated to using second track diplomacy to assist governments and businesses in resolving policy changes within Asia and between Asia and the West. Mr Rudd previously served as Australia’s 26^th Prime Minister between 2007-2010 and in 2013, and as that country’s Foreign Minister from 2010-2012. Orville Schell is the Arthur Ross Director for the Centre on US-China Relations at the Asia Society in New York. He is a former professor and dean at the University of California at Berkeley and the graduate school of journalism, where I had the pleasure of working for him, and he is the author of fifteen books, ten of them about China and a contributing editor to numerous volumes. His most recent book is ‘Wealth and Power: China’s Long March to the 21^st Century’ which was co-authored by John Delury. Please join me in welcoming both Mr Rudd and Mr Schell. I’d like to start by almost asking a stage setter but what was the mood like in Paris when you were there? Did people feel like they were one the verge of creating something of real genuine long term value, or was there a sense of nervousness? What was it like atmospherically? KEVIN RUDD: Well thank you for the question, thank you for the welcome. It’s good to be back, I’ve been in San Francisco many times over the years. San Francisco is to the United States what I think Sydney is to Australia so it’s good to be here. Also, for us, I think in San Francisco and in Sydney and Pacific and China are daily living realities. They are not foreign policy abstractions so with those remarks it is good to be here and talk about a policy challenge which is real to every citizen on the planet, namely, climate change. For my sins I was Australian Prime Minister during the Copenhagen Conference, in fact, I was there in the room with the President of the United States, Angela Merkel and about 20 other heads of government as we tried to thrash out a Copenhagen Agreement. While it’s never been quite covered as such in the newspapers, the Copenhagen Accord that we reached did achieve breakthroughs on the temperature objectives which we had set for the international community and questions like measurement, reporting and verification, as well as the responsibility of all countries (whether they are developed or developing) to play a role. The difficulty in Copenhagen, apart from the fact that it was genuinely freezing (both outside the room and inside the room), was that when our agreed accord among the 20 or 25 larger economies and countries in the world was put to the conference floor they weren’t able to gavel it into becoming an international, as it were, legal document. That occurred twelve months later at a conference in Cancun in Mexico. So having been through all of that and knowing the dynamics of Copenhagen which was, one, massive global expectations for a binding global agreement, at the same time, a bunch of heads of government arriving from around the world who, frankly, did not have a prepared document for agreement. Therefore, what we achieved at Copenhagen was actually a drafting session of 20 or 25 heads of government around the world sitting around a table. As you may know from international diplomatic experience, that is unusual but we were able to achieve some progress. The virtue, however, five or six years on in Paris where I was also privileged to attend in a private capacity but accredited by the United Nations Secretariat to the Conference as a survivor with scar tissue from Copenhagen. The atmosphere, Bruce, was radically different. Our goods friends in Paris, the French – despite the atrocities committed on their streets only several weeks before with the terrorist attacks in Paris – had undertaken meticulous preparations over the previous twelve months, had made the consultation process with governments, groups of the United Nations as well as civil society as comprehensive as possible and by the time states arrived they were well briefed, well prepared. Secondly, the expectations within the conference room were such that the silent rejoinder around the room was ‘not another Copenhagen’. Therefore, there was almost an imperative not to fail in the eyes of the international community. Notwithstanding the substantive elements of success in what we achieved in Copenhagen as well. So I think the expectations were of a different nature. The cautionary tale from the past, five or six years beforehand was real in peoples’ minds. The preparation of documents was sound. But here’s the key factor: China’s policy on climate change had gone from here to there in the intervening five years, so if you want to understand the fundamental dynamic of why the Paris outcome was possible it is the nature of the domestic policy change which occurred within China in that period. PICKERING: We’ll talk more about that in a little bit. Orville, what was your take? SCHELL: To answer your question about the atmosphere. I think paradoxically, the terrorist attacks played into the success of Paris in a curiously salutary fashion. By the time everyone arrived there, the French had done a very good job. The woman, Laurence Tubiana, who had been the minister in charge of arranging it, had done an incredible job of not only dealing with all the foreign ministers and the Presidents but with subnations, with mayors, with governors, with NGOs. I think there was a tremendous sense of, as Kevin suggested, on one hand that we cannot afford to have a another Copenhagen – for all the virtues it did have, it had many vices as well – and that somehow it would be a tremendous disappointment for the French, for Paris, for this city under siege to leave without something of consequence. I think this really played into the general overall feeling that it was essential that people agreed. I think also this notion that Kevin mentioned that the big game changer for China, again is a paradox. Namely, the air pollution. I think this had caught the attention of the Chinese leadership in the intervening years, recognizing that they really did have an interest here. Of course, carbon emissions can ride in on the coat tails of cleaning up pollution that is caused largely by coal and by automobiles. You can do both things at once. There are many, many factors but those of are a couple of the ones that I think contributed to a pretty good atmosphere in Paris, a sense of goodwill, a sense that they really did need to buckle down and people had to just give a little in order to get a lot. RUDD: If I could just add a footnote to Orville’s comments. It was like the planet’s aligned in Paris in a way in which in Copenhagen it was like, for those of us trying to negotiate an agreement, trying to pull things that, frankly, were being magnetically pulled in reverse directions. To endorse Orville’s other point about the key personnel, Laurence Tubiana, from the French Government, Foreign Minister Laurent Fabius did an extraordinary job as well and Christiana Figueres who is the Secretary General of the United Nations Framework Convention on Climate Change based in Bonn. Those three people ran a process in which all people had confidence by the time the gavel came down. That is critical. SCHELL: One other interesting point, I think you would agree Kevin, is that the difference between Paris and Copenhagen was that Paris wasn’t striving to get a binding treaty-like agreement, it was going to be a voluntary agreement. And this actually I think was very gratifying for the Chinese delegation because that’s in effect what they were asking for initially anyway. So if the rest of the world finally came around to that perspective, which they did, what we have is largely an aspirational agreement but one which I think people felt they intended to stand up but not legally binding in the sense of a treaty with a big apparatus that would hold countries legally responsible. RUDD: We keep bouncing off each other but I need to add another footnote to that. The legally binding nature of what is now called the Paris Agreement has been the subject of a lot of discussion and certainly it was one of those things in Copenhagen which frightened the horses (that’s an Australian term, I don’t know if it is an American term but I think you get the picture). It was along these lines that when we get to Paris essentially the document breaks into two parts. There is the machinery of the Paris Agreement which establishes the objective in terms of keeping global average temperatures within 2 degrees Celsius by century’s end by pre-industrial standards – and, in fact, an aspiration to move towards a 1.5 centigrade threshold which is new. It also contains the machinery of reporting, measurement and