Energy Futures and Urban Air Pollution: Challenges for China and the United States (2008)

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12 Findings and Recommendations OVERARCHING FINDINGS AND RECOMMENDATIONS 1. Learn from experience. Findings For the United States, the GDP per capita and the energy use per capita are both s ­ everal times higher than those for China. These comparisons reflect the cumulative effects of an enormous range of historical activities that contributed to building the U.S. economy. China has embarked on the same path in just the last 25 years and, as economic development has run ahead of pollution control, already is experienc- ing the adverse health, agricultural, environmental, and quality of life effects which have been largely ameliorated in the United States in the last 30 years. Recommendations a. China should learn from the successes and failures of the United States and other developed countries in reducing the influence of energy use on air quality. Mistakes already made in the United States and elsewhere should be identified (as this report has attempted to do) and avoided in China. b. Continued dialogue and information exchange among U.S. and Chinese scientists and policy makers should be promoted through professional organizations, government support programs, and the National Academies in both countries, to promote joint development of energy and pollution control strategies. 321 

322 ENERGY FUTURES AND URBAN AIR POLLUTION 2. �������������� �������� ������������ ���������������� ��������������� ����� Recognize and respond to external costs of energy production and use. Findings An important lesson learned is that air pollution damage imposes major economic costs, through premature mortality, increased sickness and lost pro- ductivity, as well as through decreased crop yields and ecosystem impacts. Most cost-benefit analyses in the United States show that emission reduction programs provide much greater benefits than their costs (Chapter 3). Emission controls are often less costly to implement than first envisioned. Appropriate programs can lead to economically efficient approaches for improving the environment, reduc- ing costs further. Control costs are not purely costs, as they create opportunities (e.g., manufacturing and sales of pollution control and energy efficient equipment) that result in economic growth. As an example, air pollution control industries in the United States generated $27 billion in revenues and employed 178,000 people in 2001 (Chapter 10). Recommendations a. Both countries need to improve permitting policies and economic mecha� nisms that reflect the external costs of pollution that are being paid by others (e.g., through adverse health effects and degraded quality of life). These might include the imposition of high enough taxes on emis� sions to make the addition of controls economically attractive, as well as r ­ ebates or subsidies to encourage use of higher efficiency and renewable t ­echnologies. b. Subsidies must be carefully considered within a broader context, so as to avoid conflicting or divergent purposes. Subsidizing one energy source in the name of energy security can have an impact on other efforts to achieve air quality goals. 3. ���������� ���� ���������� ���������� �������������������������� Establish and implement standards that protect human health. Findings Excessive concentrations of SO2, NO2, and Pb have largely been reduced to levels that comply with health standards throughout the United States, but there are still many areas in China where these exceed ambient standards. Fine particulate matter (PM2.5) and ozone (O3) exceed healthful levels in many parts of the United States and China. In terms of premature death, there is roughly a 10 percent increase in adult mortality rates for every 10 µg/m3 of annual-average PM2.5, a 0.25-1 percent increase per 10 µg/m3 24-hour average PM10, and 0.2-0.8 

