How China is going to save the world

As China suffers record air pollution, it is also emerging as the world’s leading clean energy investor

by Tamsin McMahon

ChinaFotoPress/CP

Last week the U.S. Embassy in Beijing upgraded its official reading of the city’s air quality on Twitter from “hazardous” to merely “very unhealthy.”

But that was scant comfort to the millions of Chinese workers who don masks for their daily commute through thick smog into “Greyjing.” Recent news that air pollution had reached its highest levels since the American government began monitoring it—roughly 44 times worse than the World Health Organization’s recommended daily levels—had ground the city’s construction industry to a halt, forced schools to cancel outdoor sports activities and even sparked several rare, critical editorials in the state-owned press. “What do we want, breathtaking growth or taking a breath amid choking air?” asked China’s state-run news agency Xinhua. It prompted two Chinese environmental activists to pay for an ad in the New York Times urging new Communist party chief Xi Jinping to pledge his commitment to the environment.

China’s ongoing struggles with pollution have been a blight on the country’s international reputation. The world’s image of China is that of an industrial behemoth fuelled by the dirtiest of energies, coal. On the surface, the reputation is well deserved. No country pumps out as much CO2 as China (not even the U.S. comes close). But behind the smog, China’s environmental woes have become an unexpected boon to the global renewable energy industry. Last week’s air quality emergency sent Chinese green energy stocks soaring on the hope that the political fallout will prompt the Communist party to offer up more public money for the country’s burgeoning environmental protection sector.

Investors are counting on it. Even as it remains the scourge of environmentalists for being the largest emitter on the planet, China is also emerging as the world’s biggest spender on green energy.

Globally, green energy investment fell 11 per cent last year, according to a recent Bloomberg New Energy Finance report. Indebted European countries slashed subsidies, India cut its spending by more than 40 per cent and the U.S. witnessed a string of solar power manufacturer bankruptcies. China’s investment in renewable energy, meanwhile, was a bright spot. It rose 20 per cent to nearly $68 billion, or a full quarter of the $269 billion global total.

From having virtually no green energy infrastructure as recently as 2008, China has built 133 gigawatts of renewable energy—mainly wind turbines—enough to power as many as 53 million homes, or every household in Canada four times over. The International Energy Agency predicted that China would overtake Europe as the world’s top renewable energy growth market. It’s a market expected to be worth more than $470 billion by 2015, according to state-owned China Merchants Securities, or almost double what it was in 2009 and equal to about eight per cent of the country’s GDP.

That investment has caught the eye of clean-tech companies in Europe and North America, who are flocking to China in hopes of selling their technologies after seeing demand stagnate or collapse in their home markets. “All the key players are going to China these days,” says Changhua Wu, Greater China director of the Climate Group, a London-based agency that promotes green energy investment. “Everyone is trying to figure out what the potential for opportunity is, partly because everyone recognizes that China could potentially be the largest market for clean tech in the world.”

As China takes the lead, everyone will benefit from the technology that is developed and exported. China is saving itself, but might also be saving the world in the process.

While the Middle Kingdom’s smog problems have earned plenty of headlines, it has also been quietly attracting a host of very unlikely supporters, including praise from the Pew Charitable Trust and the World Wildlife Foundation, which gave its “climate solver” award this year to several Chinese companies that manufacture technology to capture and recycle wasted heat, water and chemical emissions to power everything from factories to refrigerators. Greenpeace predicted the country would be on track to install 400 gigawatts of wind energy by 2030 and could become the largest solar market in the world.

The argument that China is the world’s environmental bad guy “is increasingly difficult, if not impossible, to make given China’s recent policies,” wrote the authors of an October report for the Climate Institute, an Australian think tank. The country has closed more coal-fired power plants since 2006 than the entire capacity of Australia’s electrical grid, and exported more than $35-billion worth of renewable energy technology—equal to the total value of shoes exported from China that year. This year, China is rolling out pilot projects that could eventually lead to the world’s largest carbon trading system.

