Initiative for U.S.-China Dialogue on Global Issues

By way of background, China and the United States are the largest global producers of greenhouse gas emissions (GHGs), a majority of which are carbon dioxide (CO2). A third of CO2 emissions in the United States originate from the transportation sector. Currently, China’s transportation emissions only account for 8 to 10 percent of total CO2 production, but this figure more than doubled between 2000 and 2010, and is expected to increase another 54 percent by 2020 [1].

Both countries have previously attempted to lessen transportation emissions. In 2010, the U.S. Environmental Protection Agency (EPA) implemented the Tailpipe Rules, which set emissions standards for the production of new vehicles. Similarly, since 2008, the Chinese Ministry of Environmental Protection (MEP) has implemented license plate and registration quotas in multiple cities in attempts to limit the amount of vehicles on the road.

Despite these efforts, neither regulation has been particularly successful. The Tailpipe Rules were expected to cut U.S. CO2 emissions by 30 percent from 2012 to 2016. In reality, emissions rose. By comparison, the Chinese rationing strategy reduced some emissions, with cities including Beijing reporting up to a 16 percent decrease in air pollutant concentrations by 2015, but the restrictions damaged the sizable auto manufacturing sector by depressing domestic demand for cars. In January 2017, for instance, sales figures for new vehicles were up just 0.8 percent, compared to 14 percent the previous year. This decrease in growth contributes to recent overall growth stalls in Chinese manufacturing, which constitutes a quarter of global value in this sector. The Tailpipe Rules failed because they did not sufficiently weigh consumer desire to retain older vehicles, while Chinese restrictions produced negative externalities borne of the inflexible quota.

I believe a permit system will effectively regulate transport emissions by accounting for older vehicles in the market and increasing flexibility of restrictions. These permits will take the form of stickers to be placed on the windshield of motor vehicles, organized into five categories based on expected emissions (Figure 1). These categories will conform to existing U.S. emissions standards. For example, Category 1 includes purely electric or hydrogen vehicles, while Categories 2 through 4 sort vehicles based on year of manufacture relative to contemporary EPA regulations. Cars produced between 2010 and 2016, after the Tailpipe Rules, for instance, fall into Category 2. Vehicles in category 5 include all cars manufactured before the EPA first enacted emissions standards in 1994.

These categories restrict the times and areas that vehicles can be on the road. These restrictions will be based on existing driving laws in China and increase with each category (Figure 1). (This format is inspired by France's Crit'Air Initiative.) Vehicles in Category 1 may drive anywhere at any time, while those in Category 2 may travel freely, excepting days when pollution levels in a given area exceed relative benchmarks on the Air Quality Index: 25 for American cities, 300 for Chinese cities. (New York City, one of the most polluted areas in the United States, scores a daily average of 19 on this index. The hazardous marker in Beijing is 300.) Category 5 vehicles are not permitted anywhere during rush hours and are barred from major highways between 6:00 a.m. and 10:00 p.m. Drivers of cars in categories 2 through 5 will be provided with public transportation passes to ensure feasibility of necessary travel.

The EPA in the United States and the MEP in China will oversee the production and distribution of permits and passes, which vehicle owners can apply for through the EPA or MEP websites by submitting vehicle registration and license information. A December 2017 policy announcement and a December 2018 deadline will allow 12 months for consumers to adjust vehicle choice and order permits accordingly. After December 31, 2018, drivers will be fined for operating vehicles without appropriate permits. Local police will enforce these fines. The resulting funds from fines will be distributed to the EPA and the MEP to assist with the finances of the program and the subsidization of public transport passes.

Long-term adherence to this policy is contingent upon Chinese-American cooperation on a mutual emissions reduction goal. Both countries should agree upon a minimum of 15 percent total reduction of transportation sector-related CO2 emissions by 2025. To ensure compliance, Chinese and American governments should publicly commit to this shared goal of emissions reductions, ensuring a public backlash borne of the “name and shame” format should they deviate [2].

Some officials may question the feasibility of cross-national environmental policy. However, recent research demonstrates that large public majorities in both China and the United States support the formation of international agreements to limit GHGs. Furthermore, the bilateral scope of this proposal grants it the potential to be more efficacious than similar treaties. The Paris Agreement, for instance, also relies upon “name and shame” enforcement, but the large scope of the agreement itself renders it difficult for the public to monitor and appropriately shame all 196 countries involved. This proposal will circumvent that obstacle by limiting public focus to China and the United States, thus allowing for proper enforcement and necessitating adherence.

China and the United States are global leaders in CO2 emissions. Past efforts by both countries to independently decrease emissions have been unsuccessful, prompting the need for a permit-based, goal-oriented policy. Recent research demonstrates that large majorities in both China and the United States support the adoption of international climate change agreements, indicating that a cross-national policy supported by a cooperative “name and shame” enforcement structure has significant potential for success. A permit system integrating elements of pre-existing U.S. and Chinese policy, designed to accommodate vehicles already on the road and individual flexibility, will decrease CO2 emissions while incentivizing drivers to make cleaner choices in the transportation sector, ensuring long-term sustainability.

[1] “Total U.S. Greenhouse Gas Emissions by Economic Sector in 2015.” Graph from the Environmental Protection Agency, Sources of Greenhouse Gas Emissions, U.S. EPA, 2016.

[2] As Li Shuo, a climate policy expert at Greenpeace China explained, “name and shame” is a system with clear rules, but without a mechanism to punish those who break them, like a soccer match without a referee. “Everything happens in the open stadium, so if someone fouls another player, even if he doesn’t get a red card, he will be booed by the audience.” “Talks on Paris Climate Deal Shift from Binding Pollution Limits to ‘Name and Shame’ Approach,” US News & World Report, accessed June 20, 2017.

Jessie Dalman is a senior at Stanford University majoring in history with a concentration in conflict studies.