FINDINGS AND RECOMMENDATIONS 323 percent increase per 10 µg/m3 increase in 1-hour peak ozone (Chapter 3). These require both local and regional emission reductions of directly emitted PM 2.5, sulfur dioxide (SO2), oxides of nitrogen (NOx), and volatile organic compounds (VOCs), which lead to secondary formation of ozone. Recommendations a. Both the United States and China should adopt minimum standards based on healthful air quality, which may require revising currently accepted standards. Local governments should be able to enact more stringent ­ocal standards, but there should not be a sliding scale based on the level l of economic development. b. Greater efforts are needed to understand and reduce emissions from l ­ocal sources in China where these standards are exceeded. These efforts would include source apportionment and dispersion modeling studies to determine source contributions, attainment studies to determine the needed emissions reductions, engineering design studies to evaluate con� trol alternatives, enforcement to assure that the controls are implemented, and monitoring at the emissions source and receptor to assure that the reductions are successful. c. Both countries need to evaluate and redesign compliance monitoring net� works to better understand the precursor gases and local versus regional contributions to PM2.5 and O3. d. Multiple complementary modeling and data analysis methods need to be applied in both countries to determine major contributors and to evaluate non-linearities in emission reduction efforts. e. Regional emission caps currently in place in both the United States and China should be reexamined, as they may be insufficient to attain healthful ambient concentrations. f. PM2.5 control should be emphasized over, but not at the expense of, PM10 and O3 reductions. 4. ������������������ ������������������������ Address pollution sources comprehensively. Findings Current pollution levels derive from a variety of energy uses and sectors on local and regional scales. All of these sectors must participate in solutions to pol- lution. Current inventories in both countries do not provide an accurate picture of emissions, especially for primary PM2.5 and VOCs. Emission factors and chemical profiles for PM2.5 and VOC derived from U.S. measurements probably do not represent the characteristics of Chinese sources, fuels, and operating conditions. 

324 ENERGY FUTURES AND URBAN AIR POLLUTION As demonstrated in Los Angeles, emission controls can be applied to many small and medium-size sources, including small engine exhaust, solvent use, refueling, ports and shipping, non-electrified locomotives, and vehicle fleets (e.g., buses, taxis, etc.), that collectively have a significant pollution impact (Chapter 10). Available technical expertise, supply bottlenecks, financing, shortsighted economic decisions, and/or political opposition may limit the application of the best available control technology at a given time. Specific technologies, such as selective catalytic reduction for NOx control and hybrid technologies for vehicles, are not yet broadly accepted or understood in China. The media can play a role in popularizing certain technologies (e.g., hybrid vehicles), thus increasing dis- semination and potentially decreasing political opposition. Recommendations a. Emission inventories must continue to be improved in both countries, with greater effort placed on developing real-world emission factors that can be related to available activity data for area and mobile sources. b. Emission certification tests, while necessary to evaluate new engine and industrial designs, do not well represent real-world emission factors. Real- world testing methods are proven technology and should be more widely applied in the United States and China. c. Fuel-based emission factors (i.e., mass of pollutant/mass of fuel consumed) provide a common basis for combustion emissions, are more easily related to available activity data (e.g., fuel sold in a certain area), and allow comparison among energy sectors. These can be more easily converted to other activity measures (e.g., g/km traveled, g/brake-horsepower-hour, g/BTU), and should be used in developing emissions inventories. d. Emission inventories need to be evaluated and verified by independent means, such as receptor modeling. Special events (e.g., wildfires, dust storms, holiday celebrations) need to be included in inventories related to the time and location of occurrence. e. There has to be participation in emissions reductions by all sectors, not just by the major industries. Enforcement and monitoring, as well as in� centives, are needed to assure that emission reductions are implemented and maintained. f. Incremental improvements should be made where possible, even if the best emission reduction technology is unaffordable at the current time. g. Governments must improve policy incentives to adopt specific control technologies. Policies requiring the implementation of pollution controls are a positive first step, but these policies must be developed in tandem with appropriate incentives to overcome financial or other barriers. 

