OPINION: China: Energy and the Environment
China's struggle to cope with the environmental consequences of breakneck economic development attracts much attention. Less well understood are the efforts of the country's leaders to pursue a greener future.

Chandran Nair

After the recent benzene slick at Jilin, President Hu Jintao and Wen Jiabao, prime minister, publicly admonished those responsible. The environment minister was, in effective, sacked.

This reflects new thinking in the communist party’s leadership, which endorsed President Hu’s decree that science would guide the building of a “harmonious society” and push towards “green" gross domestic product at its annual plenum. Ten provinces are already trying to measure and report on green GDP, which is at the heart of China’s latest Five-Year Plan. It places the top priority on non-wasteful, environmentally friendly growth.

Admittedly, the government hopes to maintain some of the pace of growth; and the National People’s Congress still has to approve the plan next March. But, this is the first time the leader of any large economy has openly placed sustainable development at the head of its agenda. A clear indication of this shift came at last month's UN climate change conference in Montreal, where China’s support of the Kyoto process contributed to agreement on talks about a new deal.

It is estimated that China uses three times more energy per unit of GDP as the US and nine times more than Japan. Beijing wants to cut energy intensity by 20 per cent over five years -- not easy, even for a command and control economy. Some worry that in spite of the pledges, China will still sacrifice all to maintain its growth rate, meeting the power demand by pouring capital now in to building conventional plants that may soon become redundant. So how may China achieve its ambitions?

First, given its Montreal pronouncements, China should consider implementing the requirements of Kyoto, even though as a non-Annex I country it is under no obligation. By doing this, China will acknowledge its responsibility as the world’s second-biggest carbon dioxide polluter – more important perhaps than revaluing the renminbi – and that these steps are essential for self-survival. Experts close to the policy discussion in China say it has already projected its energy options for the next 50 years, accounting for carbon emission restrictions equivalent to its per capita share under the Kyoto formula. This is clearly why it declared at Montreal it is already cutting greenhouse gases and acknowledged the seriousness of its air pollution.

Second, China’s leaders can be bold and immediately create an internal emissions trading scheme, run according to its own rules. Piloted in the Pearl River Delta and Hong Kong, it could become the world’s biggest within a decade.

Third, China must leap into the hybrid age and then the hydrogen era for car engines. Its staggering projected growth in vehicles perhaps will make it the only country that can make these technologies economically viable -- through a scheme to favour the technologies for buses or government fleets, or by offering tax breaks to car-owners who buy them, or both.

Fourth, China should link all these through technologies that will become integral to its economy and way of life. The China Council for International Co-operation on the Environment and Development has shown that technology can cut China’s carbon emissions while limiting its oil and gas imports to 30 per cent of consumption. This would cost only 3-5 per cent more than a “business as usual” scenario that would burden the country with enormous carbon emissions and reliance on imports for more than 80 per cent of its oil and gas. Focusing on alternatives and in particular clean coal, including gasification, coupled with carbon capture and storage will help achieve both.

China may also take inspiration from Japan, the most energy efficient of any nation. China’s industrial giants could partner Japanese groups looking for new markets for innovations. China’s largest car maker, First Automotive Works Corp, and Toyota will start producing the Japanese company's Prius hybrid cars in Jilin next year.

There has been a hint of desperation in recent failures by China’s oil producer, CNOOC, to secure long-term supplies. Energy efficiency will help contain the socio- and geo-political consequences of a rabid dragon on the hunt for ever more energy to feed its growth. Beijing’s recent moves to bring energy prices nearer market values will help. The more efficient it is, the less it will need, and the less we all will need to sweat over our future.

The writer is founder and chief executive of the Global Institute For Tomorrow, an independent social venture think tank.
www.globalinstitutefortomorrow.org/