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December 8, 1997
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| Read more about Changhua Sun Rich, who earned her bachelor's degree as a re-entry student after immigrating from China |
Global warming wasn't making big headlines back in 1994, when UCSC economics doctoral candidate Changhua Sun Rich began her dissertation research. Rich was drawn to the subject in part by the issues of fairness that were being played out in the international arena. Since then, Rich's work has placed her at the forefront of efforts to identify and develop economic incentives to solve the problem.
Global warming refers to the environmental degradation caused by the production of greenhouse gases such as carbon dioxide and methane, which are major by-products of industrialization. A rift has developed between industrialized countries such as the United States and Japan, which are responsible for the majority of such damage to date, and developing countries such as China, which are on course to become the worst offenders in the next 50 years.
"Industrialized countries are saying 'We must act now to clean up carbon pollution,' but developing countries feel no obligation to participate in the cleanup, saying 'You made this mess. You clean it up,'" said Rich.
But both sides of the debate are aware that the risk of causing irreversible climate change is too big not to act, said Rich, who has proposed a system of tradeable pollution permits that provides incentives for Japan and China to reduce their emissions cooperatively. Ultimately, she envisions a Northeast Asia regional trading program with Korea and other countries, too.
"I'm trying to link national self-interest with global issues," said Rich. "I'm trying to find incentives for countries to stop seeing their differences and to begin seeing their shared interests. We have only one earth, one atmosphere, and all peoples are one. It's like my background. I'm Chinese and American, but I don't have to pick one or the other. And countries can work together to enhance their common interests."
Rich's work has been supported by UC's Institute on Global Conflict and Cooperation and by the Pacific Rim Research Program. This fall she had a paper on market-trading mechanisms accepted by the American Economic Review, the leading academic economics journal. Economics professor Daniel Friedman, coauthor on the paper, said it was the fastest acceptance he'd ever seen, "with nothing but praise from referee and editor."
Systems for trading pollution permits exist in the U.S. and elsewhere, and Rich believes that the time is right to expand such efforts because they help motivate countries to clean up their own operations and to help each other develop and acquire newer, clean technologies.
Under an international carbon emissions trading system, industrialized countries could get credits for providing financial and technical assistance to developing countries that are trying to reduce their carbon emissions.
Under Rich's model, polluters would be free to choose where to apply their cleanup efforts. If, for example, the Moss Landing power plant's quota required it to reduce carbon emissions by 100 tons, it could choose between retrofitting the Moss Landing plant or buying 100 tons of carbon credits from a developing country. Those credits would then be applied to cleanup efforts in that country.
"Economically, it makes sense, because it achieves the goal of carbon reduction at minimal cost," said Rich. Costs in developing countries range from $20 to $100 per ton because the technology to clean up old power plants is relatively available, compared to $200 per ton in industrialized countries, where advanced technology is more costly to upgrade.
The old plants are much dirtier, noted Rich, who said coal-burning power plants in China, which relies on coal for 75 percent of its energy use, burn 400 to 700 grams of coal to generate one kilowatt of electricity, compared to U.S. plants that burn an average of 300 grams of coal per kilowatt.
"Developing countries are faced with a rapidly increasing demand for electricity. They have a lot of power plants in the planning stages, and the more countries that have access to clean energy technology, the better it is for the planet," said Rich. The demand has created an opportunity to link foreign investment to environmental cleanup.
A native of China, Rich has witnessed the country's recent rapid development--and the severe domestic air pollution that has accompanied growth. High carbon and sulfur dioxide emissions from coal-burning power plants are creating acid rain that is damaging lakes, rivers, forests, croplands, and even bridges, buildings, and bicycles.
Because China's acid rain is affecting Japan, Rich has proposed expanding an existing pilot program for sulfur dioxide emissions permits in China to include carbon emissions permits. Some cities are so polluted that no new industry is being approved, a situation that hampers economic growth as well as cleanup efforts.
"To build a new plant, they have to reduce existing pollution," explained Rich. "For example, in one mining town that wanted to build a new coal plant, the city said they had to build a natural gas system for local residents first. That improves living standards and reduces pollution at the same time."
The whole subject of global warming has evolved so quickly since Rich began her work that it's hard to imagine what will be happening in just a few years. But it's hard to imagine that Rich won't remain a central figure in the field.
"When I first proposed this type of international collaboration, it sounded really far-fetched," recalled Rich. "I felt really unsettled in my heart, but even since last year, countries have started doing this. The Japanese government and the U.S. Department of Energy have been negotiating agreements with China to reduce carbon emissions jointly."
China is poised to embrace such strategies on a broad scale, although the country is feeling pressure "not to give in to industrialized countries," said Rich.
"They're caught in a subtle struggle, but I think this is going to work because there are several compound interests," she said. "Once China decides to participate, they'll have to educate the public about the necessity of reducing carbon emissions. Already there has been a change in attitude. It used to be rejected as Western propaganda, and already I see bulletin boards on the street warning about global warming and other environmental degradation."