Chinese President Hu Jintao’s visit this week with President Barack Obama could open the way toward a much-needed new era in U.S.-China cooperation on clean energy and climate change.

The rest of the world is well aware that solutions to the climate challenge rest upon the extent to which these two countries – the world’s largest emitters of greenhouse gases – are willing and able to reduce their carbon pollution. Not surprisingly, the global climate negotiations are sometimes portrayed as a negotiation between these “big two.” While this is an exaggeration, it is clear that solutions to climate change don’t exist without strong action by the U.S. and China.

The two countries, of course, face different national circumstances. The U.S. is the world’s most economically and politically powerful country, and China is still establishing its identity as a major power on the global stage. Though China’s annual emissions have surpassed America’s, the U.S. is, and will remain for some time, the largest historical emitter of greenhouse gases. And per capita, Americans still produce far more greenhouse gases than the average Chinese person.

So China still approaches the international climate negotiations from the perspective of a developing country, emphasizing the principle of common but differentiated responsibilities and the importance of leadership by developed countries, who they consider responsible for the majority of climate-inducing emissions to date.

That said, China’s negotiating approach seems to be evolving. China was criticized by some observers for its role in the near-collapse of negotiations in Copenhagen 13 months ago. But China appeared to desire to be perceived as playing a constructive role in last month’s more positive Cancun conference. China’s evolving stance may also be due to a greater sense of confidence based on domestic action. Though its emissions continue to grow, in recent years China has built a strong foundation of progressive policies to promote clean energy and low-carbon development. These include:

- A national clean energy standard;

- National energy efficiency goals, implemented through province-level targets;

- Ambitious reforestation programs that will help sequester atmospheric carbon dioxide;

- Motor-vehicle-efficiency standards that are 20 percent more stringent than those in the U.S.; and

- Some experimenting with market-based approaches to reducing emissions.

These actions appear to be motivated by domestic concerns at least as much as any desire to cooperate internationally. China’s leaders know their country is vulnerable to impacts of climate change, including the risks that shrinking Himalayan glaciers pose on the country’s already-stretched freshwater resources.

The dilemma for China and the United States is not just finding low-carbon sources of energy, but also setting a path for sustainable economic growth that encompasses both manufacturing and agriculture. The two countries should focus on spearheading development of biomass for bioenergy, biofuels and bioproducts, to reduce reliance on the entire barrel of oil.

The technology for producing biofuels and bioproducts exists today and its commercial use is growing. In fact, the World Economic Forum projects that use of biomass for fuels, energy, and chemicals can generate upwards of $230 billion for the global economy by 2020. At the same time, the deployment of industrial biotechnology for the transformation of biomass has the potential to save up to 2.5 billion tons of carbon dioxide (CO2) emissions per year, according to a WWF report.

Continued reliance on fossil fuels – even switching to a more abundant supply, such as coal – does not hold the same potential for economic growth coupled with greenhouse gas reductions. According to a 2010 MIT study, producing fuel from coal (using a Fischer-Tropsch process) has lifecycle greenhouse gas emissions that are more than twice those of petroleum. Even with carbon capture and sequestration technology, coal-to-liquid fuel greenhouse gas emissions are 10 percent higher than petroleum fuel, according to the same study. And the technology for carbon sequestration is not as close to commercial use as biomass technologies.

The United States and China have a shared interest in nurturing and accelerating the rapidly growing clean energy economy. While each country has different strengths and weaknesses with respect to development in this area, we share common economic, security and environmental interests in the expansion of this dynamic new sector.

Research undertaken by Pew and Bloomberg New Energy Finance over the past 18 months has documented the rapid emergence of the global clean energy sector, which accounted for $230 billion worth of finance and investment in 2010. Dramatic growth in recent years has been helped in part by stepped up investments in the United States and more recently—and significantly—in China. Over the past two years, China surpassed the United States as the world’s leading destination for clean energy investments, attracting more than $50 billion in 2010 alone.

While China and the U.S. are clearly clean energy competitors, there also are compelling reasons and opportunities for the two nations to cooperate.

Historically, the United States has been the world’s leader in innovation in the sector. But U.S. policies have failed to provide investors with the long-term certainty and predictability that are needed to maximize investment and deploy clean energy assets.

In contrast, China trails in energy research but now leads in renewable power deployment. China’s adoption of ambitious clean energy targets and policies has made it a world leader in manufacturing and has helped reduce renewable energy prices worldwide.

