Why America and China must cooperate on clean transportation

We — and our planet — are running out of time. In order to avoid the most catastrophic impacts of climate change, the Intergovernmental Panel on Climate Change warns that the world must rapidly transform our global energy system, and the way we move people and goods, at an unprecedented scale and pace. This task requires us to decarbonize transportation, the fastest-growing source of greenhouse gas emissions, which today relies overwhelmingly on highly polluting petroleum-based fuels. We are already at the cusp of a profound shift to cleaner, more efficient, and more creative forms of mobility. But we must do everything possible now to accelerate that transformation, in ways that will also clear the air, create good-paying jobs, and protect historically marginalized and vulnerable communities.

In a time of rising U.S.-China tensions, it might seem implausible or even unwise to call upon the two countries to work together to tackle this joint challenge. But both sides have much to gain by cooperation.

The United States and China are essential to this effort. California and other U.S. states are moving forward with innovative clean transportation measures, despite the Trump administration’s efforts to roll back policies that curb the largest source of U.S. greenhouse gas emissions. China, the biggest global automobile market, is home to nearly half the world’s electric cars, as well as virtually all of its electric buses and two-wheelers. Both countries are working to develop low- or zero-carbon alternatives for diesel trucks, shipping, and aviation. Yet much more needs to be done, and at a much faster pace. Meanwhile, both countries face many of the same barriers in terms of cost, infrastructure, technological development, and consumer adoption.

In a time of rising U.S.-China tensions, it might seem implausible or even unwise to call upon the two countries to work together to tackle this joint challenge. But both sides have much to gain by cooperation. Sharing experiences and lessons learned could accelerate the development and effective implementation of innovative domestic measures. Coordinating policies and targets on clean transportation would send a strong signal to global investors and manufacturers. Collaboration, even at the subnational level, would not only accelerate the global fight against climate change but also improve each nation’s energy security, economy, health, and environment.

Two months ago, for example, a bipartisan group of governors representing 15 U.S. states and the District of Columbia signed a Memorandum of Understanding committing to zero-out toxic air pollution from new medium- and heavy-duty truck and bus sales by 2050. The announcement represents the largest-ever multi-state collaboration to clean up transportation pollution. The memorandum calls for 30 percent of new truck and bus sales to be zero-emission by 2030 and 100 percent to achieve zero-emission by 2050.

To meet these targets, the memorandum identifies key policies for states to consider, including California’s Advanced Clean Truck Rule. Yet China’s experiences could also prove beneficial. Nearly 20 percent of China’s total bus fleet is already electrified, and up to 30 percent of new urban bus sales are electric. More than 30 Chinese cities (including Guangzhou, the third-largest city in China, with a population exceeding 13 million), have announced plans to completely electrify their taxi and bus fleets by 2022. China has achieved this result primarily by providing national mandates and manufacturing subsidies and encouraging policy competition among cities. The United States can take advantage of the lessons learned from China’s early adoption of electric buses, without going through the same costly process itself.

For instance, a number of Chinese cities initially did not conduct sufficient fleet-wide planning, which is necessary to determine the appropriate vehicle and battery technology, optimal charging infrastructure, and most effective operational strategy, factors that shape vehicle performance. As a result, these cities had to purchase 1.5 to 2 battery-electric buses to provide the same level of service as an existing diesel or compressed natural gas bus. Learning from this experience can help U.S. cities and states avoid past mistakes and make the complex transition to electric buses faster, cheaper, and more successful

In turn, California’s innovative leadership in clean transportation has much to offer China. China modeled its national New Energy Vehicle Dual Credit policy on California’s groundbreaking Zero Emission Vehicle program. Now that China is phasing out direct subsidies for electric vehicles, it could benefit from adapting California’s Low Carbon Fuel Standard program to China’s conditions. This market-based, technology-neutral program requires the oil industry to reduce the carbon intensity of gasoline and diesel to meet increasingly stringent annual targets, or else buy credits from cleaner sources, including transportation electrification. Utilities can obtain and sell credits for providing electric vehicle charging, with extra credits for using renewable energy and charging at off-peak times. They are then required to use their credit proceeds to benefit their electric vehicle customers. Such a model could help China provide a sustainable financial incentive for electric vehicles until they reach cost parity with conventional gas vehicles, while supporting decarbonization of the grid.

China has also followed California’s lead in greening its ports and shipping, addressing a growing source of greenhouse gases. Among other things, China has invested heavily in electrifying port equipment and building shore power infrastructure. Yet it has been reluctant to require seagoing ships to plug into shore power while at berth, citing concerns about losing business to other countries as well as placing undue strain on electric grids. Despite facing similar challenges, California last month expanded its shore power regulations to require all types of ships docking at its ports to plug in. Economic analysis found that the costs of the regulation were reasonable and were outweighed by the value of avoided adverse health outcomes. The regulations provide additional flexibility measures to make it more cost-effective for vessels to comply. This example shows how switching to low-carbon alternatives can benefit the environment, human health, and vulnerable communities without harming the economy.

California’s largest ports are also now turning to microgrids in order to cope with the demands of increasing electrification — experience that could prove valuable to China. Current microgrids are focused on battery storage, but if California and China work together, they might be able to hasten the development of renewable hydrogen storage, especially when integrated with the use of hydrogen as a fuel supply for ships.

Of course, national-level cooperation would have even greater impact. One of the most effective—and globally transformative—ways for the United States and China to accelerate the clean mobility revolution would be to coordinate ambitious long-term targets. China is currently considering a national ban on fossil fuel cars. The island province of Hainan has already pledged to stop selling them by 2030. Similar proposals have been floated in the United States. The world’s two leading economies could issue independent, but coordinated, announcements of plans to phase out fossil fuel car production by 2035, and even to reach 100 percent zero-emission mobility by 2050. These measures would provide powerful market signals, not only to domestic industries but also to global finance, that deep decarbonization is a profitable channel for investment and innovation.

Climate change now poses a clear and present threat to the prosperity, security, and well-being of every country in the world. It is also the ultimate threat multiplier, aggravating already fragile situations and potentially contributing to further social tensions and upheaval. It is in the vital national interest of both the United States and China to align their efforts to alleviate the danger. The two countries are simply critical to any prospects of success globally. Once Beijing and Washington accept this reality, it becomes much easier to manage differences while lowering the overall temperature of the relationship. Then they can more effectively learn from one another and set an example for the rest of the world in rising to this unprecedented challenge.