1. A global clean and sustainable energy future JUCCCE Kickoff Document July 18-19, 2007, Beijing

2. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 1 End-use energy demand* by region QBTU * * * * * * * Rest of world * * *** * * The US and China are 2 top energy users and generators of emission *Transformation losses (power generation. refining) allocated to end-use segments **Belgium, France, Germany, Island, Ireland, Luxemburg, the Netherlands, Norway, Switzerland, and the United Kingdom Source:MGI Global Energy Demand Model 36 Share of the U.S. and China Percent 38 * * * * * * * * Rest of world Middle east Japan Northwestern Europe** China U.S. CO 2 intensity by region Billion tonnes 4043

3. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 2 * * * * * * * Rest of world * * *** * * End-use energy demand* by region QBTU 2.2 2.0 4.5 0.6 The US and China are among the largest energy consuming countries *Transformation losses (power generation. refining) allocated to end-use segments **Belgium, France, Germany, Island, Ireland, Luxemburg, the Netherlands, Norway, Switzerland, and the United Kingdom Source:MGI Global Energy Demand Model CAGR, 2003 - 20 Percent 36 1.1 4.4 Share of the U.S. and China Percent 38 0.9

4. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 3 *US * North Western Europe *Japan China Middle East 67 At per capita level, the US remains the highest, while China is likely to exceed world average in the next decade Source:MGI Global Energy Demand Model * * 82 * CAGR, 2003 - 20 Percent 0.2 0.7 3.5 Global average 20032020 End use energy per capita Million BTU 0.7 3.4 1.2

5. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 4 Security of energy supply is increasingly critical in both countries … Energy gap between demand and supply QBTU, 2003 and 2030 Source:IEA World energy outlook, MGI Global Energy Demand Model USChina 27% 33% 9% 19% 203020032030 XX% Imbalance as % of total demand Domestic supply Domestic demand 2003 US

6. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 5 … and investment required to build up energy infrastructure is likely to soar Forecast changes of investment to energy infrastructure* in 2005 - 30 USD trillions * *Investment is needed to expand supply capacity, and to replace exhausted and obsolete supply facilities Source:IEA World energy outlook; McKinsey analysis * IEA 2003 forecast IEA 2005 forecast IEA 2006 forecast USChina

7. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 6 *US *Japan * North Western Europe *China *Middle East 3.8 Although the CO 2 emission per capita is small in China today … Source:MGI Global Energy Demand Model 4.7 * * * * * CAGR, 2003 - 20 Percent 0.2 0.4 4.0 Global average 20032020 CO 2 intensity per capita Tonnes per capita 1.5 2.1 1.3

8. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 7 China will become the largest country of CO 2 emission in 2020 * * * * * * * * Rest of world Middle east Japan Northwestern Europe China U.S. CO 2 intensity by region Billion tonnes CAGR, 2003-20 Percent Share of U.S. and China Percent Source:MGI Global Energy Demand Model 2.3 1.9 4.2 0.0 1.5 4.5 1.2 4043

9. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 8 China's dependency on coal is one of the major drivers of CO 2 emission increase * * * * North- western Europe * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * Primary energy source by fuel QBTU; percent; 2003 Unit CO 2 emissions for heating tCO 2 /Million BTU *NG *Oil *Coal * * Coal was the highest CO 2 emission level among major energy sources Source:IEA, MGI Global Energy Demand Model

10. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 9 * * * * * * * * * * * * ** * * * CAGR Percent Primary energy source by fuel QBTUs; Percent * * * 2003 * * * * * * * * * * * * * * * 0.4 U.S.China Source:IEA, MGI Global Energy Demand Model 0.2 4.6 0.4 1.0 0.9 -2.7 1.0 1.4 4.7 3.5 3.3 1.5 The balance of different energy sources in the US may stay stable, while China may move towards more coal CAGR Percent 1.0

11. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 10 CO 2 needs to be capped soon at 450 ppm to avoid severe environmental consequences Source:IPCC, Hansen-Satos research, NASA, UN University, lit search *** 540-* *E Atmospheric carbon dioxide ppm Climate changes from 1900 Degree centigrade "The temperature limit implies that CO 2 exceeding 450 ppm is almost surely dangerous, and the ceiling may be even lower" - Mariko Sato, Columbia univ., co-author with James Hansen +*+* +* Base temperature in 1900 2005 Est. 2016 Est. 2050 Est. 2100 Est. Possible scenarios Glacier dissolution in Peru which lead to shortage of drinkable water 50% decrease of tropical rain forest in Queensland Dying of shelf coral, starting from Indian Ocean Glacier dissolution in Greenland Threat of drinkable water for 1.0 - 2.8 billion people 12 - 200 million people will be under starvation threat Annihilation of northern forest in China Permanently frozen ground dissolution and desertification in Tibet Dengue fever threats 50 - 60% of world population Destabilization of West Antarctica ice-sheet ! ! ! ! ! ! ! ! ! !

12. Working Draft - Last Modified 2007-07-11 17:37:50 Printed Joint US-China Cooperation on Clean Energy (JUCCCE) BVA-262622-705-20070703-GE3-v6 11 There may be significant imbalance between supply and demand in 2050 Source:Nocera-Lewis research; IEA; EIA; MGI Global Energy Demand Model "Theoretical" supply/demand balance in 2050 with CO 2 capped at 450 ppm Supply To avoid severe environmental damage from CO 2 emission, CO 2 has to be maintained at below 450 ppm, which limits the consumption of carbon related fossil fuel Carbon-free renewables supply also has a limit –Biomass: 209 ~ 299 QBTU, requiring 10 - 15% of total land area in the earth –Nuclear: ~ 239 QBTU, implying buildup of 8000 new reactors (1 gig each). –Solar: ~ 99 QBTU, which requires PV land area as large as 1.5% of the total area of the U.S. –Wind: ~ 63 QBTU, if every site on the globe with class 3 wind or greater were occupied with windmills –Hydro: 21~ 60 QBTU, if dams were placed on every untapped river on the earth Demand Total population reaches 9 billion in 2050 1,357 QBTU total energy consumption in the aggressive case, assuming worldwide people all reach the current level of Western Europe GDP per capita 896 QBTU total energy consumption in the conservative case, assuming worldwide people all live at the current level of Equatorial Guinea * * 631~ 760 1,088 - 1,217 * (est.) 896 ~ 1,357 * (est.) Up to 20% Fossil fuel Carbon-free renewables Global energy demand Global energy supply and demand gap in 2050 QBTU Global energy supply