verification. It contains within the machinery of bringing back the conference every three to five years to review whether the greenhouse gas emissions targets outlined by nation states actually add up to the mathematics of what is necessary to keep temperature increases within 1.5 to 2 degrees centigrade. It also provides a framework for financial and technical cooperation with developing countries. Now that is within the Paris Agreement which has its own legal status and remember it falls within the UNFCCC, a treaty negotiated by George Bush Snr, signed by George Bush Snr’s administration and ratified by George Bush Snr’s administration in 1992 at the time of Rio. This actually falls within a framework of a treaty which was signed, sealed and delivered by the then Republican administration. Separate to that is what Orville has just referred to and that is the independently determined national commitments, for which we Australians are to blame – we innovated this in Copenhagen, 2009 to get people to put down each nation states’ commitments for greenhouse gas emissions out to 2030. Prior to that people were reluctant to put anything on paper. While they are not in themselves legally binding, they constitute an attachment to the Paris Agreement, they constitute a basis for doing the mathematical calculations. Does it add up to the amount of GHG reductions necessary? Against a simple proposition in the end, that the planet doesn’t lie. The planet will tell you whether what we’ve talked about and what’s on paper is being translated into reality. PICKERING: Well the accord reached in Paris was, I think, uniformly hailed as a breakthrough in the press and the media. With nearly 200 nations including, I understand, OPEC signing on it does seem to be an achievement but for some of the reasons you have already mentioned, the Agreement is not without its detractors. Bloomberg View for example called it a ‘useful failure’. Their rationale was in fact that it is not binding, that it is just an agreement, that it doesn’t establish a framework for a global carbon tax or take any concrete steps to hold planetary warming to below 2 degrees Celsius. I get the impression, but I’d like you to talk a little more about it, that in fact you think it is, although aspirational, there is a degree of commitment now that was maybe lacking earlier? I’d like it if you could look at some of these targets and give us an idea of whether you think this is even remotely achievable, the ambitious aspirations that you and Orville have laid out? RUDD: The thing I’d say in response to the critic is let us never in international diplomacy allow the perfect to triumph over the good. There is such a thing as a perfect climate change agreement. I could write it for you in about half an hour. And then there is the world of international politics and different stages of economic development and, therefore, the challenge of international diplomacy is to realize a good agreement that which provides a legal framework for continued climate change action which is internationally monitorable (to invent a word), capable of being monitored. That’s, I think, pretty important to understand. The second thing is, where the Paris Agreement leaves it open for states is how they actually realize their aggregate greenhouse gas emissions cuts which they identify in the annexure to the agreement country by country. You can do it through a carbon tax, you can do it through a carbon price, you can do it through the blunt instrument of regulation which is what President Obama has had to do because of the attitude of the Congress, or you can go towards a range of other means as well. Ultimately, it is a question of how much carbon you burn on the supply side, and how much you’re consuming through inefficient or efficient energy consumption practices on the demand side. That discretion is available. To give you a practical example of how this stuff actually works, in our period in office in Australia what did we do? We legislated immediately for a mandatory renewable energy target of 20 per cent of total Australian energy supply by 2020 starting from a base of only 4 per cent. Australia is coal central. It is kind of like Virginia done continentally. Therefore, the renewable energy industry in Australia, despite an abundance of sun and all the rest of it, was frankly a fledging industry. But by legislating what we did was we gave industry ten years to adjust. By the time we left office in 2013, the data in 2014 says that renewable energy had gone from 4 per cent to 14 per cent of total energy supply. By the time we get to 2020, based on our current tracking, it will be 23.5 per cent of energy supply. Now the whole point of that is to create a viable renewable energy industry which then becomes a genuine alternative in the marketplace for people to consume their energy from. If you do that, you bring in other measures also on the supply side – government intervention, for example, to make solar panels affordable to people. When we came to office we had about, in the whole of Australia, about 10 000 homes only with solar panels. By the time we left office, because we provided a government subsidy to low income earners, we had 1.1 million homes with solar panels which represented about 15 per cent of the nation’s housing stock. Then we legislated a carbon price despite the fact that it got rejected by our own Conservative dominated Senate twice. And that came into force under the successive Conservative government who then repealed it. But here’s my point about what works: if you do things like that, guess what? It actually does bring greenhouse gas measures down in a scientifically measurable way. When we assumed office we were emitting about 600 million tonnes of carbon equivalent. By the time we left office that was down to 540 million tonnes. That’s what you can do, that’s what any nation state can do if you just put your mind to it. But the virtue of the framework of the Paris agreement is that it now sets a globally accepted global target, everyone’s national commitments are recorded and if the maths don’t add up – that is, if people don’t do what they say they are going to do or if the total reductions don’t add up to the amount necessary – then we have an ability every three to five years to come back and adjust the targets up. SCHELL: Remember that there was a point in our own country where aspired to agreeing to a treaty and it passed the House and it got rejected by the Senate. That was a critical moment in the global climate struggle because what it suggested was that we weren’t going to have a treaty, couldn’t have a treaty. So the US was going to have to go some other direction and it turned out that the only direction it could go was exactly the direction that the developing countries were asking for because they too felt very loathe to be bound by a legally binding treaty because they felt that the developed world had this massive historical responsibility for carbon already put in the atmosphere, they had a massive responsibility for the per capita amount of carbon that each American and each European and each Chinese and Indian had put in and it was way out of balance. In a curious way, the failure of the United States to be able to agree to a treaty, I think, through us into a world that was aspirational, where we had to sew together a very different kind of fabric to come to any sort of meaningful collaboration to tackle the climate change problem and that is what you saw working out in Paris. What it was was voluntary plans that the UN asked countries to submit and they did, voluntary commitments that would have a legally binding and universal process for judging them, measuring them and that was acceptable but a lot of this happened precisely because the US couldn’t go any other way because of our root bound, paralysed situation in Washington. That’s well worth noting when we look at the evolution of what happened. Whether this will succeed is very hard to say but I think the point to be made about Paris is that, yes, it was not a complete success, it wasn’t a complete solution to the problem, but it wasn’t a failure either. Had it been a failure I don’t think there would have been any real chance in the next decade that the world would have gotten together. It came together well enough and what that meant was that there was more to grow on here, hat in the next five years nations would find other way. Final point here that I think is worth making, what we saw in Paris was also people like Bill Gates, the civil society world, the philanthropic world coming together – we had 300 mayors meeting in the American