In the future, the two countries should work together to expand the renewable energy sector around the world. In fact, the United States and China have taken initial action to establish a robust shared clean power agenda. In 2009, the U.S. and Chinese governments signed a series of cooperative agreements, including research and energy efficiency. Together, they have established a Clean Energy Research Center, jointly funded with $150 million dollars, to work in three areas—carbon capture and storage, energy efficient buildings and electric vehicles.

On the U.S. side, the University of West Virginia and the University of Michigan will play lead roles in these efforts, with participation from General Electric, American Electric Power and other leading private sector companies. In addition, a number of U.S. companies, including General Electric, have established bases of operation in China, and a number of Chinese companies, like Suntech, have developed operations in America.

Cooperation—even in the face of competition—must continue because both nations have so much to gain by advancing technology development in service of common economic, security and environmental objectives. Over the next 10 years, the global clean power sector represents a $2.3 trillion worldwide investment opportunity. The U.S. and China stand to be leading beneficiaries of robust growth in the sector. Working together in mutually beneficial ways will help foster a cleaner and more prosperous future.

Energy cooperation has emerged as a major theme of President Hu’s state visit to the United States. Amid rising tensions in the East and South China Seas and China’s rapidly building military capabilities, cooperation on one of the world’s most pressing concerns is certainly something to be celebrated.

Increasing clean energy collaboration between our two countries is an important means of advancing energy research and development. It is also a means of sparking greater intellectual competition among academics and private sector innovators, which will be a boon to meeting the world’s growing energy demand and for curtailing greenhouse gas emissions.

Yet, as important as these tasks are, corporate partnerships and joint research ventures have even more important (albeit somewhat intangible) benefits. Business to business, government-sponsored, and academic exchanges on clean energy will increase cultural understanding and give a range of actors in both countries a stake in strong relations. These are stabilizing forces for global trade and global politics. Consider the alternative: that the relationship between two of the world’s major powers would, to an even greater degree, lack trust by their publics and leaders. Bilateral relationships that lack breadth or that start and end with a military focus are far more tense and volatile. The odds of misreading intentions or conflicts spinning out of control rise.

There are certainly hurdles in clean tech cooperation. As other experts here have noted, rule of law and other tough issues will not evaporate overnight. One thing that will be required from the U.S. side is tenacity. Even if China’s government was intent on enforcing international property rights today, its implementation is far from universal; we will continue to hear stories of American companies declaring that their patented work has been compromised. We can expect snags in the programs that the Hu and Obama administrations have established. But the benefits will be crucial far beyond individual patents, people, and firms.

The dividends for U.S.-China energy cooperation and programs like CERC will be measured most often in dollars, or perhaps new patents or tangible technical progress. We must not forget that the most important benefits will be in the stability that stems from expanded international cooperation, trade, dialogue, and diplomacy.

The United States and China both have a lot to gain from collaborating on clean energy, and President Hu’s visit is a symbol of China’s commitment to this partnership.

As the two largest cumulative greenhouse gas emitters, both countries are looking for ways to transition to cleaner energy while advancing their private sectors. China is moving quickly on renewable energy, clean technology, and energy efficiency but still faces the energy challenges of a rapidly industrializing country, and shares the United States’ heavy reliance on coal for energy.

Hu’s visit will catalyze cooperation on these topics and more. At the summit, the leaders will discuss expansion of the Clean Energy Research Centers (CERC) agreed to during President Obama’s November 2009 visit to Beijing. The CERCs will result in joint work plans and will provide a road map for work on advanced coal technology, electric vehicles, and building efficiency. These and other joint projects can lead to economies of scale and lower costs, redounding to the benefit of industry in growth and jobs, while also addressing climate change.

In the past, Congress has eyed China’s progress on energy with suspicion. However, in the past year the country has been more open on its strategies to reduce emissions, including committing in Cancun to regularly report their progress on emissions reductions. In addition, many of the issues around trade were resolved during the December 2010 Joint Commission on Commerce and Trade meeting (JCCT). While not every contentious issue will be resolved immediately, the countries’ continued collaboration will result in new opportunities for American businesses.

In addition to the summit, Members of Congress should keep an eye on the release of China’s 12^th Five Year Plan in March, which will likely include new targets for pollutants and formal adoption of China’s 40-45% carbon intensity reduction target pledged at Cancun. These commitments show that China is serious about its clean energy goals, and the United States can learn from their actions.

Applied Materials strongly supports cooperation between the United States and China toward the development of applicable and replicable clean tech solutions to meet global 21st century development needs. In recent months, at events such as the 2010 UN Climate Change Conference and through the resulting “Cancun Agreements,” the United States and China have clearly shown an increased commitment to develop and enhance clean energy technology.

