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Duke Energy CEO on what he's learning from China

We all know that China's energy needs are expanding rapidly, as the country builds the equivalent of two Chicagos from scratch every year and many utilities companies are seeing their business expand 30 percent or more annuallly. 

But it's not only China that's going to be building a lot more new power plants. Speaking Wednesday at the Woodrow Wilson Center, Jim Rogers, the CEO of Duke Energy, one of America's largest power companies, made this prediction: Through a combination of (expected) tightening in carbon controls and normal wear-and-tear, he expects that 100 percent of the power plants operating in the U.S. today will be shut down by 2050.

In other words, America, too, will be building a whole new power infrastructure over the next 40 years. 

That's surprising enough, but Rogers went on to make the case for the U.S. and China cooperating  -- or at least, the private sectors in both countries cooperating -- in power sector solutions. Consider: Both countries are reliant today on coal (the U.S. derives 50 percent of its energy from coal, whereas China derives 80 percent). Together the U.S and China consume 42 percent of total energy consumed in the world, and are responsible for about 40 percent of global carbon emissions. China is building new power infrastructure, and America will have to replace or retrofit the majority of its existing power infrastructure. Since we share some similar challenges, and operate at similar scales, couldn't we learn something from each other in the process? 

For instance, ENN, a large Chinese power company, is piloting a smart (eco) city in Langfang, 30 miles south of Beijing. The project will be built over the next year, and Rogers is watching closely to see what lessons his company might learn from the experiment. In other ways, Duke Energy and ENN are already collaborating directly, especially in research. While it's true that intellectual property concerns will scare off many other potential collaborations, it's also worth pointing out one thing American companies can gain from partnering with Chinese companies: know-how about scaling-up and bringing down costs for deploying new technology. Such lessons, born of trial and error overseas, may be worth bringing home to Wichita. 

Another thing that unites the U.S. and China: No one knows what's next.

This moment is "one of the most uncertain times in the history of our industry, and I've been a CEO for 22 years," Rogers said. He was referring in large part to the looming question of whether the U.S. Congress will regulate carbon in the future (see Ryan Lizza's piece, "As the World Burns" in this week's New Yorker for an enlightening, if depressing, inside look). Happily, in my opinion, he's now assuming the question is not if, but when. Surely, at some point in the next, oh, 50 years -- the anticipated lifespan of a power plant -- Congress will tighten the carbon belt. Or at least that's the calculation he's making.

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China ups donations to HIV/AIDS

Writing in FP earlier this summer, former U.S. ambassador on global HIV/AIDS, Jack Chow, offered a glimpse into China's policy on the epidemic: When it comes to aid money, give a bit, recieve lots and lots. At the time of writing the piece, China's contribution to the global pool of donor money to fight HIV/AIDS, the Global Fund, was $2 million over eight years. Meanwhile, the country won an $1 billion in grants. For a country with $2.5 trillion in foreign currency reserves, this seemed a bit out of whack.

Perhaps they got the message. Because at the replenishment conference that took place earlier this week -- a gathering in which countries, foundations, and other donors pledge their committments for the coming three years -- China upped the ante. From $2 million annually, China's contribution rose to approximately $4.6 million, or $14 million over the next three years. That's still not terribly impressive (especially considering that Nigeria offered a not-dissimilar $10 million for the fund.)  

Still, the pressure was clearly on. Prior to the conference, six U.S. senators urged China to give its fair share. The Global Fund itself has also been pushing in this regard, urging the rising powers to slowly transition from recipient to donor. "China, Brazil and India should remain net beneficiaries the Global Fund," Kazatchkine told AFP. "[A]t the same time, they have to be contributors." That was one of President Barack Obama's administration's big goals in the replenishment as well: to get other donors to take up a fair share of the burden, particularly amid difficult financial times.

There were a few other interesting funding committments that stand out from the conference as well. The United States offered $4 billion over three years -- an increase from past funding but still not enough to please activists. Perhaps more interesting, however was the massive $300 million committment from the Bill and Melinda Gates Foundation. That number dwarfs almost all country donors -- including countries known for giving a relatively high proportion of their GDPs to aid, Norway, Denmark and Australia. What a new world it is where the richest foundation in the United States can outspend the world's most generous national donors.

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