Ambassador’s residence to also knit their piece of that fabric. We had governors coming together. We had all of these other players in society so it wasn’t simply a state to state proposition, which wasn’t going to fly in Washington anyway. PICKERING: To push a little harder, what though – given the aspirational nature and the non-binding nature – what is to prevent states from simply not living up to their agreements? RUDD: Well welcome to the wonderful world of international law. Short of sending in the troops, not a lot. But if you look at the dissuasive impact of international law over time and the norms and conventions which are created, it becomes harder and harder for nation states which prize their international reputation to simply stand outside these arrangements. China does not want to be seen internationally as the global pariah state when it comes to greenhouse gas emissions and on climate more generally. China’s concerns at least domestically have all been correctly pointed out before, as being the explosion of carbon pollution within its major cities, not just Beijing, and a deep-seated public reaction to the fact that the air isn’t safe to breathe on many days. China deciding that its global reputation was such under Xi Jinping that you can’t just stand out there and allow it to be trashed is one factor in why China has acted. Not all the factors, it’s one factor. Similarly with India, India has a much more complex situation than China. India is about 30 years behind China in the economic development curve and certainly in the industrial development curve. If you are Prime Minister Modi – have some sympathy for him because suddenly global consciousness and political consciousness has got to the stage where we can conclude a Paris Agreement. Modi’s India is about where China’s industrial development was circa 1980 and, therefore, its big carbon phase lies ahead of it. The critique he has domestically is, “Hang on, the Chinese have got across the development hurdle, the West got over the development hurdle a long time ago and we are going to be penalised by this.” But India at the same time does not want to be seen as a global pariah state when it comes to emissions. So is any of this perfect? No. But the key debate which, frankly, produced the most polarized discussions in Paris was on the teeth on the measurement, verification and reporting system – known in the industry as ‘MRV’ – and how intrusive it would be to actually capture the data, capture the actions, capture the actual emission levels still coming out of states. The second big controversial issue was the nature of the three to five year periodic review process, which brings the data together, establishes whether state A through Z has actually met their commitments or not and tell global leaders, “Look, we’re still five gigatonnes short of where we need to be to keep temperature increases in aggregate below 2 degree or 1.5 degree acceleration.” SCHELL: Kevin, I think it’s worth pointing out that it was precisely on these two points, that when push came to shove towards the end and it looked as if China might end up with India being somewhat obstructionist – China actually yielded. Xie Zhenhua the climate negotiator for China, we don’t know everything that happened, but it seems played a pretty important role at the last moment in kind of relenting and saying, “Listen, we need a deal.” I think you could say that was because China wanted to have a real leadership role and didn’t want to be the spoiler of this great effort and, as a result, at the last minute when everybody was really exhausted, they didn’t play that developing country card to the degree that they might have or did in previous years. It resulted in an agreement. Even, as I understand it, not just to aspire to keep temperature elevations at 2 degrees, but also to mention 1.5 as a better target which there was some resistance on because it is pretty ambitious. PICKERING: What does Prime Minister Modi or, for that matter, Dilma Rousseff in Brazil or the President of South Africa say to his people when it’s pointed out that the US and China were essentially able to pollute themselves to prosperity, but they’re going to have to make serious efforts to combat climate change while still trying to develop their economies? How do they go back on that? RUDD: This is the core question of these negotiations and has been from the get-go. Essentially, it comes down to a question of ethics and mathematics. Put those disciplines together and often it is a problematic relationship. Let’s start with the ethics. The ethics of climate change, as Orville has mentioned and you’ve just referred to, the pattern of pollution since the English Industrial Revolution has been such that it has grown to a large slice, which has been 95 per cent of what we’ve called the developed world or otherwise high income world – initially the Europeans, subsequently the United States and to some extent by Japan. They by the time we reach the ‘80s and ‘90s and Chinese industrial development we reach a point – only a few years back actually – where aggregate emissions from developing countries each year surpassed those of developed countries. Then there is another piece of mathematics which confronts us in terms of overall responsibility and ethical responsibility as well. Namely, that it won’t be too many years hence that the total accumulation of greenhouse gases in the atmosphere – given that these things don’t degrade rapidly, they stay there for a long long time – that the total aggregation of greenhouse gases will be predominantly from the developing world. Where do ethics lie in the midst of that? I don’t know, other than to simply own facts as they are. Historically, Western – bad. Currently, Western – bad but emerging country contribution as well to greenhouse gas emissions. Prospectively (because of where industrialization now lies) – primarily the developing world. This leaves the debate called the ‘global carbon budget’, given these different stages of economic development, given these different levels of responsibility for cumulative contributions of greenhouse gas emissions and prospective ones – how do you divide up what’s left of the global carbon budget if you are going to keep temperature increases within 2 degrees centigrade in a way that is fair in the world? Fairness, as we all know in the business of politics, lies in the eye of the beholder. Notions of justice are perhaps a little more quantifiable. But the best we can come up with is a system we have, which is where both developed and developing countries now have responsibilities to reduce. Prior to Copenhagen that was not accepted. The breakthrough at Copenhagen in the room was that that was accepted as a principle for the first time. Now it is translated into the mathematics of each country’s national commitments. SCHELL: One should say, not to be forgotten in this grand equation that Kevin is describing, what was a US$100 billion fund that got laid out in Copenhagen as the amount of money that the developed countries should make available to help developing countries meet this challenge. It was not ever – some of it came into being, but it was not in any sense totally ever subscribed to. So this came up again in Paris and it’s still a little bit unclear how the developed world is going to come up with this money so here into this breach rode people like Bill Gates. He’s not going to come up with US$100 billion dollars but he is capable of rounding up a substantial portion which meant that there was a different source flowing into this unrealised fund which was critical in equalling this balance that Kevin is talking about between historical burden and per capita burden on developed countries and developing countries. One interesting question in all of this, in this ying and yang world or developing and developed, where is China? Is China is a superpower? Is China developed? It says no, not really. Are they a developing still? No, not really. Here I think actually we saw some interesting flexibility in Paris that China was sort of morphing from one side to the other and saying, “Okay, we’re kind of on both sides of this divide. Maybe we’ll contribute some money to this fund but don’t be too pushy, don’t expect too much from us – we have a lot of poor people still.” There’s some interesting things at play here which I think ultimately will have to be teased out in the years to come. PICKERING: That’s actually an interesting line, we all know that the United States and China together produce over a third of the greenhouse gasses that being absorbed, or not absorbed, by the planet