Applied Materials has worked to foster U.S.-China energy cooperation efforts and just this week announced the signing of a memorandum of understanding with Peking University, the China National Energy Administration (NEA) and the U.S. Department of Energy to bring a Solar Decathlon competition, similar to the one held here in the United States, to China.

Rapid urbanization, rising living standards and economic growth will continue to challenge China to meet overall power demand, while reducing emissions at the same time. The Solar Decathlon partnership will help inspire and challenge our next generation of innovators, scientists and researchers to develop new solar energy and energy efficiency technologies and reward their creativity in architectural design and sustainable living. Through this idea-generating program, we can ensure solar energy technologies are being developed and implemented to shape a cleaner, safer environment. Applied will be working with Peking University and the respective national energy agencies over the next few years to ensure implementation of a Chinese Solar Decathlon in 2013.

The Solar Decathlon, which brings together the private sector, government agencies and academia, is exactly the type of program needed to establish a strong, productive and innovative relationship with China. Applied Materials will continue to lead the way encouraging ground-breaking clean tech advancement among the next generation through the development of programs such as the Solar Decathlon.

Green thinking has blinded us to the huge common interest we share with China. That interest is their top energy priority and ours as well if you ask the man on the street. Ironically, this blind spot would be our best hope for climate policy. Long ago, we understood this but did not see the need for climate policy. Now we see the need, but have lost the key. This key would pay for climate policy up to a 30% cut in global CO2 emissions—at least it would pay for us addicts.

In the 1970’s the United States and Europe panicked over the vast outflow of “petro-dollars.” China is panicked by its surging addiction to oil (80% imported by 2030). That is China’s #1 energy concern, a fact disputed by no one who studies China (rather than green energy). The key to oil policy, discovered by Kissinger’s team in 1974, would unlock today’s deadlocked climate debate.

The goal back then: force the oil price down. Domestic policies: adopt “a strenuous, mandatory conservation program” and a research program “dwarfing our moon-landing program and the Manhattan Project… to develop new energy sources” (Time, Nov. 1974). That was climate policy, but who knew?

Kissinger’s global policy also paralleled climate policy. “Secretary Kissinger privately urged the main oil-importing countries to cut petroleum consumption as much as 15 percent … to force price down” (NYT, 10/13/74). “A counter-cartel of … countries that import 80 percent of the world’s oil are uniting” (NYT, 11/4/74). “Kissinger outlined a strategy for consumer-nation cooperation aimed at … bringing about lower oil prices” (NYT, 11/15/74).

The key to this seeming paradox (price down, consumption down) is found in this headline: “U.S. Oil Plan: High Price is Key” (NYT, 11/27/74). What gives? Are oil prices going up or down? It’s really pretty simple. There are two prices for oil. Put a tariff on oil imports and the price at the pump goes up, while the price paid to OPEC goes down.

Today that would be called a carbon tax, back then it was called the Republican energy plan. One reason green thinking can’t penetrate Main Street is green fear of falling oil prices. Get over it. That’s what a successful climate policy would do, and that’s why China and Main Street would love it.

“The most difficult single step [in] the Kyoto process will be to bring China and the United States into alignment. … Rather than blaming each other, why don’t the two countries focus on an external problem? … a [climate] cartel’s advantages for oil-importing nations, such as the United States and China, would induce cooperation better than the threat of global climate change” (from Carbonomics: How to Fix the Climate and Charge It to OPEC, 2008).

By the numbers: A global carbon price, set at $50/ton, would cut emissions about 30% and would impose adjustment costs on the United States of about $45 billion per year. But it would save us about $55 billion in oil payments to OPEC (Carbonomics, p. 252). China would also likely come out ahead. And all this is without even counting the climate benefit.

In his just-published remarks to the Washington Post prior to Wednesday’s upcoming summit with President Obama, Chinese President Hu called for "common ground" and "practical cooperation" between the two countries. From the standpoint of confronting our greatest mutual challenge -- global climate change -- the two largest emitters of greenhouse gases share no greater common ground than a warming planet.

And on Tuesday, a series of agreements that make good on President Hu's second call -- practical cooperation -- for the joint development of clean energy technologies, are being inked by AEP, the largest utility in the U.S., and two of the biggest Chinese energy enterprises: China Huaneng Group and State Grid.

While these deals are momentous, they are not the first of their kind. In addition to the new AEP agreements, Ming Sung, head of Clean Air Task Force's Beijing office, has helped build numerous business-to-business clean energy partnerships in the U.S. and China. The deals have involved leading energy companies like Duke Energy, KBR, and China’s privately-held ENN Group, and have featured a wide range of climate-friendly technologies, from systems that capture and store CO2 emitted by coal-fired plants to utility-scale solar generators to devices that use CO2-based foam to extinguish fires in coal seams. The success of these efforts offers another powerful reminder that collaboration between the U.S. and China, not competition or trade protectionism, is the best way forward to solving our climate crisis.