FINDINGS AND RECOMMENDATIONS 325 5. ����������� ������������������������������ �������� ������������� ������������ Strengthen SEPA’s role in overseeing air quality planning and enforcement. Findings The United States has strong federal leadership and enforcement (EPA) for the attainment of ambient air quality and emission standards. This resulted from the realization that air pollution crossed political boundaries and that some states and localities were not sufficiently controlling their emissions. EPA maintains 10 regional offices to better interact with state and local agencies. There is a partner- ship between federal, state, and local agencies that addresses different types of emissions, with partial federal financing available to state and local pollution- control agencies. Federal highway funds can be withheld from areas that do not make good faith efforts to attain standards. In China, the central authority (SEPA) plays a minor role in air quality management in cities, with most activities car- ried out by local Bureaus of Environmental Protection (Chapter 4). The provinces have little motivation to reduce emissions that might affect neighboring regions. SEPA has, however, recently exercised more authority by halting construction on certain energy projects. Federal and local energy and air pollution policies need to be better coordi- nated in both countries. Energy policies that appear to solve one set of problems may create other problems in terms of air pollution without this coordination. In the United States, DOE and EPA have primary responsibility for develop- ing these policies, but interaction between the agencies has been limited. Their collaboration on the National Action Plan for Energy Efficiency is an example of improved coordination. In China, planning and policy making is even more diffuse, particularly with respect to energy policy. As has been stated elsewhere, pollution prevention through improved coordination is more cost-effective than pollution remediation. Recommendations a. The Chinese government needs to expand SEPA’s staff and influence over local air quality surveillance, management, and enforcement. Better co� ordination is needed between national and provincial authorities. b. As in the United States, China needs formal emission reduction plans specific to cities and regions—plans that are independently evaluated and enforced at the national level. These plans should specify the activities that will bring areas into compliance with standards and that will keep areas already in compliance from becoming more polluted. c. More incentives and enforcement for existing pollution reduction rules are needed in China. Penalties for violating air quality and emissions standards should not be a minor cost of doing business. Penalties should 

326 ENERGY FUTURES AND URBAN AIR POLLUTION be sufficient to make it worthwhile to reduce emissions rather than violate the law. d. Environmental impact should be assessed on each major energy project in China prior to construction. Permits should include air quality emissions requirements. Enforcement should be by an independent agency. Compli� ance or non-compliance should be public. Companies should p��������� rovide �� a composite analysis report to ������������������ local government�� ������������s. e. Agencies should increase the amount of collaboration on issues of energy and air quality, to ensure that strategies for one sector do not conflict with another. 6. �������� �������������� ���������� ����������� ������������� Realize the potential of energy efficiency improvements. Findings Energy efficiency provides benefits for air quality and energy security while reducing costs. Energy efficiency can provide gains similar to or greater than specific pollution controls and can reduce the need for new power generators. Cost-effective technology is currently available to greatly improve energy effi- ciency across all energy use sectors. Efficiency measures adopted in the United States since 1973 now save $700 billion annually over business-as-usual growth, with little or no burden to the public (Chapter 5). Recommendations a. The United States and China should consider evaluating the best energy efficiency standards for all energy sectors that have been formulated by each country, by their states and provinces, or by other countries. Ef� ficiency standards, like air quality standards, will need to be properly enforced in order to be effective. b. Consumer education and incentives should be increased in both countries to encourage the adoption of energy-saving technologies in all energy sectors. 7. ������������������ ��������������� ������������ ������������ ������������� Promote efficient transportation systems and sustainable urban design. Findings The rapid growth of traffic in Dalian and in similar Chinese cities will repeat the air quality and energy consumption mistakes of Los Angeles and other U.S. cities if not better managed. Los Angeles actually dismantled its rail system to make way for highways. U.S. transportation and economic development policies 