at the moment. Rightly, I think much of the attention has been placed on the United States and China. You’ve talked a bit about the overall Copenhagen transitionary approach but this might be an interesting time to have a conversation or a short discussion about the trajectory that has brought us here. Because you’ve come from a binding to a non-binding agreement that is aspiration, you’ve gone from the deep divide between the developed and the developing world but I think internally there are some interesting issues we should probably tease out a little bit, both within the United States and its (I think the US Senate is the only legislative body on the planet that doesn’t really accept the fact that climate change is a major problem for the world) – RUDD: It’s got close relatives in the Australian Senate. PICKERING: Oh. But I think when you look at China, its transformation has also been rather remarkable. What’s interesting is when you’ve moved away from binding away from binding agreements with really solid deliverables to a less binding, aspirational effort people seem to see its potential for success as much greater. So I think just a brief overview, I’d like to ask you both about comparing the United States and China, how have we gotten to this point when ten or twelve years ago it was unthinkable? RUDD: I think the international relations scholars and the moral philosophers would describe it as mutually enlightened self-interest, if you want a quick rejoinder to your question. United States can’t walk away from the size of its industrial footprint or its greenhouse gas footprint both now and into the future – it’s big. I hate to tell you guys but you’re not the world’s most efficient consumers of energy. But as a consequence, the United States is a huge and continuing factor. The Obama Administration, Orville just reflected before, early in its term – I think we’re talking about 2009 – sought to legislate but it didn’t pass the Senate, which I think was a genuine tragedy. As a consequence, President Obama has had to resort to a series of regulatory decisions through use of executive powers which was the subject of huge political controversy in this country. I would simply say he had no alternative if America was going to act on this question. As for China, the core reason for the change against enlightened self-interest was the absolute reaction from the Chinese public to the last several years of air pollution data. We should give thanks to the United States Embassy in Beijing for having the courage to put the monitor on its roof and to leave it on its roof despite massive political objections over a long period of time – mind you, the Chinese public were always tuning in to the American Embassy site to see if it was safe to go out. Then the Chinese government, thankfully, with a new Minister for Environmental Protection, Chen Jining who was previously the President of Tsinghua University. Now this is all accepted publically and there is a high degree of expectation in the Chinese public that they’ll be upfront about these numbers. You’ve seen the data in the last few weeks. I go to Beijing eight or nine times a year, it’s on those days which can last for many days, it is just horrendous. What has actually brought these two massive emitters together is, I think, the American recognition that you can’t just walk away from this problem despite the problems with the US Senate. And secondly, Chinese self-interest at home because of carbon pollution and air pollution within cities – having a huge impact on mortality, by the way – and then in addition that, China’s reputation in the international stakes. There is a third factor, in the overall architecture of US-China relations, which Orville follows and which I follow with degrees of forensic intensity which would make most people bored, this has been one of the most productive areas where both sides have recognized that the common interests are such that, frankly, they should leave the weapons outside the door, go inside and come up with something that is workable for both sides. Xie Zhenhua, just mentioned by Orville, probably deserves the Order of Lenin or something like that, good guy within the Chinese system – I hope I don’t destroy his career for having said that – but a person who has tried to push the process forward. He and Todd Stern, the Chief Negotiator, for example, have worked very tightly, concerted through a number of US-China summits going back to the one that was in Beijing a little more than twelve months ago and then followed up of course in Washington in September. It’s an amalgamation of the above. SCHELL: I think if you follow this thing, Kevin and I are sort of like beat detectives watching this. Ten years ago we started to write a road map for the Obama Administration for how this topic could serve as a primary locus of a common interest, just as Kevin described. We are not going to find common interests in the South China Sea, the East China Sea, Tibet, human rights, probably in trade – a thousand things where we’re going to disagree. If you believe, which I think Kevin and I profoundly do, that the US and China must find ways to cooperate – absolutely must, it doesn’t matter what the topic but the preeminent topic is climate change. Happily, paradoxically, cryptically climate change – the great challenge of this century, the most bedevilling problem that I think mankind has ever confronted because it is eternal – we have a common interest here. We’re just slowly now beginning to unbury it and uncover it and see it. It started at the APEC summit a year ago in Beijing when Obama and Xi Jinping met, it continued at the summit in Washington a couple of months ago and then Paris was the third great dot on the chart where the lines begin to connect. I think, strangely – I hope – climate change may end up being the great saviour of the US-China relationship if we can see this more clearly and I have to say if you go to Washington you certainly lose hope rapidly that the scales are going to fall from our eyes in America any time soon. This is one of the great things that President Obama should receive praise and support, he has seen this. Xi Jinping – for all the problems and places where we disagree with him nation to nation, state to state – I think he sees this too. I hope that we can elaborate this in the months and years to come to it’ll serve as not only a stabilizing principle in our relationship but will solve the climate change question. Because folks listen, there is one thing you need to remember, the climate change problem will not be solved unless the US and China get together. No way. Doesn’t matter what the Europeans do, Japanese, even – God bless you – the Australians. What matters is the US and China. RUDD: Thank you for reminding me of my global status! SCHELL: I believe you have the population of about Taiwan, is that correct Prime Minister? RUDD: We have no illusions about that my friend. Mind you it is interesting to know how many people want to go and live there. The point I was going to make with developed countries like us, it is could interesting in the dynamics of climate change. When I was elected, I was elected on a platform of committing to the Australian people of ratifying Kyoto as my first act, which I did, and then introducing those measures I described before, which we did. Until that time there were two standouts from all global negotiations – the Australian government, under my predecessor the conservative Prime Minister John Howard, and George Bush Jnr. Everyone else was in the negotiating room, those two governments were not. What happened, and I remember it clearly because I was focussed on winning an election at the time in 2007, is going to Bali and handing the United Nations Secretary General a ratification for the Kyoto Protocol and walking out into the room where everyone was kind of excited that I’d done that. I had a view of the world like yours, my friend – like, we’re 1.5 per cent of global emissions, who gives a damn other than the Australian people? Frankly, if you have any nation state – we’re probably the twelfth largest economy in the world – who just stands outside the system and says, “Sorry, not for us.” Then you create moral license for much bigger contributors, namely the United States, to do the same. That’s the reason our modest actions in the Antipodes may have had some modest consequence. But more broadly, given the dilemmas that President Obama has faced with a Senate that still to this day has refused to ratify the United Nations Convention on the Law of the Sea, the Comprehensive Test Ban Treaty and already rejected