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China's Emissions Conundrum

By Jeff Logan

According to the latest International Energy Agency forecast (IEA), China may become the world's biggest GHG emitter as early as 2009. Although it will be a long time before cumulative Chinese emissions surpass those of the U.S., it will be interesting to note the potential change in international political dynamics after China becomes the world's largest annual emitter.

China knows its emissions are a serious problem; high-ranking officials in China's energy ministries have said as much. But its concern has yet to change its energy policy to the degree required, and China has been tepid on emissions reduction commitments in international forums.

At the same time, China added about 92 gigawatts of new coal-fired power plants in 2006 alone, more than the entire fleet of generating plants in the United Kingdom. New plants in 2006 alone will add 500 millions tons of carbon dioxide (MtCO2) to China's annual emissions. For perspective, that's about 13% of China's current coal-fired emissions, and 5% of the world total. And because coal plants are long-term capital investments, the new coal builds will likely "lock in" significant GHG emissions for several decades. This growth rate is not likely to continue in future years, though. While additional new coal plants will come on-line this year, growth beyond that should slow dramatically as China's newly added supply catches up with demand.

China's current National Energy Strategy Policy aspires to limit growth in energy to half that of GDP. But with current projections, that would still double China's energy use by 2020. The National Energy Strategy Policy also sets targets for each fuel in the electricity mix:

  • Coal capacity nearly doubles

  • Nuclear capacity quadruples

  • Large-scale hydropower doubles (equal to a dam the size of the Three Gorges project every two years)

  • Wind and solar capacity increases 100-fold

But there are problems with China's strategy. First, all economic and energy projections for China are notoriously uncertain. Second, many have questioned whether the magnitude of expansion is even feasible, given infrastructure and environmental carrying capacity. Both of those issues suggest that China's policy goals may not be realistic. Third and perhaps most importantly, China's policy institutions and stakeholders are weak and decentralized, which means that implementing a federal policy at the local level will be difficult.

China has the 4th largest coal reserves in the world (behind the U.S., Russia, and India), but much smaller gas and oil reserves. That means that if China can't meet its ambitious targets for nuclear, hydro and renewables, its energy demand will likely be met, unfortunately, by coal.

This is where the international community can, indeed must, engage China more effectively.

Energy Efficiency

Energy efficiency measures are the most effective way for China to meet its development goals while reducing emissions. China has been relatively impressive on this front, especially during the 1980s and 1990s, even though energy intensity has jumped since then. Its new vehicle efficiency standards are more stringent than those in Australia, Canada and the United States. But efficiency measures in China need support from the business and financial communities as well as regulatory reform and enforcement. Incentives for accelerated technology deployment are crucial, and international partners could help by sharing lessons through business, financial and regulatory experience. Chinese government officials are receptive to cooperation in this sector, especially with the domestic goal of cutting energy intensity by 20 percent by 2011.

Energy Security With Climate Benefits

China's growing economy has required a huge increase in oil imports. Chinese companies have been buying oil and gas assets around the globe, and this raises energy and national security concerns for some countries. Even worse from a climate perspective, China has been pursuing coal liquefaction as an energy alternative, a process which results in about twice the CO2 emissions as regular crude oil. International bodies like the IEA and the G-8 could help rationalize China's energy security concerns by giving it a more meaningful place in the global energy system dialogue.

Advanced Coal and Carbon Sequestration Technology

Given China's phenomenal growth in coal use, carbon capture and sequestration (CCS) will need to become an important part of its emissions reduction strategy, but only after industrialized countries adopt it first. China has expressed interest in related technologies like enhanced oil recovery and coal gasification, although it is unlikely to invest in integrated CCS projects in the near future due to the high costs. Still, there are international processes that could help accelerate the pace of advanced coal technology in China. It is already a participant in several. Two examples: China's largest coal-based power company, Huaneng, is part of the FutureGen "clean coal" project in the U.S., and China is one of 23 countries in the Carbon Sequestration Leadership Forum. Additionally, the United Kingdom has a bilateral agreement with China to explore the feasibility of building the country's first CCS project.

Safe, Secure Nuclear Power

China will almost certainly increase its nuclear generator fleet significantly, even if it doesn't meet its ambitious targets mapped out to 2020. That poses significant international issues for nuclear waste management and non-proliferation, so it's beyond question that the entire world has a stake in China's nuclear future. If the international community further engages China on the nuclear issue, it could help develop a better model for how nuclear power could play a role in addressing climate change, if and when the safety and security issues are resolved. Until then, the proliferation issue may continue to overshadow any possible climate benefits.

Research and Development of Renewables

On renewables, engagement in China may accelerate clean technology deployment just about everywhere. Although vague, China's renewable-energy law (in effect since 2006), has catalyzed tremendous interest in how best to deploy renewable energy. China has some impressive targets for renewable energy by 2020: 30 gigawatts (GW) of wind power, 20 GW of biomass, and 300 GW of hydropower. The international community could benefit greatly if it married its innovation and experience on renewables with China's manufacturing capacity. However, important international forums like the UNFCCC and the WTO are underutilized for this purpose, and issues like intellectual property rights remain unresolved.

Positively or negatively, it is certain that China will have a significant impact on global emissions and on international efforts to reduce their growth. But China cannot address its energy and emissions issues alone. Joint action by China and international partners is important to helping China meet its energy challenges. Active leadership by the United States to reduce its own emissions and engage in meaningful global negotiations should be the first step in that action.

This article is based on the report Understanding the Climate Challenge in China (forthcoming), in Climate Change Science and Policy by Jeffrey Logan, Joanna Lewis, and Michael B. Cummings, as well as a similar article in the Boston Review.

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