FINDINGS AND RECOMMENDATIONS 327 have created the need to drive long distances and this is now occurring in China. In many cities the solution was to build more roads, and this pattern in being repeated throughout Chinese cities as well, but it has proven to be insufficient at alleviating congestion and, in some cases, only serves to increase personal vehicle use. Still, the personal vehicle is seen as a status symbol in both countries and is an important industry to both economies; therefore policies will likely need to focus on limiting vehicle miles traveled or improving efficiency, as opposed to limiting ownership through vehicle taxes or permitting fees. Modes such as light rail can greatly improve transportation efficiency and reduce emissions from the transportation sector, but require large up-front investments and are much more difficult to retrofit into an existing transportation infrastructure. Recommendations a. Transit-oriented design and smart growth policies should be implemented to develop new urban areas or to redevelop existing areas, particularly in rapidly developing cities with high projected growth. Bus rapid transit (BRT) should be considered in a number of U.S. and Chinese cities, as it represents a low-cost (relative to subways and light-rail) transit system easily adapted to existing infrastructure, with proven success in other parts of the world. b. Congestion pricing should be examined for possible implementation to discourage unnecessary driving in both countries. Parking fees and other disincentives should also be implemented to limit the use of personal ve� hicles in urban areas. Incentives such as use of high-occupancy vehicle (HOV) lanes should be considered to promote carpooling and hybrid vehicle use, as some states in the United States have done. c. Traffic management systems, such as the system in place in Dalian, should be implemented in other Chinese cities, in order to manage the rapidly expanding vehicle fleets and to limit congestion. 8. �������������������������������� �������� ���� ��������������������� ������� Accelerate improvements in fuel economy and reductions in mobile source emissions. Findings In a 2002 report, The U.S. National Academies examined the effectiveness and impact of the U.S. Corporate Average Fuel Economy (CAFE) standards legis­ lated in 1975, and concluded that they had reduced oil consumption by about 2.8 million barrels per day (6.27 EJ per year), or about 14 percent, and that they had contributed to reduced emissions. China has more aggressive automotive fuel economy standards than the United States, which, if enforced, could do much 

328 ENERGY FUTURES AND URBAN AIR POLLUTION to contain rising motor vehicle fuel demands and to reduce emissions. Hybrid vehicles represent an opportunity to significantly improve fuel efficiency in both countries. It is noted in the 2002 report, however, that other approaches, such as higher fuel taxes, tradable credits for fuel economy improvements, taxes on light-duty vehicles that fall below CAFE standards combined with rebates for vehicles exceeding the standards and/or standards based on vehicle attributes, such as weight, size, or payload—might be more successful at improving fuel economy (Chapter 5). New vehicle emission standards remain too weak in China in spite of sig- nificant progress. Fuel quality remains poor, especially diesel fuel (Chapter 4). PM filters have been demonstrated in California and elsewhere to be very cost- effective for removing particulate, but require ultra-low-sulfur diesel fuel. Goods movement (shipping, trucking) is a large emitter that is not well documented or controlled in either country. The San Pedro Bay ports of Los Angeles and of Long Beach estimate that port-related vessels and vehicles account for 12 percent of the region’s PM, 9 percent of NOx, and 45 percent of SOx. California has set a target reduction of 85 percent diesel PM exposure (from 2000 to 2020), in spite of a projected tripling of container traffic, and has set aside $1 billion for a mitigation fund (Chapter 10). Recommendations a. The United States should examine the present CAFE standards or alterna� tive incentives to improving fuel economy, to develop standards tailored to the U.S. market and vehicle stock. b. China should enforce their fuel economy standards and consider other, possibly more effective alternatives as well. c. Higher initial cost appears to be a major impediment to hybrid vehicles penetrating the market, and thus governments should consider preferential policies, such as tax deductions for individuals (as the United States has done) and government purchasing policies (such as Pittsburgh’s), which may be most effective in China, given the high proportion of government- owned vehicles. d. China should continue to increase its vehicle emission standards and to enforce those standards; China should also improve the quality of its refined fuels. e. Additional measures should be implemented to reduce emissions from s ­ hipping and the movement of shipped goods to and from the ports in D ­ alian and in other Chinese and U.S. ports. Key stake­holders must be involved in designing, implementing, and evaluating these ­measures within a collaborative organizational structure for port pollution ­reduction. 