the domestic carbon legislation of 2009. That’s kind of the reality of American politics, I get it, so this President has had to work and I think work effectively by other means. He deserves credit for that. PICKERING: This is an interesting segue into another question, which is the agreement in Paris obviously affects globally but I think one of the interesting issues and Orville in particular here in California has been involved in a number of initiatives with Governor Brown that are really subnational efforts to address the issue of climate change. One interesting thing – California has always seen itself I think as a global leader not just a national leader in particular in environmental and sustainable issues – one interesting thing about the state is California has had rather a continuing economic increase and its local GDP has grown even when its energy production has remained essentially flatlined. The lights are still working, we don’t have brown outs or black outs, so the state has done very well by adopting a set of regulatory policies which have effectively enabled it to grow its economy while at the same time keeping its carbon footprint relatively low. I’m wondering if other states could follow that lead? I think within the United States there is a sense that states that don’t do this have a certain advantage, but I think California’s experience has proven that we do. Are there other issues at the subnational level, other areas at the subnational level, that can really have a local impact, a national impact or even a global impact? RUDD: I would say around the world the answer is a resounding yes. First of all, however, we should not in any way allow national governments off the hook if they provide the regulatory or price mechanism with which the ultimately decisions, usually on coal-fired power stations, are made but other dimensions of national energy policy as well. That has to remain the core. But the other players, frankly, are significant. Subnational governments, as we’ve described them across the world, and civil society have a critical role to play but subnational governments particularly, whether it is state governments or municipal governments. We’ve watched in Australia for a long time what goes on here in California, as I said there is a bit more of a sense of what happens on the US West Coast than over on the East Coast looking at it from the perspective of down under. Certainly, the actions and initiatives of the Governor have been well-noted and well-reported and appreciated around the world. To parallel your story about California in action on climate change, not producing the zero-sum game of a decline in economic activities, our national experience in Australia is identical. All those measures that we adopted which I mentioned before, which brought down greenhouse gas emissions from 600 million tonnes of carbon equivalent to 540. This is a period in which our economy continued to grow and this was despite us doing this in the midst of the Global Financial Crisis by the way, if you want a degree of difficulty to add to things. You’ve got the whole global economy falling in on itself at the same time as we’re legislating for carbon. It’s like walking and chewing gum not at the same time but standing on your head as well. Our economy, throughout this period, has grown and grown and grown. We’re now into our 24^th year of consecutive economic growth. Through our period of office – despite the Global Financial Crisis, despite the price in carbon, despite mandating renewable energy going up to where it has gone to – it continued to grow. The core message of all of that, the states across the United States and for the United States federal government with whoever wins the next general election (maybe not in the case of certain candidates but we’ll leave all of that to one side – I live in New York so I follow this more closely than I have before) is the bottom-line is that the core binary which the climate change lobby has established in peoples’ minds for decades – that if you act on climate change, if you reduce carbon, if you reduce greenhouse gas emissions, if you boost renewables then you will destroy industries, you will destroy jobs and you will destroy the living standards of working families. That is hogwash. There are more acute terms in the Australian vocabulary to describe it but given that this is a family occasion I won’t use those terms. But it is hogwash. Removing that as a binary in the discussion is, frankly, a core element of removing the constituencies concerns that are reflected by various Congressmen and Senators. The reverse narrative is true. One of the huge drivers of global economic activity comes out of the technology explosion, the renewable energies explosion, that occurs as a consequence of things like putting a price on carbon, things like regulating how much more carbon can be produced et cetera, and producing new unforeseen economic opportunities. The reverse view is I think a 21st century ludditism and I think it is time we got beyond that. SCHELL: When people have heart attacks doctors have discovered that one thing that one thing that happens – stay with me on this – you develop a kind of compensatory circulation to go around the occluded artery. By that analogy, I’d say Washington has had a heart attack. The requirement for us, for this great nation of ours, to actually act in an effective comprehensive way means that you have to develop these compensatory mechanisms to take up some of the slack. Kevin is absolutely right, if the federal or national government remains completely inactive you really won’t be able to make much progress. But if they can make some progress and you have then these other entities such as states and cities also acting, then you develop a much more broadly based strategy for dealing with something like carbon emissions and here I think the state of California has been truly exemplary. I remember when Governor Brown was Governor the first time around, he had all of these insipient ideas about ‘small is beautiful’ and ‘go lightly on the earth’ and ‘don’t use so many things’. And he was considered a bit – well he was called ‘Governor Moonbeam’. Turns out he was ahead of his time. Now is California’s time to be a leader and, as he said, actually act like a country which isn’t a bad idea if your country isn’t acting like a country to try to take some leadership here. California does have some extremely forward policies when it comes to energy use, climate change and many other things. They have – as many of you know, there’s a book out in the lobby you can look at which we have published on this – they’ve established a lot of very creative and interesting partnerships with China. And they can do that because they don’t have to drag with them the South China Sea and all of these other incredibly intractable issues which a national state brings with them to every negotiation. This is just a simple little commercial for the constructive and very positive role that these subnationals can play in this global dilemma and also in our relationship with China. RUDD: Apart Orville encouraging me to go and see my cardiologist again, it gives rise to two quick thoughts. One is, at the subnational level, even at the municipal level, the extraordinary incentives which governments can give for research and development cannot be underestimated. I understand in this city you have a small suburb called Palo Alto or something like that? It’s a small rural area. I don’t know what they do out there but it earns a lot of people a lot of money. The point I’m making is here in this great state of California you are the global epicentre of research and development run out of the private sector and in many respects you have the capacity to deliver the global solutions to some of the technology impasses at the moment, for example long term storage of solar energy. Once you crack that, that’s the Apollo Shot, frankly, and so many of our problems actually become a lot more manageable. The support given by governments to that sort of activity at the subnational level is critical, even at a state government or municipal level a modest subsidy for people to whack solar panels on their roof, I’ve told you what we were able to do just in four or five years. If here in sun-rich California – I don’t know what the levels of solar panels are in terms of coverage – but across the United States, simple measures like that to make it affordable for working families who do not have a high level of disposable income to make the upfront installation cost because the downstream benefit to them in terms of lower