China’s Green Revolution
China has been the world’s worst environmental offender for years. That could change a lot sooner than expected.
Some good environmental news has emerged from an unlikely source: China — whose greenhouse gas emissions could peak even earlier than Beijing has promised and give the world a fighting chance to limit the worst damage from climate change.
A new study released Monday by the Grantham Research Institute on Climate Change and the Environment at the London School of Economics concludes that both China’s economic rebalancing away from dirty, heavy industries and its newfound concern for the environment are real and producing tangible results sooner than had been expected. That translates into an economy that is burning less coal and spitting out fewer emissions than even a few months ago. Last November, during a summit with U.S. President Barack Obama, Chinese president Xi Jinping said he would seek to curb the country’s emissions around 2030.
The idea of China as an environmentally conscious country is somewhat jarring given that it is the world’s largest manufacturer and has air and water so polluted that residents of some major cities are afraid to leave their homes and are developing respiratory diseases at stunningly large rates.
The peak in Chinese emissions could happen by 2025 and “could well occur even earlier than that,” concluded Fergus Green and Lord Nicholas Stern, the co-authors of the paper. Given that China is the world’s biggest source of greenhouse gas emissions, such progress could make it possible for the world to meet its target of limiting temperature rises to 2 degrees Celsius this century, they said.
Leading industrial countries in the G-7 reaffirmed that target at their two-day meeting in Germany — but stopped short of making new, concrete commitments for their countries in order to make that happen. In a joint communique Monday, G-7 leaders said that “deep cuts in global greenhouse gas emissions are required with a decarbonisation of the global economy over the course of this century.”
Obama has spent years working to reduce American greenhouse gas emissions and hopes to cut U.S. emissions by about 28 percent over 2005 levels by 2025. However, fierce opposition from congressional Republicans has derailed some of his most ambitious efforts. Many lawmakers say they are loath to curb emissions and risk harming the economy for fear of giving China — the world’s biggest polluter — a competitive advantage over American firms.
China, though, is apparently turning last year’s pledge into action, which could have potentially big implications ahead of the United Nations climate change conference in Paris later this year, as well as on the world economy as a whole. The LSE study noted that progress in curbing Chinese carbon pollution could offer ammunition against critics of fighting climate change and “lower the political barriers in rich countries to stronger climate action.”
To be sure, while there have been signs in recent months that the rapid growth in Chinese energy consumption is reaching an end, the country is still a massive user of coal, oil, and other fossil fuels. China alone consumes as much coal as the rest of the world combined, for example. And even the LSE study notes that China’s greenhouse gas emissions could continue to rise for another decade.
Over the last 40 years, China’s breakneck, coal-fired economic development lifted hundreds of millions out of poverty but turned the once-agrarian nation into the world’s most voracious consumer of energy and its biggest emitter of greenhouse gases. Coal consumption rose dramatically from just over 1 billion tons per year at the turn of the century to more than 4 billion tons a year in 2013. That created serious environmental problems, including choking smog in big cities like Beijing, which in turn has created serious political problems for China’s leadership.
After the global financial crisis, Chinese leaders recognized that the industry- and export-driven economic model that had delivered growth rates above 10 percent per year was unsustainable in the long run. China sought to rebalance its economy in order to rely more on services and domestic consumption, as well as embracing more modest, single-digit GDP growth targets.
At the same time, China started seriously tackling its environmental challenges. It slapped caps on coal consumption in key provinces and established market-based schemes to curb greenhouse gas emissions. Chinese leaders threw billions of dollars at renewable energy, including big hydroelectric projects, wind farms, and solar power. And they sought to make cleaner-burning natural gas a much bigger part of the nation’s energy mix, including a $400 billion gas deal with Russia.
Taken together, the economic rebalancing and environmental push appear to be paying early dividends, the LSE study concluded.
To be sure, in recent months there have been hints of a far-reaching change in China’s energy addiction, but the lack of good data and oft-contradictory indicators made it hard for outside observers to sort out exactly what was going on. For example, Chinese government figures showed that in 2014, coal consumption fell for the first time in nearly 20 years. But that came only after Chinese officials sharply revised upward the final figures for 2013 coal consumption.
Electricity use, which during the heady years of Chinese economic development grew as fast or faster than the economy as a whole, suddenly and dramatically came unmoored from economic growth. Electricity use grew only half as much as the economy in 2014. That was a sign that China’s economic rebalancing was progressing much further and faster than expected — or that government data was somehow suspect.
At the same time, China’s energy appetite appears unsated in other ways. It continues to build huge numbers of new coal-fired power plants, even though it doesn’t appear to need them all. In April, China surpassed the United States as the biggest importer of oil (though oil imports slipped in May). Despite the huge renewable energy push, not all of those projects actually supply power to the national grid, meaning clean energy punches in China punch below its weight.
And, while welcome for the earth’s atmosphere, China’s apparent shift is not uniformly good news in the short term. Big resource exporters, such as Australia, have for years depended on seemingly endless Chinese demand for iron ore, coal, and other minerals to fuel their own economic growth; those nations could have their fiscal health seriously threatened by a leaner and greener Chinese economy. U.S. coal companies that for years have eyed the Asian market, and especially China, as a last-ditch lifeline as coal use declines at home will also find little solace in China’s new direction.
Likewise, as China’s economy rebalances away from heavy industry and construction, industries with excess production capacity will be looking to supply other markets. China’s steel industry, for example, could be forced to dump huge amounts of metal onto the global market, which will put severe pressure on other steelmakers.
Ultimately, though, the LSE study lends credence to the idea that China — driven by economic, environmental, and political imperatives — is in the process of shedding the most damaging aspects of its own model. If China’s four-decade rise to become an economic giant was one epoch-making event, its changing course could be another — and perhaps even more important.
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