FINDINGS AND RECOMMENDATIONS 329 9. ��������������� ����������� ������������� Improve energy efficiency in buildings. Findings Buildings are large energy users, especially for electricity and natural gas for heating. Therefore, they also represent a significant opportunity for energy savings (Chapter 5). “Green building” guidelines have been developed and shown to have paybacks on initial investments of 1-2 years. Lighting costs and power station emissions could be greatly reduced by using fluorescent lighting and by making better use of natural sunlight. In the United States, many energy-saving technolo- gies and methods were developed in response to the 1972 oil embargo, but these were largely undone or undermined by utility deregulation in the 1990s. However, these experiences with demand-side management, integrated resource planning, and energy efficiency mandates are instructive and will be necessary components in future reductions of energy consumption. Examples include providing general information on energy efficiency opportunities, site-specific information involv- ing facility inspections and rebates, or low-interest loans to implement specific efficiency measures. Recommendations a. Building codes in both countries should be updated to require energy- s ­ aving technologies, for example, combined cooling, heating, and power (CCHP). b. Subsidies, incentives, and low-cost financing should be enhanced in both countries to encourage up-front investments in energy-efficient technolo� gies that will be paid back in future cost savings. c. Both countries should allow or encourage utilities to decouple profits from energy sales. This is occurring to some degree in the United States, but needs to be accelerated and must be implemented in China. 10. ���������������� �������������������������� ������ ����������� Promote cleaner technologies for heat and power generation. Findings Coal combustion will be a major component of energy production into the foreseeable future in the United States and China, owing to its abundance in both countries, which ameliorates energy security concern, its low relative cost and the longer lead time which would be required to develop a large scale alternate energy supply. Coal is primarily used to produce electricity, but it can also be used to c ­ reate gaseous and liquid fuels as well as other feedstocks. Most trains are elec- trified in China, thus transportation is an important consumer of coal-­generated 

330 ENERGY FUTURES AND URBAN AIR POLLUTION power. Coal-fired generators operate for 50 years or more, and, therefore, deci- sions made today to install low-efficiency power sets will take many decades to correct in the future (Chapter 6). Polygeneration plants provide an opportunity to efficiently provide power and coal-based liquid fuels. However, coal-based liquid fuels have not demonstrated reduced emissions vis-à-vis alternative fuels such as biofuels. Harnessing methane from coal mines has a number of co-benefits: it provides an additional source of energy for residential heat and power, removes an air pollutant and potent greenhouse gas from circulation before it reaches the atmosphere, and decreases a major safety risk associated with coalmine accidents. Recommendations a. Incentives are needed in the United States and China to implement cleaner coal conversion technologies (e.g., IGCC), more efficient generation meth� ods, and productive use of waste heat. b. Coal washing and sieving rules should be implemented and enforced in all sectors of the coal industry in China, to reduce SO2 and to increase combustion efficiency. c. Residential/commercial coal burning should be further reduced in China by energy conservation measures and through replacement by natural gas or biogas. d. Following the example of cities such as Huainan, coal-rich areas should implement systems to recover and make e�������������������������������� ffective use of ���������������� coalbed methane (CBM) and coke-oven gas.� ������������������� e. Polygeneration plants must be considered within a framework account� ing for possible carbon mitigation requirements in the future. Producing coal-based liquid fuels must be weighed against other potentially cleaner alternative fuel options, such as biofuels. 11. �������������������������������������� Plan in advance for pollution control. Findings It is less costly to plan for and implement pollution controls up front than to install them later. Due to lack of knowledge of pollution effects and controls, the United States didn’t act early enough to provide for emission controls on station- ary and mobile sources. Retrofitting or closing down old industries, changing vehicle fleets, remodeling buildings, and changing attitudes has been costly and is not yet complete in the United States (Chapter 6). 