electricity prices is self-evident. What they can’t actually afford is the upfront capital cost of actually sticking it on your roof in the first place. PICKERING: We’ve touched a little bit upon this but I want to dig a little deeper now. In terms of climate finance, there’s been much money needed for climate change I guess is going to come from private investors. The $100 billion for example is one area where it is clear that there’s no financial commitment yet at least for the United States or China but a number of entrepreneurs such as Bill Gates and Mark Zuckerberg launched the breakthrough energy coalition to invest in zero carbon energy technology around the world and they’ve been joined by Richard Branson and even Jack Ma. So I think one question is (A) how effective are these non-governmental approaches to climate change, are these the templates for activity when governments themselves have frequently been inactive? And is there a way other such organizations and groups can be encouraged? SCHELL: I think, Bruce, don’t forget that the guys don’t only have the ability to mobilize capital but when you have something like Paris that works out in its way it is a signal to markets about where to invest. And that doesn’t take anyone giving contributions or giving money, what it means is that all sorts of financial institutions are going to redirect how they invest their capital. I think we will see some of that as a result of what happened in Paris. Coal – if you had some mutual hedge fund, you’re probably not going to move into coal because it’s actuary list looks a little shorter. You’ll probably move into clean energy or something like that. This is a profound psychological signal that needs to be given to markets and we’ve not done that to date and that’s one thing I think Paris has started to do. RUDD: If I have a word of encouragement for everyone involved in global action on climate change it is this, to make the profound difference and save the planet for the next generation and the one that follows requires a global coalition of extraordinary dimensions. What you saw was one part of that coalition at work in Paris. Necessary national government action and regulatory frameworks lie at the core. But the other elements of that coalition – the subnational and municipal governments that we’ve just talked about, the corporate sector in research and development but also, frankly, their own self-innovating carbon markets and rolling commitments by corporates across the world to become carbon neutral. It was my privilege to attend one such meeting in Paris held at the British Embassy, brining together the eight global business coalitions for climate action. There are eight of them out there led by some of the folks from Silicon Valley, led by people like Paul Polman from Unilever, led by some of the other global large companies – people who can see the writing on the wall but who are driven by social conscience and not just PR benefits for their firms. These guys and women leaders are acting in a decisive way which in many respects has left regulatory frameworks behind but that need to be acting in a way that is still answerable to their shareholders, but their shareholders are in turn as responsive to public opinion and to regulatory frameworks of the type we’ve described. The last part of the coalition is every person sitting in this room. It’s the basics of when you turn your lights off, do you have smart meters in your home, have you stuck solar panels on your roof? That all makes a difference as well. It’s only through that sort of grand coalition that we can not only bend the arc of history but bend the arc of the planet. PICKERIN: I think one interesting question to me, The Economist has done several looks at the clean energy industry to see how financially viable it is and one of the things they have determined is that actually clean energy is approaching that point where it will actually viable. One of the things that is clearly undercutting it though is in the United States we don’t call them subsidies, we call them tax incentives to coal, oil and gas. I guess one question I have on this is if you have these subsidiaries, the concern was that there were high profile disasters like Solyndra not far from here where an enormous amount of money was spent on essentially a failed energy enterprise, but in the long term I would assume that if The Economist is right and these new industries are becoming more financially viable they may be able to take on pre-existing industries like coal, oil and gas a little more effectively. Is there an appetite for underwriting coal? Bruce McConnell wrote a proactive editorial in the New York Times a couple of weeks ago saying that there is still place for coal and Obama better not come back with a binding agreement from Paris. But I think the question is how much longer this state of affairs can continue before we hit that tipping point and people really start to see clean energy and renewable energy as the future? You’re hinting that Paris may well have been that. RUDD: It’s a sliding scale here. Coal, as we know, is the worst offender. Then within coal there are grades of coal some of which are greater offenders than others. Then you have the various research efforts underway worldwide on the four different types of carbon capture and storage which are still being trialled around the world but not a single project at, what I’d describe as, scale. That is, a station of 100, 300, 500 megawatts which would make a difference. As Prime Minister I established the Global Carbon Capture and Storage Institute to do serious funded research in this domain. But it still remains elusive and some of its by products remain unknown. Then elsewhere within carbon, frankly, the second next worst offender is oil and then the third worst offender is gas. And frankly, if you’ve got a natural gas alternative versus coal alternative – go gas. That’s why the shale gas revolution in the United States is important in terms of long term changes to the energy mix. If you look at China’s energy mix and it is China’s forward energy plans for the next fifteen years. What they are doing in fact is – and I stand to be corrected on the absolute numbers here – but in terms of the total energy mix here at the moment you’re still looking at about 60 per cent coal. Over the next fifteen years they are seeking to bring that below 50. They are seeking to actually fill the gap with their domestic use of oil, which actually creates geopolitical questions in China given they are not oil rich and a lot of that is imported from the Gulf and that brings into account their concerns about the South China Sea et cetera. Then to gas and gas also needs to be largely imported from countries like Australia the Gulf. I think we are now China’s largest supplier of LNG or about to become their largest supplier of LNG. Then you go into renewables on the supply side which are becoming increasingly cost competitive in the absence of any subsidy. And then on the demand side of the equation, all of the incentives that can be created for greater energy efficiency of use, or less use per unit of production by firms or by households. It is a mix of these things but if we’re looking at the next fifteen you are going to see the China coal curve come down a bit, but we’re going to see the India coal curve go up. As Hank Paulsen, I wrote a piece in the Guardian Newspaper about with him, with Hank from the Republican side who is a strong activist on climate change and we thought it would be useful to pen a piece together on this stuff. There were three countries that will make the difference for the future – you guys here in the United States of America, Peoples’ Republic of China and India. Put those three together and if you can actually resolve the problem, the rest of the planet will thank you for eternity – and the reverse, they will damn you for eternity if you don’t. The India coal problem, against that spectrum, and the continuing base of Chinese coal consumption will have to be at the absolute focus of the technology innovation and technology substitution equation, quickly going to less intensive carbon if we are going to bend the arc. SCHELL: I think the point here is that all the clean energy in our lifetimes is not going to get rid of coal particularly in India and India has a lot of dirty coal. So we need to come up with some technologies to deal with coal. Carbon capture and sequestration, you may know something about it, you take coal out of the ground and you put it up in the air in effect. Carbon capture and sequestration tries to scrub out the carbon out of