One Word: Nuclear

The emission caps were meaningless in Kyoto since most countries broke them. China may be agreeing to this because it sees it as an empty gesture to the Western governments.

The other explanation is that China believes it is ahead of the curve on nuclear power generation. It takes years of planning to build nuclear power stations and it will also take years of intense research to make a breakthrough in thorium reactors. If China is confident it is in the lead, it may have a permanent economic advantage for decades and with carbon caps it place, economic competitors will be unable to ramp up energy production using fossil fuels, and even if they do, they still may be unable to match on cost. As the Germans are finding out, energy is a cost just like labor. If the gap is large enough, the factories move to the source of cheap energy.

Carbon caps will have the same impact as carpet bombing your competitor's industrial base if the competitor does have a cheap alternative energy source. The West is building expensive energy. The U.S. has cheap energy at the moment, but plans to export this advantage away.

China considering cap on greenhouse gas pollution

China, the world's biggest emitter of greenhouse gases, is considering plans to set an absolute cap on its carbon dioxide emissions from 2016, a top government adviser said.

The target will be written into China's next five-year plan, which comes into force in 2016, He Jiankun, the chairman of China's Advisory Committee on Climate Change, told a conference in Beijing.

"The government will use two ways to control carbon dioxide emissions in the next five-year plan, by intensity and an absolute cap," said He, a former vice-president at Tsinghua University.

......Despite the absolute cap on carbon dioxide, He told the conference that China's greenhouse gas emissions would only peak in 2030, at around 11 billion tonnes of carbon dioxide-equivalent. Emissions now stand at between 7 billion to 9.5 billion tonnes.

This scenario would depend on China achieving a real reduction in coal consumption from sometime between 2020 or 2025 and on the nation meeting its target of having 150-200 gigawatts of nuclear power capacity by 2030.