FINDINGS AND RECOMMENDATIONS 331 Recommendations a. Better evaluation tools need to be developed and promulgated, specific to the United States and China, which assist project designers in evaluating the costs and benefits of different energy conservation/pollution control alternatives. b. Projects need to be planned with the expectation that pollution controls and retrofits may be required, or deemed economical, in the future, even if benefits do not exceed the costs by today’s standards. c. Analyses are needed to evaluate total energy efficiency and pollution e ­ ffects for the project’s entire life cycle: material extraction/­manufacturing, transportation, construction, use, and disposal. Environmental economics tools are also needed to perform these analyses on a recursive basis for the project’s impacts on regional and national levels. d. Since power plants have long life expectancies, adequate physical space and technological compatibility must be built in for future retrofits and conversions to cleaner and/or zero emissions technologies, advanced pol� lution abatement, and carbon capture technologies. e. National and state/provincial governments should consider establishing capitalization funds to finance future improvements and retrofits for pol� lution controls. 12. ��������������������������� ������������������������ �������� Accelerate development and use of renewable energy sources. Findings Renewable energy sources, including solar, wind, geothermal, waste-to- energy, and biofuels constitute important, but not large, fractions of energy portfolios in both countries. Several applications, such as solar water heating and wind-generated power, are economical in the long term, but require large up-front investments and have benefited in many cases from various financial incentives (Chapter 7). In terms of baseload generation, hydropower may continue to be the only reliable renewable energy source for decades. Wind-power capacity will continue to increase rapidly in both countries, but it will nonetheless continue to be an intermittent resource, as will solar energy. Renewable technologies can play an important role in distributed generation systems and thus represent a “no- regrets” choice as they replace a portion of energy supply which might otherwise have been provided by fossil fuel combustion. It is unclear whether some biofuels, including non-cellulose ethanol production, provide more renewable energy than they consume in non-renewable energy for their production. 

332 ENERGY FUTURES AND URBAN AIR POLLUTION Recommendations a. Both countries should continue to encourage the development, production and use of renewable energy wherever possible, through various policy instruments (i.e., renewable portfolio standards, tax rebates, preferential purchasing). b. Both countries should support industrial-scale demonstrations to prove that cellulosic ethanol can be continuously economically viable, at a large scale. Early research appears promising, but is not yet conclusive. 13. ������� ������������������������ ������������ �������� ������������������� Expand public participation in Chinese air quality management efforts. Findings While much data and information about emissions, ambient concentrations, and energy use are publicly available in the United States (many of them over the Internet), such data are often sequestered in China (Chapter 4). Public and scientific scrutiny of these data have improved their quality and utility over time. The EPA has gone to great expense to convert older data management methods to modern web-based systems. Many of these modern concepts can be applied in China. Although China has made progress in reporting air quality indices to the public, the data needed for successful energy and air quality management are still difficult to obtain and analyze. Reasonably accurate air quality forecast methods have been developed in the United States for public dissemination. Increasing public use is made of these forecasts to make personal decisions concerning exercise, travel, and health pro- tection for susceptible populations. These forecasts are also used in the United States for intermittent pollution controls, such as domestic and agricultural burn- ing restrictions and reduced driving periods. Forecasts are being implemented on a national basis using numerical simulations, and on a local basis for several cities using both empirical and prognostic models. Non-governmental environmental advocates play a large role in promoting energy efficiency, renewable energy, and pollution reductions in the United States (Chapter 8), but not yet in China. Citizens’ groups in the United States have also helped enforce pollution-control laws through the courts. Their activity is predi- cated on access to environmental information. China has growing numbers of NGOs working on environmental issues. In particular, Dalian has some volunteer groups dedicated to improving the environment. 

FINDINGS AND RECOMMENDATIONS 333 Recommendations a. SEPA needs to convince public officials that the advantages of disseminat� ing energy use, emissions, and air quality data outweigh the disadvan� tages. Such transparency will result in better data quality, by providing feedback on deficiencies to data generators. b. Web-based data systems should be established in China to acquire, vali� date, and distribute air quality and meteorological data. c. China should improve national and local air quality forecasting methods to better inform the public and to implement supplemental control mea� sures during high-pollution periods. d. SEPA and provincial agencies in China should continue to increase their efforts in outreach and education to engage the public in helping address air pollution problems, and to encourage public participation in environ� mental impact studies and decisions affecting the environment. e. China should increase its efforts to enable citizens to use the country’s legal system to address the harm they have suffered from unreasonable levels of pollution. f. Local governments in China should encourage more volunteer groups focused on improving the environment. 14. ����������������� ����������������������� future issues through research Improve capacity to address current and �������������� �������� ��������� and education. Findings Both countries have benefited from research, development, and technology transfer efforts in their universities, research institutes, and professional asso- ciations related to methods of energy production, pollution control, atmospheric processes, measurement systems, and simulation models (Chapters 4 and 8-11). These efforts also provide local expertise for states and provinces and train profes- sionals needed for regulatory, industrial, and educational enterprises. Each country can benefit from the research and development results of the other. Improved environmental and energy education and training is needed at all levels in both the United States and China. Outreach is needed to plant managers, engineers, technicians, workers, school children, parents, and regulatory agencies. University engineering programs need a quantitative component that addresses energy and pollution control options. Pittsburgh distributes public awareness bro- chures for cleaner biomass heating practices. Los Angeles publishes comic book- type instructional material on enforcement programs. The EPA has sponsored focused training courses, as have universities and professional associations. 

