They called it “fog.” When Valerie Karplus SM ’08, PhD ’11 was living in Beijing in 2002, few seemed bothered by the haze that regularly settled over the city. Karplus—now the Class of 1943 Career Development Professor and an assistant professor of global economics and management at MIT Sloan School of Management—was in China writing a book about biotechnology in the agriculture industry when she became interested in the country’s environmental challenges.

China’s rapid economic growth during the 2000s was largely powered by coal, which was causing severe local air pollution and contributing to the global rise in climate-warming greenhouse gases. She began to wonder: “How could we innovate in a way that would address these two interlinked challenges at the same time?”

Karplus returned to the US in 2006 to enroll in MIT’s Technology and Policy Program (TPP). She recalls, “In TPP, we realized that although technology would be vital to solving grand challenges, meaningful change would require engaging stakeholders and building consensus.” Little did she know that her group’s work would eventually play a role in breaking a climate-critical impasse between the US and China.

After earning her doctorate, Karplus became director of the MIT-Tsinghua China Energy and Climate Project, a partnership between MIT’s Joint Program on the Science and Policy of Global Change and the Institute of  Energy, Environment, and Economy at China’s leading engineering school, Tsinghua University. Through several years of personnel exchange and side-by-side work sessions, Karplus’s team developed a detailed model of the country’s economy and energy system that projected the potential long-term impact of different policy initiatives. The team’s results have shown the value of implementing national climate targets by pricing CO2, a system the Chinese government began piloting in 2013.

At the time, the US and China were in a major stalemate over which nation would lower its emissions first. While the US claimed its own actions would be futile without addressing China’s higher and growing emissions, China maintained that developed nations like the US should take the lead in cutting carbon. Key to arguments on both sides were projections that China’s fossil energy usage would climb with no end in sight. In contrast, results from the MIT-Tsinghua model, shared with policy makers in both nations, suggested China’s energy-related CO2 emissions could peak by 2030 without undermining its economic development.

The US and China made a historic agreement in 2014 that both sides would limit climate-related emissions—setting the stage for the larger global agreement in Paris in 2015. “It completely changed the game,” Karplus says, “and created tremendous momentum for other countries to put serious commitments on the table.”

Karplus has continued to work with colleagues at Tsinghua University to study the Chinese energy sector, researching the impacts of tailpipe emissions standards and renewable energy targets along with the design challenges associated with the carbon trading system soon to be implemented in China nationwide.

“I see our role as being a provider of analysis as well as a catalyst for stronger cooperation between nations when it comes to the management of critical infrastructures like energy,” she says.

Karplus and her transpacific colleagues have expanded focus beyond policy design to policy implementation. One sticking point for progress on China’s environmental challenges has been that elements of its energy policy are fractured and piecemeal, with constantly changing requirements—one day mandating end-of-pipe scrubbers on coal plants, the next banning coal altogether in favor of natural gas. Karplus’s team is now studying the system-wide enablers of effective policies, focusing on what drives compliance and innovation in firms and industries.

Even though the US has indicated it will pull out of the Paris Accord, “China is committed to keeping up the momentum established in Paris, and to becoming a global source of clean energy innovation,” Karplus says. “Policy makers—in China and globally—are increasingly recognizing that environmental quality is central to achieving development goals.”

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