Tag Archives: energy intensity

China Needs To Restructure Economy To Cut Greenhouse Gas Emissions

China and the five other leading East Asian economies have grown 10 fold over the past three decades and tripled their energy consumption in doing so. They are expected to double it again in the next two decades as industrialization and urbanization continues apace.

That growth has come at an environmental price, but, the World Bank now says, these economies could stabilize their greenhouse gas emissions over the next 15 years without compromising growth.  It will require “major investments in energy efficiency and a concerted switch to renewable sources of power”, according to the newly published Winds of Change: East Asia’s Sustainable Energy Future.

China accounts for 80% of East Asia’s energy consumption and 85% of its CO2 emissions.  In its case, it  will need to reduce it energy intensity by 4.3% a year over the next 2 decades, the World Bank says. Over the past decade it has achieved 3.4% a year. Beijing’s target is a reduction of  4.2% per year.

This is a daunting goal, as the World Bank notes, “given that China is at a developmental stage in which energy-intensive industries, driven by demand from domestic and export production, dominate the economy”. While China is developing nuclear power generation and low carbon technologies such as hydropower, wind, and biomass to wean it from its coal dependence, it will be structural economic change toward a less energy-intensive economy that will be the single largest contributing factor in cutting China’s greenhouse gas emissions.

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Bali Result: China 1 – 0 U.S.

Those scoring the undercard match between the U.S. and China at the U.N. conference on climate change in Bali would have given it to China on points.

Beijing scored for being seen to be a constructive participant whereas Washington was seen as obstructive. China’s media has been playing up U.N. Secretary-General Ban Ki-moon’s comments about how China has sent a positive signal to the world over climate change. As such Beijing emerged as a leading spokesman for developing countries, especially the fast emerging economies such as itself, Brazil, India and South Korea.

Beijing also saw off U.S. attempts, mainly for domestic consumption it should be noted, to portray the view that climate change is now really China’s fault, and thus China should be pressed into accepting binding numerical targets. The Bush administration, despite its volte face on climate change earlier this year, has no great appetite for binding targets for itself, but it certainly doesn’t want to have them imposed on it but not on China. Plus, the technology, voluntary targets and energy efficiency approach it is pushing promises future business for American companies that sell green and clean technologies, so it wants China and other developing nations to have a reason — and a deadline — to buy them.

This is all geopolitical power jockeying and doesn’t change any of the underlying facts: Per capita emissions in the U.S. in 2004 were about five times higher than China and 16 times higher than India’s. However, China may by now have overtaken the U.S. as the world’s largest total emitter because of its population size, rapid growth and reliance on coal to generate electricity.

And Beijing, too, has a domestic political agenda to be seen as green that goes beyond the environmental need to make the air breathable and the water drinkable. The leadership doesn’t want to cede a power vacuum around the issue into which a future possible rival could step.

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Warming To Climate Change

The success of the U.N’s two-week long climate conference in Bali will turn a lot on what China signs on for. The meeting is intended to get all countries working on how the world will mitigate the effects of global warming once the decade-old Kyoto agreement expires in 2012.

Kyoto was a fractious affair, with rich countries, notably the U.S., and poor ones, including China and India, shunning it because it had hard targets for cutting greenhouse gas emissions from 1990’s levels that they saw as hurting economic growth. But since then the political skeptics on climate change have become a dwindling minority in the face of hard science to the contrary and business discovering the beauty of appearing green.

It is not so much that the world’s demand for energy shows is abating. The International Energy Agency forecasts that demand will have increased by half as much again by 2030 with two thirds of the increase coming from developing nations and China accounting for a third of it. But there is a new focus, in China as much as anywhere else, on the environmental impact of consuming as much energy as the world does in the way that it does.

A lot of the groundwork for what may be achieved in Bali was done at the Asia-Pacific Economic Cooperation forum (APEC) summit in Sydney in early September–a gathering that included all the main players save for the European Union. That coalesced regional support for what could be called the pro-growth camp backed by the Bush administration, which has itself done a U-turn on climate change.

This approach puts technology, voluntary targets and energy efficiency at the heart of any global agreement on climate change in a way that would contain the growth of greenhouse gas admissions but still not curtail economic growth. APEC leaders agreed to work towards a 25% reduction by 2030 in energy intensity, the amount of energy used to produce a dollar of gross domestic product. Developing countries prefer this measure to absolute cuts in carbon outputs because it puts the onus for action on the big polluters like the U.S. and China.

Yet China signed on for that deal, the first time it has agreed to quantifiable targets–albeit non-binding ones. The Sydney agreement, though, is at odds with the absolute–cut targets agreed by the leaders of the eight richest countries at the G8 summit early in the year, and those are, for the most part, the core supporters of Kyoto.

China doesn’t want Kyoto-2 to wither on the vine. There is likely to be aid money for clean technologies and to adapt to the social and economic impacts of mitigating climate change. And there is a domestic political imperative driving the need to make China’s water and air cleaner. Where Beijing decides to throw its lot will greatly shape what emerges in two weeks time from the Bali meeting.

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