“The broad scheme of things is that China believes it wants to become a resource-conserving, environmentally friendly society and that’s the way they describe it, in those exact words,” says Arthur Hanson, one of Canada’s leading experts on sustainable development. The former founding director of Dalhousie University’s School for Resource and Environmental Studies, Hanson is in Beijing this week in his role as international chief adviser to the China Council for International Co-operation on Environment and Development.

Granted, China has little choice but to invest in renewables as it seeks out more sources of energy to help power its rapidly developing economy, with GDP growth expected just shy of eight per cent this year and an urban population rising by an estimated 2.3 per cent a year. Green energy is also seen as a political tool for the Chinese government that can quell rising environmental protests and appease political dissent. “The leadership in China is really recognizing that in order to manage and govern the country better you need to find a universal underlying theme to make sure everyone is with you,” says Wu. “Green growth or sustainable development happens to be the only one.”

But beyond the obvious political and economic advantages of green energy, China is also pinning its hopes on the belief that global demand for clean technology will enable the country to transform both its domestic economy and its exports.

Until now, China’s green energy sector has largely done what the country does best: import technology developed elsewhere, reproduce it for less money and then export it back to the West. That’s changing as China pours billions into research and development and advanced education in hopes that clean tech can help shift China from being merely the low-cost factory of the world to being a global leader in developing innovative technology.

China’s current five-year plan, which runs through 2015, includes an economic development blueprint that will see more than $1.5 trillion invested in seven industries, all of them related in some way to environmental protection and renewable energy technology.

“Some of my colleagues feel we’ll be receiving an awful lot of technologies that are Chinese born and bred and brought to commercialization in Canada on the environment,” says Hanson. “It may take five to 10 years, but it won’t be a one-way flow of technology from the developed world to China. It will be in partnership or even a reverse flow.”

China is moving quickly to incorporate electric vehicle technology into what has become the world’s largest automotive market. Already, Beijing drivers have practically abandoned internal combustion motorcycles for electric ones. “There’s millions of these things buzzing by and with very little noise and limited pollution,” says Hanson. “I don’t know who is going to be the winner in the electric automobile, but I think that everyone should be looking over their shoulders at the Chinese.”

Like much of the economic development in China, the green energy industry’s growth has not come without controversy. China’s commitment to sustainable development has garnered its share of skepticism from environmentalists who argue that its investments have less to do with being an environmental role model and more to do with sustaining a green energy bubble it helped create.

The Worldwatch Institute noted that as many as half of the wind turbines in northeastern China aren’t connected to any grid, that they are “ghost” projects like the vacant cities and shopping malls that have been built to prop up China’s construction industry. In the desert outside the city of Jiuquan, for instance, as many as 20 companies are in the midst of constructing what could be the world’s largest wind farm. Yet as few as a fifth of the 3,500 massive, 60-m windmills that now dot the landscape are hooked up, according to Worldwatch. What’s more, most of the electricity they might generate is needed on the other side of the country, on the industrialized eastern coast.

While China has improved its energy efficiency, it has sometimes done so with a heavy hand, by simply shutting down small factories, or turning off power to entire communities for days.

Much of China’s solar industry was developed for export and took a huge blow after the U.S. slapped steep protectionist tariffs on Chinese-made solar panels last year, accusing the country of trying to flood the American market with heavily subsidized components for below cost. The European Union launched its own Chinese anti-dumping probe in September. (China retaliated with an investigation into European imports of polysilicon, the raw material used to make solar panels.)

Such trade disputes have had devastating effects on China’s solar industry and prompted the government to shift its focus for solar to its domestic market. In December it announced $2 billion in subsidies for the industry and says it plans to add another 10 gigawatts of solar capacity this year. Its targets for domestic solar growth have quadrupled in the past year, less out of environmental concern and more out of economic necessity.

“Companies that were formerly success stories are literally now facing life or death situations,” says the Climate Group’s Wu. “Chinese banks invested a lot of money into those companies and suddenly there’s no market anymore. That’s part of the reason why the government has lately been driving their targets higher and higher in order to create a large enough domestic market.”