gasses, capture it, compress it and pump it back underground where it belongs, where it was as coal and inert. But it is expensive and so the problem is that you put the technologies that these we have on these coal fired power plants and people want to turn them off because they cost too much. But there are ways around that, there’s a thing called – and I won’t get into the details – ‘enhanced oil recovery’ where you use the carbon to pump oil out of old residual oil wells. So there are clever ways but we just haven’t scaled this technology up at all. But I think, given the fact that coal will be with us and we are building new coal plants everyday around the world, it would behove us to get on this and do it quickly and what better project for the US and China to collaborate on than one like this. RUDD: And a third country, Australia. Despite our relative insignificance to the world but as the world’s second largest coal exporter. SCHELL: You yourself established the policy so it is a good interface. PICKERING: With that I’d like to thank you both for your wonderfully insightful comments and on behalf of the Asia Society and the World Affairs Council, I’d like you all to join me in thanking the Honourable Kevin Rudd and Orville Schell for their remarks. So now we’ll move into the more informal part of the discussion and we have a couple of roving mics and you’re invited to ask questions. It looks like we have somebody right here. AUDIENCE MEMBER: (INAUDIBLE) RUDD: Well Bill your question is right on the money, as I ran into this problem precisely when as Prime Minister I established this Global Carbon Capture and Storage Institute because there is a whole bunch of research underway around the world, usually by the global energy majors, all of whom are understandably perhaps protective of what they are doing. How do you mesh that against the global public good of making sure you accelerate the global research project? There is not an easy fix for that, my friend, as anyone who works in area of IP law knows. That also applies in the area of renewable energy technology innovation as well. But having done all of that I think the public policy response will simply need to be to make it as advantageous as possible financially for firms to innovate in this area. I’m a pro-market guy and always have been although recognizing market failures. Climate change represents a massive global market failure. Why? Because it is a market that doesn’t effectively work because those who are using coal do not actually experience the price consequences of the long term environmental impact of what they are doing. Therefore, there is a unique role for government to intervene. But in the murky area of intellectual property law that is where the rubber really hits the road and I’d be lying to you if I suggested I had a quick fix for that. I don’t. Where I do believe governments have domain responsibility is in providing maximal incentives to firms to actually do that. AUDIENCE MEMBER: (INAUDIBLE) RUDD: Very simply it is a question of supply and demand and what global markets say. Why I’ve been a long and strong supporter of not just national but global carbon pricing is that you create the incentives necessary for those who use coal to use less of it and ultimately use none of it. That’s a process of transition, once a price has been set in. The correlative argument for example is if the Australians stopped exporting coal tomorrow, others would simply fill the gap immediately until the price signals or the regulatory signals within countries which use it are changed. I think leads in one direction – my argument is we need a global carbon price. The problems is a global one. Many firms will argue that if I have a carbon price in Australia – and I had to deal with this debate for two years in my country – then why the hell should we pay the price for that when so many of our competitors around the world don’t have a carbon price? In other words, it creates a problem in terms of corporate competitiveness. So we were able to negotiate our way around those arguments because of the, frankly, relatively small impact on bottom-lines by putting prices on carbon. It’s more of a fear campaign than it is a reality. But here is a suggestion for my friends in China, China has announced that is about to have a domestic carbon price and a domestic carbon market as of 2017. Good thing, I support it and I’ve spoken to Xie Zhenhua and others about it recently in Beijing. But here is an idea – given the industrial significance of North East Asia period and the fact that the Koreans have just brought in their first carbon price but the Japanese in fact remain at this stage opposed – let’s begin a policy dialogue on how we can create a North East carbon market across those three countries. We already know that the impact of Chinese coal emissions affects the concentration of carbon pollution in downtown Seoul and downtown Tokyo already. There is a natural synergy in so doing, but if you establish at least a regional carbon market. Then over time establish a North American carbon market which links what Justin Trudeau (who I think is a great addition to the global stage on this question) is going to do on carbon pricing in Canada given that the structure of the Canadian economy is very similar to the Australian one. You have here in California its own carbon market, if you’re able to link that with what the Mexicans are now proposing themselves you begin to put together the building blocks of a North American carbon market over time, absent action by the regulators in Washington but by participating subnational governments. Add that to the European carbon price and a market which has not been working effectively I think partly because it has been decoupled from global carbon markets. You start to then have the major building blocks towards a global carbon price. If you have a global carbon price, let me tell you, the future demand for coal will start going down at a much more accelerated rate. SCHELL: I think that is exactly right. I think that the problem with carbon markets if they are just in isolation is that they can’t survive. They need to be linked up. It’s that old heart attack metaphor again, if the nation states can’t do it you can sort of – almost like Maoist guerrilla tactics – you encircle the city form the countryside. That seems to be – RUDD: I am now ideologically terrified. SCHELL: I think that’s probably the best hope in the next few years in this country to have some effective strategy. RUDD: Bombard the headquarters? SCHELL: I won’t go that far. AUDIENCE MEMBER: Thank you both this has been fascinating. My name is Pablo and I used to be at the US Embassy right around the time we installed that monitor. RUDD: Well done mate! Did you physically put it on the roof? AUDIENCE MEMBER: That was me, yeah (LAUGHTER). I didn’t install it. I now work for a software company in San Francisco. I actually think Australia plays a really pivotal and important role in this relationship, the US-China relationship. Australia pulls in both directions. The question is this, what do you expect the US-Australia relationship to be like especially given movements in the administration recently on the Australian side?RUDD: Are you talking about climate or more broadly? AUDIENCE MEMBER: More broadly. RUDD: Okay, we’ve just left climate and we’re heading on to geopolitics. I think in Australia, both in the period I was in office and to some extent under my predecessor as well, for a long time we have – in foreign policy and security policy and international economic policy – learned the deep principles of walking and chewing gum at the same time. We’ve never seen the US and China relationships as mutually exclusive. We didn’t then and we don’t now and I doubt we will in the future. The Chinese know full well the history and the origins of Australia’s security policy engagement with the United States. It goes back to 1941 and, frankly, the fundamentals of that haven’t really changed. As I’ve said to many of my friends in Beijing over the years, if you were faced with the historical circumstances that we were in ’41 and ’42 with the Japanese invasion across East Asia, down to Papua New Guinea and beginning with the bombing of Australia’s northern cities and the United States entered the war with you, it actually leaves an indelible mark on a country’s consciousness. It is the case with Australia, even the young generation of Australians. At the same time, Australia at least since the mid-70s under one of my Labour Prime Minister predecessors, Gough Whitlam, began a policy of Asian engagement of which China was a large