334 ENERGY FUTURES AND URBAN AIR POLLUTION Recommendations a. Both countries need to strengthen research and development in clean energy, energy efficiency, and air quality research. There is also a need for improved research across disciplines, in order to better understand the linkages between energy and air quality. b. Research funding agencies in both countries should support formal bi� lateral programs that encourage joint efforts among U.S. and Chinese scientists and engineers. c. As in the United States, expertise needs to be developed in provincial universities and research centers that do not yet have energy and environ� mental programs. The large research universities centered in the major eastern cities cannot accomplish all that is needed. d. SEPA, provincial agencies, universities, and Chinese professional organi� zations need to create outreach materials and to conduct training sessions at all academic levels. e. Chinese cities need to develop local and regional technical training cen� ters and professional education centers, in order to build the capacity to operate and maintain pollution controls and advanced technologies. 15. ������� ���������������������� ���� ���� �������� �������� ������������������ ��� Expand cooperation on energy and air quality issues, including efforts to reduce greenhouse gas emissions. Findings In the fields of energy and air quality, there are a number of topics on which the United States and China can usefully collaborate. Numerous activities are already ongoing, between government agencies, universities, NGOs, research institutions, and within the private sector. These cooperative activities under- score the important strategic relationship between the United States and China, highlight our common interests in energy and air quality issues, and provide an opportunity to not only share lessons learned from the U.S. experience, but also to jointly address new and emerging challenges as both countries make a transition to sustainability. In addition to potential health and environmental benefits, there are also important economic benefits, as both countries represent large domestic markets for technologies and products. Recommendations a. Given the existing interest in climate change, it is imperative that the United States and China begin substantial cooperation on issues to r ­ educe greenhouse gas emissions. In addition to energy efficiency, there 

FINDINGS AND RECOMMENDATIONS 335 is great potential for collaborative research on improving CO2 capture and ­sequestration technologies. b. Energy efficiency cooperation should be taking place in all sectors, includ� ing national and local governments implementing efficiency codes and standards, industries instituting more efficient practices, and research on further improvements in technologies. c. China will benefit from further cooperation on developing regional air quality management. Future activities should complement the ongo� ing work between Guangdong and Hong Kong, and efforts to develop S ­ EPA’s regional offices. Research universities and governments should also ­increase collaboration on measuring and monitoring PM2.5 and O3, as well as air quality forecasting. d. As China begins mandating specific control technologies, it will be useful for the two countries to enhance programs focused on technology transfer and capacity building. The latter is critical, since installed technologies must be properly operated and maintained in order to be effective; this will almost certainly necessitate regional activities to engage local operators from the numerous cities throughout China. e. Coal gasification appears to be in the interest of both countries, and therefore additional cooperation is needed to better apply technologies already in use for industrial purposes to commercial power generation. f. The future will depend on reliable and affordable forms of renewable energy, and thus as the world’s two largest energy consumers, the United States and China should enhance their collaboration on R&D for renew� able energy technologies, both between NDRC and DOE, and within partnerships involving other research institutions and the private sector.