Stimulating a domestic green energy market has also pushed China toward what is quickly becoming the world’s largest carbon trading market. China has emerged as the biggest user of the UN’s carbon credit program, which gives companies credits for clean energy investments they make to their businesses that they can sell on international carbon exchanges. Chinese companies represent 45 per cent of projects registered under the program and 65 per cent of its total of the emissions reductions.

This year, China is rolling out the first of seven of its own carbon exchange pilot projects across both the industrial heartland in the Pearl River Delta and China’s rural regions with plans to create a national exchange system by 2016. It’s a move the Chinese government hopes will spur much-needed private investment in green energy—which until now has subsisted largely on public money—both by encouraging more companies to invest in green energy to earn credits and by establishing a market price for carbon emissions.

China’s financial sector lacks the expertise to drive more private investment into emerging clean technology on its own, says Wu. “Banks see the sector as really high-risk,” she says. “But if you continue to rely on command-and-control to [encourage] investment, it costs too much.” The government has already signalled it will allow more consolidation among Chinese solar panel manufacturers, a sign that it won’t continue to prop up the industry forever.

If it works, China’s carbon trading market could become a model for the rest of the world and will likely be critical to reducing global pollution, if only because it will help set the Chinese price for carbon emissions. The success or failure of China’s carbon trading system is “one of the most important questions of environmental policy of our time,” wrote researchers from FORES, a Swedish sustainable development think tank.

Yet even with its ambitious investment, China’s green energy policies have hardly made a dent in the country’s overall energy consumption. China’s goal is to have 15 per cent of its energy from renewable sources by 2020. It’s already 17 per cent of Canada’s primary energy supply. Nearly 70 per cent of China’s energy still comes from coal and the country’s need for cheap energy is growing. From being a net exporter of coal as recently as 2008, China has become the world’s largest coal importer. Global demand for coal grew 4.3 per cent in 2011, according to the International Energy Agency. Virtually all of the demand came from China.

All this means pollution in China will continue to get worse before it gets better. Images of masked commuters aren’t likely to be replaced with images of windmills and solar farms anytime soon. Hanson says the expectation is that it will take China until 2030, another 17 years, to get a handle on its pollution problem. Still, those stresses will bring more opportunities for green energy companies both in China and abroad, adds Hanson. That’s perhaps not too reassuring if you live in “Greyjing” today, but for the rest of the world, a breath of fresh air.




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How China is going to save the world

  1. BEIJING — China in recent years established global dominance in
    renewable energy, its solar panel and wind turbine factories forcing
    many foreign rivals out of business and its policy makers hailed by
    environmentalists around the world as visionaries.

    But now China’s strategy is in disarray. Though worldwide demand for solar panels and wind turbines
    has grown rapidly over the last five years, China’s manufacturing
    capacity has soared even faster, creating enormous oversupply and a
    ferocious price war.

    The result is a looming financial disaster, not only for manufacturers
    but for state-owned banks that financed factories with approximately $18
    billion in low-rate loans and for municipal and provincial governments
    that provided loan guarantees and sold manufacturers valuable land at
    deeply discounted prices.

    China’s biggest solar panel makers are suffering losses of up to $1 for
    every $3 of sales this year, as panel prices have fallen by
    three-fourths since 2008. Even though the cost of solar power has fallen, it still remains triple the price of coal-generated
    power in China, requiring substantial subsidies through a tax imposed
    on industrial users of electricity to cover the higher cost of renewable
    energy.

  2. Well, Canada could have been the world leader in green tech….that’s exactly what Dion proposed….but noooooo……. so as usual we’ll be left to buy other people’s tech.

    It’s why the ‘west’ is going downhill….just like Rome and various other societies before us. We won’t change and we won’t invest in the future…..in fact we don’t even want to talk about it.

    C’est la vie.

    • Come come Emily, we in Canada don’t need to “buy other people’s tech” under any circumstances. We can steal it from the United States like the Communist Chinese and the Communist Russians do.