part. That’s continued. That has all the challenges and complexities of a Western country being in the midst of all the security and policy deliberations of South East Asia. But we’ve kind of managed over a long period of time and I think we’ll manage it into the future. The relationship with Beijing is good and I think we can in an intelligent way, perhaps, help identify ways through the big questions of US-China relations. At our best, and we Australians are not always at our best (particularly if we’ve had a drink or two), but at our best we are sort of the West and the East, the East and the West. For us East Asia is not an optional area of foreign policy seminar land, it is reality and it is at the doorstep. We are dealing with our friends in Jakarta everyday about everything. This is just daily living for us – it’s daily economic life, it’s daily social life, it’s daily political foreign policy and security policy life. I think there is a role for us to think through, in as dispassionate a way as possible, mindful of traditions of both countries, ways to carve a future for the US-China relationship as well. Ultimately the decisions are for Beijing and Washington but I don’t think all wisdom necessarily lies in both capitals. Remember that the rest of us in the neighbourhood are directly affected by this deliberation, so much as Beijing and Washington may think this is a uniquely bilateral exchange, its future dynamics affects all of us in the region and beyond. AUDIENCE MEMBER: You both highlighted this rapid transition from Copenhagen to Paris in China’s approach. Looking forward, clearly one of China’s key contributions is going to be continuing to do what it has committed to do and implementing policies it already has in place to clean up its act domestically. I’m curious about what you have seen in that transition that tells us something about China’s future global leadership role in this entire process? SCHELL: Well that’s a really interesting question and I think that China is really evolving in terms of how it views itself and its role in the world. It wasn’t so many years ago it was called upon to be a constructive stakeholder. I think there is a certain reluctance to step up just as it’s a little bit reluctant to move into that developed country category from the developing country category. I think it is wanting to go step-by-step in fully fledging its role as a global superpower. That said, everywhere you look it is moving. It’s developing a maritime force in Asia and the South China Sea, its One Belt One Road stretching tentacles all the way through the Straits of Malacca, all the way through Central Asia. So it is happening in an evolutionary sense but I think we have to be aware that its conception of the role its ultimately going to play in the world may not be exactly our conception. We may view it as constructive or unconstructive but there is going to be a lot of jockeying and a lot of adjustment I think as China continues to rise, unless it has some sort of fatal hitting the wall somehow which is perfectly possible since every economy goes through major adjustments. Whether China would be able to sustain a major readjustment is a good question. I think that we don’t quite know how fast that process will go forward, the complete nature of it and, whatever it is, it’s going to take some adjustment because we are used to sitting on top of the global hill which was a hill that we built after the Second World War. We too are – there is a learning curve here. RUDD: There’s a great speech delivered by Xi Jinping at the end of last year to the Central Party Work Conference on foreign policy. It is worthwhile getting a hold of. If you want the political wellspring for what you know see in China’s global political activism, I think it is that conference. I remember speaking to people after they had come out of it – Chinese foreign policy actors in the world – it was clear to them that China was now expected to have a much more forward leaning activist foreign policy in multiple spheres. Within that, the Chinese obviously view their region and the world in a series of concentric circles: security issues closer to home, the questions of Taiwan, the internal questions of Tibet and Xinjiang are core; then you have China’s understanding of its interests in the East China Sea and the South China Sea and let’s call them the neighbouring states; then have China’s wider set of security and policy concerns in the rest of East Asia; then you have China’s framework of engagement in global multilateralism, that’s through the UN system, the Bretton Woods institutions and the rest. That’s where I find it quite fascinating at present to see what is unfolding. Xi Jinping’s speech at the General Assembly this year, in September, the fact that China has allocated an 8000 strong force from the PLA to be a ready deployment force for the UN on peacekeeping missions around the world. The fact that there is already a Chinese battalion at work in Southern Sudan, wearing blue helmets for the UN system, the fact that the Chinese have now indicated for the first time that they will start making contributions to UN humanitarian agencies. I think the decision is, within the framework of those multilateral institutions, you are going to see a much more activist China. I think it’s not going to be the old China we know of (CHINESE) – which is ‘hide your strength, bide your time, never take the lead’. In fact, I think that has been junked. But I don’t think yet there is a grand narrative in Beijing as to how this is going to unfold. To the extent that there is one, I think those two speeches both in September this year and November last year are fundamentally important. AUDIENCE MEMBER: I’d like to bring you back to COP21 as the last questions and if you could speak to the issue of transparency. What are the advantages and what are the points of leverage to ensure (INAUDIBLE)? SCHELL: Transparency of course, is two hands clapping. Every side as to be transparent. I think this is a major challenge for China. It has not had a system that has really emphasized transparency, although there are certain tendencies that are developing now in that direction to make public documents available, to make things more open and evident. I think that one of the problems in China’s efforts to be more transparent is the data collection. There are many views on that, from completely unreliable to reliable, and if you think it is unreliable then how do you and how do you judge it? This is one of those areas where, as China does evolve and develop and emerge into the world, we are going to see a corollary development within the whole question of transparency and this is a challenge because the Chinese Communist Party, I think it is fair to say, this isn’t an instinct that comes naturally to them. It doesn’t come naturally to any government, but a Leninist party has more of a challenge than an open society. RUDD: The big driver for this will be domestic. The analogy we had before about pollution monitoring on the roof of the Embassy in Beijing, writ large. Now Chinese citizens are very active and not just in Beijing but elsewhere on what is happening to the air that I breathe and what is happening to my local environment. The Chinese Communist Party has in its own sense of continuing legitimacy a view that unless it is responsive to these baseline, deeply felt concerns of the people – as for example Xi Jinping has done in response to corruption – but similarly with environmental despoliation. Unless this is being accurately reported and dealt with then it creates a long term legitimacy problem. I think the domestic drivers here for greater transparency over time are significant and as China does that and becomes more globally active for example in the next iteration of the UN Framework Convention on Climate Change, China will not wished to be critiqued as having produced unreliable data. Final point, if you go to the text of the Paris Agreement itself and the section on MRV – measurement, reporting and verification – like most things in life it is a compromise between levels of external intrusion and national sovereignty. That’s life, that’s international law, that’s international politics. The task for those given responsibility under the Paris Agreement to implement it, will be to make all that work on the ground and that is going to be one of the core continuing task for the body which this agreement has created. PICKERING: On behalf of the Asia Society and the World Affairs Council I’d like to thank Kevin Rudd and Orville Schell for their great remarks, and join me in giving them a hand.