China's Motivations

September 02, 2009

Ken Silverstein, EnergyBiz Insider
Editor-in-Chief

When it comes to controlling greenhouse gas emissions, China wants in. The bold proclamation comes amidst international discussions that are to take place in Copenhagen, Denmark, in December.

Its intentions may be pure. But its motivations are even clearer. If the country is to modernize its generation fleet, it needs investors. As such, China must not only become an active partner in the fight to curb heat trapping emissions but it also needs to attract at least $200 billion in foreign investment over the next decade. Toward that end, it is asking the developed world to share both its money and technology.

"In a nutshell, China has taken the climate change seriously, set clear goals and acted vigorously," says Yu Qingtai, China's climate ambassador, at a recent press conference in Germany. "China's energy consumption per-unit GDP has decreased by 10 percent from that in 2005, our target this year is another 5 percent drop." He says that the country maintained its funding levels to achieve such goals even during a recession.

China, by some standards, is now seen as the world's biggest emitter of greenhouse gases. With that understanding, it has also said that man-made carbon dioxide emissions are the leading cause of global warming. By year-end, it will update an earlier plan it had enacted in 2006.

In that year, China released a blueprint to increase its renewable energy from 7.5 percent in 2005 to 10 percent in 2010. By 2020, the country says that sustainable power will provide 15 percent of its electricity and by 2050 green fuels will supply 30 percent.

China, meanwhile, is also working to cut its energy consumption by using new conservation tools. It says energy efficiency has increased by 20 percent over the past five years and that it would like to achieve an additional 20 percent by 2020. Hydropower, furthermore, now provides 25 percent of all power generated in China while the country produces low-energy light bulbs that the rest of the world will buy.

And while the country emphasizes its vow to reducing its greenhouse gas emissions, its climate ambassador says that it will neither make firm commitments nor agree to any timelines. That's because China has 150 million people there who live on less than $2 a day. Until the nation is able to free its people from poverty, it must balance its economic growth objectives with those of cleaning its environment.

"The large amount of greenhouse gases emitted through human activities is the main reason for global warming leading to extreme weather events," says a report issued by the Chinese government at the conference in Germany. Such adverse consequences, it adds, is "threatening the security of water supplies."

Prominent Seat

To be sure, the world's most developed nations all went through their own economic revivals around the middle of the last century. They weren't consumed with the harmful effects of pollution until long after they had the accumulated the wealth to address the problem. The United States, for instance, enacted the original Clean Air Act in 1970 -- a law that is given credit for greatly reducing pollutants.

China's growing economy, however, relies mostly on coal. Critics of additional coal plant construction there argue that multinational corporations must become more environmentally conscious. China's potential, they add, will be limited unless it curbs the rate of emissions. An analysis issued there not only warns of increased temperatures within the country but also says that climate change would harm its ecology and economy and perhaps contribute to a cut in production of wheat, corn and rice by 37 percent.

The Rainforest Action Network says that the priorities must lie in developing responsible energy solutions that focus on efficiency technologies and renewable sources such as wind and solar. It's a message that it is taking to Wall Street, trying to persuade the big institutional investors that bankroll the development of new coal generation to stop. If the use of coal continues to rise in China, the group says that the country will be locked into another 50 or 60 years' worth of dirty fuel.

Like India, China wants the richer nations to lead the charge. China says that the developed countries should cut their greenhouse gases by 40 percent below their 1990 levels by 2020. At the same time, it says that those countries should provide the poorer ones the means to take similar steps. The developed nations that signed on to the Kyoto Protocol, however, are struggling to reach their initial 2012 emission targets but they are pledging to carbon cuts of roughly 15 percent by 2020.

Under the United Nation's Framework on Climate Change, China does not have to set binding carbon emissions cuts -- an evaluation based on the fact that its overall releases divided by its total population gives it a bye, for now. But the forecast is that the economic growth to occur among developing nations will be the leading source for heat-trapping emissions over the next 20 years.

"If China could replace all its old technology with new, more efficient technology, it could cut the growth of Chinese emissions by as much as half," says Alan Oxley, chairman of World Growth, which is dedicated to fostering economic growth while limiting emissions. "Unlike Kyoto, such reductions can be achieved without stifling growth and penalizing business."

China is thus walking a tightrope as it tries to rescue its people from poverty while also trying to appeal to the industrialized world. A prominent seat at the international table would not only allow it to showcase its efforts to wean itself from coal but to also make its pleas for additional aid and technology so that it can continue this pursuit.