      And the fact of all this stolen technology coming from the west pretty much lays waste to your vapid uninformed statement that the west is going downhill. Don’t let a nose picking, temporary toad stool in the White House fool you.

      You spend too much time with Wikipedia Emily. It’s scrambling your thought process.

      • Please clarify: are you saying Canada is a Communist nation that engages in technological espionage, or Canada should be… etc?

    • It will be a while until we are able to reduce our fossil fuel consumption. I sure would be scared to fly in an electric powered airplane. And nowadays most things are made out of plastic. Plastic is made from oil. Spandex is made from oil. …..And what about the trees? They need co2..it’s their job to change that into clean air. If we wouldnt be cutting all those big swats of trees everywhere, we would have more shade, hence cooler temperatures. Also protecting some species. But nooo… only the oil sands get blamed. There are a lot of factors to fall into place before we can operate on renewable energy. But in the meantime, build those pipelines already, and plant trees

      • Well see, that would be Green Tech….in that we’ve long since learned how to make things without oil.

        And putting tonnes of C02 in the atmosphere everyday doesn’t help anything.

        Ahhh the oil sands….feeling guilty are we? Well, everyone is aware the oil sands aren’t the only problem….but pipelines are a dying breed.

        • Yup, pipelines a dying breed. LOL

          “Scotty, beam up 30,000 gallons please”

          Way to go Emily, another winner.

        • guilty about the oilsands? who me? sorry that’s where I work. Not guilty about making a hard earned living….now lets build those pipelines, so that I can finish my apprenticeship and keep providing for my family

          • If that’s where you’re planning your future….you’re in big trouble.

          • that’s right, if we don’t get the oil to market I might lose my job and have to go on EI…and not just me, but there are thousands of people working there. Not just in the plants themselves, but in the camps as kitchen staff, housekeepers, security, And guess what, more and more of the companies that provide that support staff are natives. The EI system will get taxed to the max. I hope you have a good job, so you can keep paying into it, so people like me can draw from it.

          • And I should care about that….why?

            You’ll be the one unemployed.

  3. Necessity is the mother of invention. The trouble with us West is that we have different focus and priorities where increasingly scarce financial resources have been allocated to. We let our governments govern us but who is there to keep an eye on them? Bureaucrats squander our fortunes and big governmental systems bleed us white. More sustainable environment and cleaner air with new investments in technologies? These are down the to-do list and seem so far away for now.

    • Different focus and priorities alright….hockey arenas. That gets votes.

      • Don’t forget the Zambonis for the Indians Emily, they all worry how whitey is screwing their environment. But noooooooo …… they must have their Zamboni.

    • We need to stop squandering our money on so-called ‘green’ energy alternatives that are just higher cost for lower reliability and productivity.

      • Rome said the same kind of thing.

        • Who ???

          • Romans thought they were superior too….closed themselves off to everyone else…refused to change, refused science, just put up walls and covered their ears…..and died.

            Every empire in history has fallen the same way….imperial overstretch, because they believed themselves superior and refused to change.

            We will go the same way.

          • Wrong on all counts. The Roman Empire flourished during the Roman Climatic Optimum, but then slowly succumbed to the cooler period that followed and brought on mass migrations of organized looter tribes (visigoths, vandals, ostrogoths, huns, etc)

          • Pay attention….this topic is about China, green tech, and the west’s refusal to go by science….not your nonsense.

          • You’re right, the topic is about China, so why did Emily, the thread’s biggest MORON FOOL bring up the Romans?

          • An excellent question, but one to which the answer shall doubtless remain shrouded in mystery.

          • Because the Romans also refused to change.

            So the Roman Empire died out….as will ours

          • With any luck “ours” willl start with you

            But in the meantime, as long as you continue to argue one way for the Romans and the opposite way for the FN, we’ll look on you as a fruitcake.

            And the Chinese are stuck as Communist cave men unless they steal technology from the United States.