These joint enterprises will play an especially important role in the transformation of coal-based energy, which will remain a key source of energy for decades. The United States and China produce half of the world’s coal-fired power emissions, control almost a third of world’s coal reserves, and have built their energy sectors around large fleets of coal-fired generating stations. Coal use by China is expected to nearly double over the next 20 years.

The challenges posed by our shared reliance on coal also create an opportunity, however; because coal-based power is responsible for such a large share of global CO2 emissions, the development and deployment of technologies that allow us to derive energy from coal without greenhouse gas emissions will be a huge step toward climate change mitigation. Partnerships between companies from China and the West are crucial to accelerating the commercialization of low-carbon coal-based energy generation. Energy companies in North America and Asia have enormous experience and expertise working with coal, and are similarly motivated to develop technologies and techniques that will preserve a role for coal in a carbon-constrained world.

The environmental and economic benefits of transitioning to clean energy will be smaller and slower to materialize if Western and Chinese companies do not work together. The climate challenge will only be solved by multiplying opportunities for rapid development and deployment of low-carbon generating technologies, not by restricting engagement between companies in the world’s most dynamic economies. Investments by one country reduce the cost of those technologies worldwide, increasing the likelihood that carbon capture and storage and other critically important systems will be widely deployed in time to help avert the worst consequences of climate change.

Presidents Obama and Hu must lead the effort to address the reality of climate change while accounting for our countries’ specific economic and social circumstances. In the meantime, the Clean Air Task Force will continue to foster “practical cooperation” between innovative energy companies in Asia and the West, in order to develop and commercialize the technologies we will need to ensure the world has the affordable, carbon-free energy it needs.

Since the creation of the Asian-Pacific Partnership, the U.S. and China have been cooperating on energy and climate issues. Could more be done? Of course. But further accomplishment would require a stronger rule of law in China and a more productive diplomatic relationship between the two countries. Without stronger intellectual property rights protections, companies with advanced energy technologies are not going to put them in China.

Trade must benefit both parties, and both have to recognize that need. A level playing field for both nations, as well as a stronger set of shared values, would produce greater climate and technology benefits. Yet, the reality is that diplomatic, military, economic, and global differences limit how much can be expected.

Like most nations, China pursues its own self interest, not that of other nations or the UN. Subsidizing its industries is part of its national policy to gain global stature. Beijing simply plays by another set of economic rules. Tightened controls on exports of its rare earth elements (REE) are only the most recent example.

In the short run, its REE production constraints and its use of those exports as a political weapon will disadvantage trading partners and raise the cost of “green” systems along with other products that rely on these unique metals for technological innovation.

But longer term, China will be the loser.

Several actions -- including export restrictions, recent termination of sales to Japan to force the release of a trawler’s captain, and China’s failure to expand production capacity -- have brought global attention to these critical chemical elements.

The world cannot be comfortable with China or any other nation providing 97% of critical materials that are needed by the Defense Department and manufacturers of hybrid cars and a wide range of electronic technologies. Hitachi and Toyota are making progress on motors unconstrained by REE needs.

There is now a strong incentive to develop alternatives and to diversify production. Until the 1980s, the U.S. was a dominant producer of these rare metals. It should be clear that we need to rebuild that capacity for economic and national security reasons.

Progress on cleaner energy by both countries will continue at a pace determined by economics and technology. Attempts to force its deployment on a political time table will continue to result in unintended consequences. In America, the so-called “clean” energy systems of choice are not economical and require large subsidies. At a time when our national debt has grown to dangerous levels, it is foolhardy to continue subsidies which distort capital investment, shield consumers from true costs, and reduce tax revenues.

A strong economy requires abundant and affordable energy. Both the EIA and IEA project that for the next two decades, at least, fossil energy will provide over 80% of our energy needs. Actions to constrain that use of traditional fuels in order to limit CO2 emissions will fail or have unintended economic consequences.

A look at energy use and carbon emissions makes clear that our economy is steadily decarbonizing and using carbon more efficiently. Our energy systems are “cleaner” today than 10 or 20 years ago. But given the world’s energy budget, the pace of technology, and economic reality, “clean” energy in the near term is a myth. Very low or zero emission energy systems sufficient to meet the needs of our economy are decades into the future. They will only be developed by sustained and substantial public and private investments in R&D.