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The report proposes a transition for China from fossil fuels to a system based on radical efficiency and renewable energy. It identifies three key areas for innovation: ultralighting and electrifying vehicles to eliminate oil dependence, using 'integrative design' to drastically reduce energy use in industry and buildings, and shifting toward a hybridized, distributed electric grid. The authors suggest these changes can be driven by profit and business innovation rather than just regulation.

The document outlines findings from a project coordinated by the Chinese Ministry of Commerce and IISD, focusing on the adoption of carbon management standards in Chinese economic zones. Initial analysis indicates that the uptake of these standards is extremely low and primarily driven by international headquarters or global supply chain clients rather than domestic drivers. The report concludes that a lack of incentives, rather than technical specifications, is the primary barrier to adoption, and suggests enhancing zone capacity and exploring options like public procurement to encourage low-carbon enterprise.

China is implementing seven regional pilot emissions trading systems (ETS) in Beijing, Chongqing, Shanghai, Tianjin, Guangdong, Hubei, and Shenzhen to test the framework for a national ETS after 2016. These pilots could regulate between 0.8 and 1 billion tonnes of CO2 and may incorporate price control mechanisms to ensure market stability. Additionally, the pilots are expected to allow the use of Chinese Certified Emissions Reductions (CCERs), a government-administered offset program based on the Clean Development Mechanism (CDM), with potential demand reaching 100 million offsets per year by 2015.

China has become a global leader in renewable energy investment and wind capacity, though it remains heavily dependent on coal for electricity and heat. While the 12th Five Year Plan sets targets for increasing non-fossil fuel use and reducing carbon emissions intensity, the country faces challenges such as grid connectivity for wind power and water shortages in arid provinces due to coal base construction. The government is also piloting emissions trading schemes in several cities and provinces as a precursor to a national system by 2015.

The document examines China's energy landscape as of 2012, highlighting its position as a global leader in renewable energy investment and wind capacity despite a heavy reliance on coal for electricity. It details the growth of the solar and wind sectors, the environmental and water-related costs of coal combustion, and the climate goals established under the 12th Five Year Plan, including targets for non-fossil fuel use and the implementation of carbon pricing mechanisms.

China is transitioning from top-down command-and-control energy policies to market-based instruments, aiming for a national carbon trading system by 2016. While the country has been a global leader in the Clean Development Mechanism (CDM), its domestic market remains in a research-and-development stage. Current efforts focus on seven regional pilots and potential sector-based schemes for power and buildings. Significant hurdles remain, including the lack of reliable baseline emission data, the absence of a mature free-market economy, and the need for a legal infrastructure to manage permit allocation and verification.

The document argues that the United States has lost its leverage in international climate negotiations due to its failure to enact domestic climate legislation and its opposition to the Kyoto Protocol. It highlights a growing divide between the U.S. and developing nations, particularly China, noting that China is investing more aggressively in clean energy despite U.S. pressure for mitigation commitments. The briefing also discusses a trade petition by the United Steelworkers against China's clean energy subsidies, suggesting this could trigger trade conflicts that undermine UNFCCC goals. It concludes by suggesting the U.S. should utilize the Bali Action Plan's carve-out to allow other developed nations to proceed with the Kyoto Protocol's second commitment period.

The testimony argues that carbon capture and storage (CCS) is essential for mitigating climate change given that coal is responsible for over 40 percent of global CO2 emissions. The author calls for a global network of 15 to 20 demonstrations to move the technology from the 'valley of death' into commercialization, noting that technical understanding is already adequate for large-scale projects. A significant focus is placed on China, where coal-related emissions may reach 51 percent of the world's total by 2030, necessitating joint public-private partnerships and research exchanges. The document highlights existing initiatives like the Carbon Sequestration Leadership Forum and the Global CCS Institute, while recommending that the U.S. formalize partnerships with the UK, EU, China, and Australia to avoid duplication and share regulatory knowledge.

This case study examines the integration of climate change adaptation into China's Comprehensive Agricultural Development (CAD) program, specifically through the World Bank-financed Irrigated Agriculture Intensification Loan III Project (IAIL3) and a subsequent Global Environmental Facility (GEF) grant. Focused on the 3H Plain, the initiative aimed to address water scarcity and agricultural vulnerability by implementing drought-resistant crop varieties, water-harvesting infrastructure, and capacity-building for farmers, including rural women.