          • Kinsella

          • Kinsella? Nooooooooooo Emily, sorry. but that’s even goofy by your standard.
            Warren couldn’t have time for the likes of YOU. He’s busy trying to help the Federal Liberals pick a photogenic space cadet to run for PM. And I think he’d prefer one that’s related to Ronny Wood.
            And Warren doesn’t like the technoogy stealing Communist Chinese nearly as much as Jack Layton did. LOL

          • Kinsella ……..Anon/Harry/Sot/Observer/FakeEmily/ChuckyCheese etc

          • My gawd….that’s dreadful.

            ‘Roman Climatic Optimum’ indeed…..AHAHAHAHAHAHA

          • Yup, sorta like your FN Indians except the Romans weren’t looking for anybody to write them a cheque or buy them a Zamboni

            And unlike your friends the Commmunist Chinese they weren’t trying to steal technology from anybody. If it ever turned out the Romans needed an aquaduct or something they worked it out themselves.

          • Kinsella….he’s looking for you, doll. Go talk to him Anon/Harry/Fake Emily/Sot/ChuckyCheese etc

        • Yup, right after Caesar crossed the Rubicon with those famous words “Iacta Alia Est” …. “The Die is Cast” … he started in on the “green” energy alternatives and they couldn’t shut him up.

          Keep up the good work Emily.

  4. As more and more years pass with no sign of a return to the temperature increases typical of the late 20th century, more and more people of the 21st century are turning away from the kinds of panic-stricken carbon strangulation policies that have been so heavily touted by special interest groups.

    The IPCC predicted that scenarios of continued CO2 increase would cause continued temperature increases:
    http://www.ipcc.ch/graphics/ar4-wg1/jpg/fig-10-4.jpg

    And sure enough, CO2 continues to increase unabated:
    en.wikipedia.org/wiki/File:CO2_data_mlo.svg

    But for over a decade global temperatures have shown trivial (if any) increase:
    http://www.ncdc.noaa.gov/sotc/service/global/global-land-ocean-mntp-anom/201101-201112.png

    The much vaunted ’cause and effect’ that blames CO2 for the past temperature increases clearly doesn’t work.

    • Actually things have gotten worse. NASA and the Pentagon are straightening out you flat-earthers.

      • What ‘things’ are getting worse?

        In Canada there has been a net improvement because the federal government pulled Canada out of the Kyoto farce, and though it is true that Ontario still has its absurd feed-in tariff and BC still has a carbon tax, both those provinces are in the process of changing their governance, so there is hope even for them.

        • Look nobody intends to argue this issue with you yet again. It’s boring, and everyone else is aware of the scientific basis for global warming and climate change, even if YOU don’t understand it.

          So if you don’t want to hear about it, find some other thread to post on.

          • You have an opportunity to learn about what affects the climate and what does not.

            I cannot force you to learn, of course, but I will hold the door open for you and anyone else.

          • Sorry….I go by science, not Con kooks.

          • Then by all means go read about Science, and find out why real science involves verifying hypotheses with experimental or observational data.

            You’ll also learn that failure to verify hypotheses means the hypotheses need to be changed.

            In marked contrast the AGW fear mongery is getting more and more shrill as the evidence for it gets less and less convincing, which is an indicator of Politics in action, not Science.

          • Sorry, not interested in your unqualified boobery.

          • Look, when the Olympics were on and the goofy Chinese didn’t want to look as if they were a pack of smog bound idiots, they shut down cars and factories for a mere 10 days and “presto” the air was as clean as it’s ever been. The Planet and it’s self cleaning system took care of it.

            Through comet and asteroid collisions and through Ring of Fire volcanoes taking place continuously over billions of years the Planet and it’s systems have taken care of it.

            You’re a fool Emily. It’s time to take YOUR OWN claptrap to some other thread/

    • By
      David Rose

      PUBLISHED:

      21:42 GMT, 13 October 2012

      The world stopped getting warmer almost 16 years ago, according to new data released last week.

