Chinese emissions trading pilots emerge as environmental and climate issues reach the top of the Chinese agenda. The authors discuss emissions trading in China, from the field. Editor's note: This blog post was originally posted on ChinaFAQs.
Confronted with a cooling economy and global headlines declaring an "Airpocalypse", China faces challenges on multiple fronts. While many people are quick to point out the hurdles, the reality is that its leaders are moving ahead with significant policy measures and reforms. If successful, these actions will not only help drive China's economic development, they will address another mounting threat: climate change.
The latest report from the Intergovernmental Panel on Climate Change confirms the risks of climate change and humans' central role in it. China is no less vulnerable. One-third of its coastline is highly vulnerable to rising seas that will probably lead to the relocation of coastal communities. China's agricultural production - including rice, wheat and corn - could fall dramatically within a few decades due to shifts in precipitation and soil quality. Health impacts, including malaria and other infectious diseases, are also expected to mount as global temperatures rise.
As China moves to tackle issues related to the economy, pollution and urbanisation, each carries opportunities to shift the country's emissions trajectory and make progress on climate change.
It is common knowledge that China burns a large amount of coal, with the fuel accounting for nearly 70% of China’s primary energy consumption in recent years. What is less commonly known is that China is also working on ways to reduce the impact of its coal use, including aggressively pursuing research and demonstration of carbon capture, utilization and storage (CCUS) technology.
Last month, China’s State Council announced a new action plan to combat air pollution, which included a prohibition of new coal-fired power plants in the three most important metropolitan areas around Beijing, Shanghai, and Guangzhou (known as the “key-three city clusters”). But while the plan sounds like progress, will it actually slow down China’s new coal construction? A bit of analysis suggests that it may take more action to really curb China’s appetite for coal.
International climate action took an encouraging step forward today. President Obama reached agreements with the G-20 and with China to phase down the use of hydrofluorocarbons (HFCs), potent greenhouse gases used in appliances like refrigerators and air conditioners.
This has been a big week for U.S.-China collaboration on climate change. Yesterday the U.S.-China Climate Change Working Group (CCWG), which was established in April by the Joint Statement on Climate Change, presented their report on bilateral cooperation between the two countries. Not only does it lay out actions to reduce greenhouse gas emissions, a close reading sheds light on important themes for the future of U.S.-China collaboration on climate change.
The report centers on five separate “action initiatives.” to address key drivers of greenhouse gas emissions in both countries. The U.S. and China make up more than 40 percent of global CO2 emissions, so significant collaboration between the countries is absolutely essential to addressing the problem. The five areas that the report singles out include: vehicle emissions; smart grids; carbon capture, utilization and storage; greenhouse gas data collection and management; and building and industry energy efficiency.
Although the report is built around these five initiatives, four big themes can also be seen:
The United States and China are the world’s two largest economies. They are also the two largest producers and consumers of coal, and the largest emitters of carbon dioxide. In recent years, however, their paths on coal have started to diverge.
Over the last few years, coal consumption has dropped dramatically in the United States, mainly due to low natural gas prices. In response to weak domestic demand, the U.S. coal industry has been rushing to find its way out to the international market. Last year, U.S. coal exports hit a historical high of 114 million metric tons.
However, it is worth noting that the shift away from coal in the U.S. may not be permanent. As my colleague, Kristin Meek, pointed out in an earlier blog post, coal use in the U.S. power sector was on the rise again towards the end of 2012, likely driven by the new uptick in natural gas prices.
On the other side of the globe, China’s appetite for coal continues to grow. In response, Chinese power companies are looking to tap the international coal market for sources that are more reliable and cost competitive. Among those markets is the United States. In 2012, China imported 290 million metric tons of coal. China was the third largest destination for U.S. coal exports, behind the Netherlands and the U.K.
Leading China experts and top media representatives participated in a ChinaFAQs briefing this past Friday to discuss how the country will address pressing environmental, climate, and energy challenges at home and globally in the coming years. At the National People’s Congress beginning March 5, 2013, Xi Jinping and Li Keqiang are expected to formally become China’s president and premier, respectively. Other top spots in China’s ministries will also be assigned, with implications for China’s future of low-carbon development and for the United States.
The briefing was one of ChinaFAQs’ events highlighting the reasons for China’s action on low-carbon energy, including: energy security, economic competitiveness through technological innovation, and climate and environmental impacts.
Over the past two decades, the world has witnessed a remarkable period of economic and human development: More than 2 billion people have gained access to improved drinking water; life expectancy has increased by approximately five years; more children are going to school, with 90 percent enrolled in primary education; and per capita income levels have doubled across developing countries.
China has experienced an even more profound transformation during this period. The country has sustained an annual GDP growth of around 10 percent. Five hundred million people have been lifted out of extreme poverty. People's lives have visibly improved and there are more opportunities for them.
Yet, many challenges remain. With the world's expanding population, rapid economic growth, and booming middle class, the pressure on natural resources is mounting. The truth is the world is on an unsustainable path.
China is part of this problem, but it also must be part of the solution. China faces real challenges when it comes to the environment and natural resources. Demand for water is rapidly outpacing supply, with food, energy, and domestic use intensifying for this scarce resource. The need for affordable and clean energy is on the rise. China's rapidly expanding urban population is having a significant impact on transportation, energy, and water infrastructure.