China’s mixed results

China‘s state-directed approach to making its energy use both more efficient and less polluting has its strengths and weaknesses.

As the Washington Post reported in its lead business story on Sunday, China has been taking some drastic action to meet its emissions-cutting goals, notably a central government campaign started in August that has required several of China’s provincial governments to make steel mills work nine days then take five days off and for cement plants’ electricity supplies to be cut off for stretches. As the story points out, the programme rewards officials who ruthlessly achieve their targets, even in the face of local protests.

The Banyan Notebook blog on Economist.com likewise contrasts China’s ability to direct energy and emissions cuts by fiat with the convoluted process required by western democracies. While the rule-by-edict approach of the Chinese achieves results, at least in the short-term, both stories note the drawbacks.

Banyan cites the example of Anping county, which it argues demonstrates both China’s seriousness in achieving its goals as well as the limits of its power after successful protests over the arbitrariness of the cuts led to a reversal of policy:

… Even so, China does seem to be taking its energy-intensity target extremely seriously, which must be welcomed. Nor is it bad news that a local government cannot get away with high-handed collective punishment of its power-guzzling citizens. It too will have to enter the morass, and try to persuade people to change their behaviour.

The Washington Post story also raises the difficulties of monitoring China’s progress due to questions of accuracy of its statistics. As is widely acknowledged, China’s statistics are notoriously subject to manipulation – due, at least partly, to the fact that preferment can be based heavily on statistical results. So, “the lack of a national accounting standard for emissions makes it difficult for independent observers in China and elsewhere to monitor how much progress is being made,” the Post’s story notes.

The story quotes Ranping Song, manager of a greenhouse gas accounting programme at the World Resources Institute, an environmental think tank, saying that work is being done on ways to bring China into compliance with international standards, “but it remains unclear whether companies will disclose their data publicly, and how they’ll be held accountable if they miss targets … “‘It may be difficult for the government to get the right information to make the right decisions,’ he said.”

Economist Intelligence Unit forecasts show that China’s electricity consumption (subscription required) alone will double over the next decade. (See sample table below).

Electricity consumption and supply
  2009a   2010b   2011b   2012b   2013b   2014b   2015b   2020b  
Consumption (twh)                
Industry 2,210.4 2,459.9 2,714.5 3,007.8 3,289.7 3,598.5 3,951.2 5,341.6
Transport 36.6 42.0 47.9 53.7 59.6 66.1 72.5 98.7
Residential 451.2 501.7 558.4 615.1 677.1 744.9 804.2 1,136.1
Commercial & public services 180.4 204.8 230.8 259.5 291.3 325.1 357.1 513.9
Other 818.5 895.8 977.8 1,066.0 1,157.4 1,253.3 1,354.5 1,831.6
Total 3,697.1 4,104.3 4,529.4 5,002.1 5,475.2 5,987.9 6,539.5 8,921.7
 % change, year on year 9.4 11.0 10.4 10.4 9.5 9.4 9.2 5.0
Capacity (gwe)                
Combustible fuels 674.5 759.5 850.1 941.4 1,036.4 1,136.4 1,251.4 1,812.8
Nuclear 9.0 9.8 11.4 17.0 24.1 35.4 44.2 60.2
Hydro 172.3 182.3 191.3 207.3 219.3 232.3 244.3 300.3
Non-hydro renewables 20.2 30.3 42.4 54.6 63.7 71.9 81.1 118.7
 Geothermal
 Solar 0.2 0.3 0.4 0.6 0.7 0.9 1.1 1.7
 Tide/wave/ocean
 Wind 19.2 29.2 41.2 53.2 62.2 70.2 79.2 116.2
Net maximum 875.9 981.8 1,095.1 1,220.1 1,343.5 1,475.9 1,620.9 2,291.9
a Economist Intelligence Unit estimates. b Economist Intelligence Unit forecasts.
Source: Economist Intelligence Unit.

In terms of its energy mix, combustible fuels – especially coal – still will account for the bulk of generating capacity, even though nuclear capacity grows exponentially and non-hydro renewables also continue their rapid pace of growth.

It should be noted, however, that China has consistently increased its targets for non-fossil fuels over the last few years and has also shown a greater determination to meet both clean-energy (and emissions-cutting) goals as well as economic growth. As China Daily reports on Monday, government direction is the overriding factor but also public (and business) opinion is coming round more to the idea that growth and a better energy mix are not mutually exclusive.

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