      The
      figures, which have triggered debate among climate scientists, reveal
      that from the beginning of 1997 until August 2012, there was no
      discernible rise in aggregate global temperatures.

      This
      means that the ‘plateau’ or ‘pause’ in global warming has now lasted
      for about the same time as the previous period when temperatures rose,
      1980 to 1996. Before that, temperatures had been stable or declining for
      about 40 years.

      The new data, compiled from
      more than 3,000 measuring points on land and sea, was issued quietly on
      the internet, without any media fanfare, and, until today, it has not
      been reported.

      This
      stands in sharp contrast to the release of the previous figures six
      months ago, which went only to the end of 2010 – a very warm year.

      Ending
      the data then means it is possible to show a slight warming trend since
      1997, but 2011 and the first eight months of 2012 were much cooler, and
      thus this trend is erased.

      Some climate scientists, such
      as Professor Phil Jones, director of the Climatic Research Unit at the
      University of East Anglia, last week dismissed the significance of the
      plateau, saying that 15 or 16 years is too short a period from which to
      draw conclusions.

      Others
      disagreed. Professor Judith Curry, who is the head of the climate
      science department at America’s prestigious Georgia Tech university,
      told The Mail on Sunday that it was clear that the computer models used
      to predict future warming were ‘deeply flawed’.

      Even
      Prof Jones admitted that he and his colleagues did not understand the
      impact of ‘natural variability’ – factors such as long-term ocean
      temperature cycles and changes in the output of the sun. However, he
      said he was still convinced that the current decade would end up
      significantly warmer than the previous two.

      Read more: http://www.dailymail.co.uk/sciencetech/article-2217286/Global-warming-stopped-16-years-ago-reveals-Met-Office-report-quietly-released–chart-prove-it.html#ixzz2JCJkHLbr

    • So you don’t see any problem with the pollution problems in Beijing?

      Here’s the thing: even if AGW theories are wrong, we are better off reducing the amount we pollute.

  5. In Science, actual Science, theories are tested against their predictions.

    When the predictions FAIL, theories are normally revised, re-evaluated, reconsidered, re-examined, recalculated, or just plain re-jected.

    The only forces keeping the AGW alarmism theory, in the face of all its failures, from being abandoned are those of political correctness.

    • Actually, it’s science.

      Just not your grade 4 stuff.

      • Heh heh heh… that’s the sort of shrill desperation I was referring to, above. You’re unable to defend the fear-mongery, so you resort to insults.

        If you read my posts, however, you will note that my levels of literacy and numeracy handily exceed those of the average poster, much less those of a grade IV student.

        • No, it’s your effort to pretend you have any qualifications.

          Your ‘levels of literacy and numeracy’??? Hardly.

          The Roman Climate thingy had me laughing out loud in fact.

          Hey, don’t invest in Green Tech….I don’t mind. Others will get rich instead.

          • Science requires observations and conclusions, not qualifications.

            And no, I do not want to lose my shirt investing in dead end technology dependent on massive direct and indirect subsidies.

          • Like I said….your investing is your problem, not mine, bubba.

            PS….and yes indeedy, science requires qualifications….this not being the 5th century CE and all.

  6. Where is the evidence that these sorts of investments will reduce energy consumption / pollution?

    You don’t have to be an environmentalist to recognize that technologies that improve efficiency create tendencies towards greater consumption of resources to create more output to sell rather than to reduce input consumption to make the same level of output. Particularly, when there is an obligation for whatever reasons to make more sales.

    • From what I have read, to produce biofuel causes more pollution than burning regular fuel. They are using machines to sow the corn, harvest it, load it onto trucks. Process it, truck it to the destination. …Plus a variety of produce has given up the soil to plant corn…food that is not eatable..crazy world

      • to PRODUCE biofuel causes more pollution than BURNING regular fuel.

        ***

        As it reads, this sentence could very easily be true. The best comparison would be the production AND burning costs of both fuel. it would not be the first time extremists (usually on the right) use misleading numbers to advance their agenda.

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