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Office of the Vice President

For Immediate Release April 9, 1999

            U.S.-Chinese Environmental Cooperation Highlighted 
                  with Agreements on Emissions Trading, 
                U.S. Exports of Environmental Technology, 
               and U.S. Investment in China's Energy Sector

Washington, DC -- Vice President Al Gore and Chinese Premier Zhu Rongji today at the close of the Second Session of the U.S.-China Policy Forum on Environment and Development announced a series of agreements that will help open Chinese markets to U.S. environmental technology, expand U.S. investment in the Chinese energy sector, and take several steps toward reducing greenhouse gas emissions in China.

As we count down the time to the 21st century in days, not years, more and more of our challenges are threats all nations face together, and no nation can solve on its own, Vice President Gore said. Nothing illustrates this better than the environment.

To meet the global environmental challenge, we must all act together. Today's agreements between the United States and China are a step in the right direction.

In an agreement that will accelerate the export of U.S. environmental technology to China, the U.S. Export-Import Bank, the Department of Energy, the China Development Bank, and China's State Development Planning Commission have signed A Memorandum of Understanding on a $100 Million Clean Energy Program. By funding the sale of U.S. environmental technology to China, this program will accelerate the deployment of clean U.S. technologies in the area of energy efficiency, renewable energy, and pollution reduction.

In an agreement that will move China closer to a system of emissions trading, the EPA and China's State Environmental Protection Administration signed a Statement of Intent on development of a Sulfur Dioxide (SO2) Emissions Trading Feasibility Study. The agreement calls for developing a study to test the effectiveness of emissions trading in China as a market-based approach to reducing greenhouse gas emissions. This approach -- which uses market mechanisms to create financial rewards for reducing pollution -- has been successful in cutting pollution at low cost in the United States.

In an agreement that paves the way for the first-ever foreign investment in an on-shore natural gas pipeline in China, Enron Corporation signed a Memorandum of Understanding on a natural Gas Pipeline Project with China National Petroleum Corporation for the joint development of a natural gas pipeline in south central China. This pipeline would represent an important piece of China's natural gas infrastructure and help offer a cleaner alternative to fossil fuels.

The pipeline agreement came out of U.S.-China discussions on natural gas policy at the Oil and Gas Industry Forum, held under the auspices of the Energy and Environment Cooperation Initiative (EECI). The EECI is an outgrowth of the U.S.-China Forum and was established in 1997 by former Secretary of Energy Federico Pena and State Planning Commission Vice Chairman Zeng Peiyan to focus U.S.-China cooperation at the intersection of energy and environmental science, technology, and trade.

The U.S. and Chinese delegations also concluded agreements involving energy efficiency, air quality management, cleaner air and cleaner energy technology, and the impact of pollution on children's health.

The U.S.-China Policy Forum on Environment and Development was founded by Vice President Gore and then-Premier Li Peng in March 1997 to expand cooperation and intensify dialogue between the U.S. and China on issues related to sustainable development, particularly protection of the global environment. The Forum is divided into four working groups -- co-chaired by representatives from various agencies -- which act as coordinating mechanisms for activities taking place under the Forum, as well as those outside its structure.

The Energy Policy Working Group discusses issues of energy generation, and major energy-using activities in the industrial, transportation, building, and utility sectors; 2) the Environmental Policy Working Group consults and coordinates on multilateral and bilateral environmental issues, such as climate change, forestry, pollution prevention and control, waste management, and health impact of pollution; 3) Science for Sustainable Development studies the application of science and technology to understand and foster sustainable development; and 4) Commercial Cooperation promotes trade in energy, environment, agriculture, and other aspects of sustainable development.

Working groups schedule their own meetings and projects throughout the year. The full Forum gathers in plenary session when the two countries deem necessary to report to the Vice President and Premier on the progress of projects and to discuss further cooperation.

For additional information on U.S.-China Policy Forum activities please contact:

Commercial Cooperation -- Padraic Sweeney, Department of Commerce, 202/482-0135
Energy Policy Working Group -- Jane Brady, Department of Energy, 202/586-5000
Environmental Policy Working Group -- Brendan O'Neil, EPA, 202/260-0680
Science for Sustainable Development -- Susan Ruffo, White House, OSTP, 202/456-6105

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