Is China the new green superpower?
- 14 Aug 2012, 14:30
- Ros Donald
jeancliclac (Flickr Creative Commons)
While Europe and the US's growth figures continue to limp along,
China's economic expansion remains remarkably resilient in the face
of the global economic crisis. Chinese economic growth is reflected
both in its growing carbon footprint and the increasing number of
trade complaints it's involved in.
interview with China Daily last week, former Chancellor and
climate skeptic Nigel Lawson, defended China's predominantly
coal-fuelled growth, and warned against imposing emissions targets
or trade barriers on the country. But does this really reflect
where China is at?
What's powering China?
China is certainly burning a lot of coal to fuel economic growth
which is currently estimated at
between seven and eight per cent. According to the
International Energy Agency (IEA), China made the biggest
contribution to the
6.1 per cent rise in carbon emissions outside OECD countries
recorded in 2011. The IEA says China's emissions rose by "720
million tonnes, or 9.3%, primarily due to higher coal consumption".
According to Chinese government figures, the country burned an
95 million tonnes of coal last year, compared to 2010.
But while China's emissions are rising rapidly, it also has
policies in place that are helping to limit the country's carbon
footprint. The IEA says energy efficiency and clean energy
deployment meant China's carbon intensity - the amount of carbon
dioxide emitted per unit of GDP - fell by 15 per cent between 2005
and 2011, cutting China's overall emissions by 15 gigatonnes of
carbon dioxide. China's government says the country currently gets
8.3 per cent of its energy from renewables - and it's led the world
in terms of installed renewable energy capacity since 2010 with
103.36 gigawatts installed. For comparison, in
2011 renewables met 3.8% of UK energy consumption, with 12.3
Last year China tripled its solar energy generating capacity and
increased wind and hydropower capacity. China's current five-year
plan includes ambitions to increase the proportion of energy from
non fossil fuels to 11.3 per cent by 2015.
The country appears to have much bigger carbon-cutting ambitions
and plans to cap coal consumption this year in order to "reduce
pollution and curb reliance on the fuel", according to
Bloomberg, with the National Development and Reform
Commission vowing to take an "active part" in international efforts
to mitigate emissions. Liu Tienan - the director of the country's
National Energy Administration - called for energy use to be
kept below 4.1 billion tonnes of coal equivalent per year by
2015, although a
spokesman from a state coal body voiced concern that the
cap would make it hard to fuel China's growth.
So although China has resisted signing up to binding emissions
cuts at international summits, it's undoubtedly got its own thing
going on in terms of climate targets. It's a complex picture that
suggests China doesn't want to be tied to coal forever - and that
at least some parts of the government are keen to have a leading
role in efforts to green the world's economy, including cutting
China's export industries
China's growth is based on the ability to export cheap products.
Its export-led growth policy allowed China to become the
world's biggest exporter in 2009, overtaking Germany. The country's
main export products include electronic goods, agricultural goods
and machinery. You can see these figures in more detail on the
World Trade Organisation (WTO) and Hong
Kong Trade Development Council sites.
Renewable energy technology is one of China's fastest-growing
export industries, presumably because growth projections for the
sector suggest there's a lot of money in it. The
Energy Information Administration, for example, predicts that
world consumption of renewable energy will almost double by 2035.
Since the early 2000s, for example, 95 per cent of China's
production of solar photovoltaic (PV) equipment has been destined
for export markets, and China dominates the global market -
accounting for half of
world PV output, according to Bloomberg New Energy
Trade disputes with China
With export growth has come a fair share of trade disputes. China
is involved in
just under half of all trade conflicts brought before the WTO
from 2011 onward. The press is full of stories entertaining the
possibility of an all out trade war
with the US - which Lawson's interview is a nod towards. Republican
presidential hopeful Mitt Romney, never one to
pour oil on troubled international waters,
has threatened to file a complaint with the WTO over alleged
currency manipulation. He claims China is undervaluing the Yuan in
order to flood the US market with under-priced products - a
practice known as dumping.
The US has failed so far to make any blanket complaints about
Chinese goods, but allegations that the Chinese state is producing
under-valued products are common. The country's renewables sector
has taken centre stage in some of these tussles. Although many
countries have created schemes to promote renewables exports,
China's have been especially comprehensive, and that is causing
friction. Last year, for example, the Chinese government revoked
grants of between US $6.7 million and US $22.5 million to domestic
wind turbine manufacturers following a US complaint to the WTO. The
government gave the subsidies on condition that the turbine
manufacturers purchased parts and materials in China, provoking a
complaint from US steelmakers.
China: the world's green competition
The complaints about China's renewables export industries indicate
just how worried other countries' domestic renewables industries
are about competition from China. Last month, European solar
companies asked the EU to investigate
whether China is selling solar PVs at unfairly low prices,
saying several of them now face bankruptcy due to competition from
China. This follows a recent decision by the US to impose 31 per
cent tariffs on Chinese PVs, after finding the Chinese government
is subsidising panel exports.
China has become more confident in filing its own complaints, too.
This year it filed a complaint about the US's application of
countervailing measures - tariffs designed to raise the price
of subsidised goods - to a wide range of its products, eight
days after the US solar tariffs were imposed. This willingness to
file retaliatory cases has fuelled concerns that trade war with the
globe's other powers looms, despite Chinese protestations to the
Competition from China has its cheerleaders, too. The Worldwatch
Institute, for example, finds in a recent report that Chinese
products' downward pressure on prices - coupled with progress in
Chinese research and development - is generally a good thing for
cleantech deployment. The institute says: "As the country's skills
in efficient, low-cost manufacturing are brought to clean energy
industries, this could widen the energy options for the world as a
The new green superpower?
In the West, many stories of China's economic rise tend to focus
either on its carbon footprint or on accusations of mercantilism.
This comes into focus especially in the world's renewable energy
industries, which - especially in the West - must promise
domestic jobs to counter political
arguments that they are expensive and ineffective. Cheap
exports from China, competing with these infant industries have
increased pressure on governments to impose tariffs, possibly at
the risk of hurting faster green rollout in the process.
Though spooked by China's aggressive market tactics, it's possible
these industries - and governments - could benefit from taking a
look at China's policies. A
recent study from the University of Pennsylvania argues that
China's renewable energy experience could provide important lessons
for other countries wishing to kick-start economic growth using
new, low carbon technologies. By offering renewable energy
industries consistent support combined with exposure to competitive
markets, despite its dependence on coal, China now has one of the
world's leading green industries.
And China's energy profile has to change - as the Pennsylvania
study's authors point out, the choking smog Beijing suffered last
year illustrates that there's a "newfound urgency" to China's
efforts to sustain growth while cleaning up its act. That doesn't
change the fact that China now has more to do than any other
country to cut its emissions, but it's worth bearing in mind.
UPDATE 14/08/2012, 4pm:
Here's an update and a bit more detail on China's renewable
energy capacity stats. According to the PEW Charitable Trusts' most
recent edition of its report 'Who's winning the clean energy
race?', China has 133 gigawatts of renewable energy capacity
installed as of 2011, up from 103.36 gigawatts in 2010.
This breaks down into wind: 64 gigawatts, small hydro: 62
gigawatts, biomass and waste: 4 gigawatts and solar PV: 3
The report is available
here - and you can see the China breakdown on page 40.