Is Red China Going Green?

All eyes have been on China in recent years as the world anxiously watches the country's rapid development. China has been experiencing double digit economic growth and now stands poised to emerge as an economic and political world-power. Judging from a slough of recent news items, it seems they may stand to become world leaders in another area as well: green technologies and sustainable development.

China's number one priority over the last couple decades has been simple: growth. They have been succeeding, but this growth has not been without it's consequences. The Asian nation's surging double-digit economic growth has been characterized by high inputs and high consumption but low yeilds. According to ChinaWatch, China generated only 4 percent of the gross world product but has been eating up vast quantities of resources - China consumed 40% of the world's cement, one third of its steal, one quarter of its copper and 40% of the world's coal in 2004. This unprecedented economic expansion has also brought with it massive environmental damage and horrific pollution. China's waterways are polluted, acid rain is becoming a big problem, and, as Thomas Freidman corroborates, on some (not to uncommon) days in Beijing and other major Chinese cities, the air quality is so poor and the smog so thick that you can't make out buildings a mere six blocks away.

This is the bad news, but its also the cause of a growing awareness among Chinese political and business leaders: China's growth has to be environmentally sustainable or it won't be economically sustainable. At some point, the environmental and health damages of unchecked growth will outweight the quality of living improvements that growth is ment to bring. Many have been skeptical about the 'green rhetoric' coming from China's leaders in past years. Previous Five Year Plans have included language hinting at some ambiguous 'commitment to sustainable development' but little concrete developments ... until now.

The past few months have seen a number of concrete steps towards sustainability coming out of China. These are just the beginning of what will have to be a long and consistently fought effort to forge a path into China's future that includes both economic growth and a healthy and sustainable environment for its citizens. However, the shear number of these steps points to a growing attempt to make a 'Red China' go Green.

The 11th Five Year Plan

ChinaWatch reports that the Chinese government has included a goal of building an energy-efficient, less resource-intensive and more sustainable society in a new proposal that will be part of the 11th Five-Year Plan for 2006-2010. The proposal was adopted by the Communist Party Central Committee in October and the Plan will be the central guiding document for China's development over the next five years. It includes several key initiatives in energy efficient building, transportation fuel economy and others that will be discussed below.

Michael Totten's column in this months issue of Solar Today [the column is not online, I apologize] points out that China's economy requires 50 percent more energy per unit of output than the global average, five times more than the United States and 10 time more than Japan. They obviously have a long way to go or a lot of room to work with depending on how you look at this. So what is China doing to start make this energy efficient and sustainable society a reality?

Building a Greener China

Acheiving a transition to an energy efficient society will require takling a key energy consumption sector. The Chinese Ministry of Construction reports that buildings and construction account for roughly half of all domestic energy use. Ninety-five percent of China's buildings are highly inefficient with Residential buidings in Beijing, for example, requiring three times as much energy as a similar one in northern Germany even though their climates are similar. Worse, according to Totten, the 510 biggest government buildings and office blocks in Beijing use as much electricity as all of the capital city's residential buildings.

To address this sector of their society, the Chinese government has set an ambitious goal of transforming all existing buildings into energy-saving buildings by 2020. Premeir Wen Jiabao and the Vice Minister of Construction, Qiu Baoxing, called earlier this year for the establishment of national green building standards. Additionally, the premier's order requires that all buildings built after 2005 are at least 50% more energy efficient than existing buildings and that any new buildings in Beijing meet the stricter standard of a 65% improvement over existing buildings.

As Vice Minster Qiu says, "The cost of green buildings, saving 60 percent of the energy per unit, is only five to seven percent higher than the ordinary buildings, but it will greatly reduce energy consumption and environment pollution." This is clearly an important sector to address and, as Qiu recognizes, "It is urgent for China to promote energy-efficiency and green buildings since the fast pace of China's industrialization and urbanization has posed great pressure on the supply of energy and resources."

Additionally, as WorldChanging reports, the Chinese government has contracted with design firm Arup to build four more eco-friendly developments in major Chinese cities. These four will be in addition to Arup's Shanghai expansion, Dongtan, which is already underway. The first phase, a 630-hectare development intended to house a 50,000-person community, is set to be completed by 2010. According to the Guardian, the Dongtan development, which is situated on an island in the mouth of the Yangtze river near Shanghai, aims to eventually build a city three-quarters the size of Manhattan by 2040. The Guardian reports that "the eco-cities are intended to be self-sufficient in energy, water and most food products, with the aim of zero emissions of greenhouse gases in transport systems." The locations of the four additional developments have not been decided.

On the Road to Clean Air

China has been pushing the rapid expansion of car ownership amongst its citizens. Totten reports that China's vehicle production has been doubling every two years and vehicle ownership is projected to soar from 20 million in 2002 to 50 million in 2010 and a 100 million by 2020. If China is not careful, this rapid build up in automobile use could be disasterous to their environment and eventually their economy.

This is why part of the new Five Year Plan involves the adoption of stricter vehicle fuel-efficiency standards. The standards are not as strict as the semi-voluntary standards that the auto industry has adopted in Europe but are higher than those in the United States (much to our embarrasment). According to an analysis by the US PIRG, "China’s new fuel economy standards require 32 different car and truck weight-based classes to achieve between 19 and 38 mpg by 2005, and between 21 and 43 mpg by 2008." Unlike the US standards which mandate that an average of automobiles produced in a particular weight class meet the targets, China's standards present a minimum fuel economy that all cars produced in that class must meet. According to the US PIRG, "In China, if the automobiles do not meet the prescribed standards, they simply cannot be sold."

These new standards will thus be significantly stricter than those in the US. They are expected to displace more than 210 million barrels of oil, the equivalent of annual fuel use of 25 million cars.

Within months of the adoption of these new fuel standards, Toyota announced that it will be open a production plant with its partner FAW to begin construction of hybrid vehicles for sale to the Chinese market. Furthermore, in early September of this year, Volkswagen announced that it would develop, assemble, and sell a gasoline-electric hybrid minivan, which it hopes to market during the Beijing Olympics in 2008.

In addition to the efficiency standards, China has impemented a new Vehicle Tax Policy which imposes a levee of 1 percent on smaller-engine vehicles, but up to 20 percent on larger-engine vehicles, to discourage their use. Meanwhile, in the 11th Five-Year Plan, the government states that China will step up efforts to research and develop advanced vehicle technologies, such as hybrid electric and fuel cells as well as cleaner burning fuels and engines. Just today, for example, Green Car Congress reports that China’s First independent engine test facility is opening and will focus on developing future fuels for the Chinese market and customized additives to improve fuel quality and significantly prolong engine life.

Negawatts

Recognizing the vast potential of energy efficiency, Chinese utility experts have been inventorying opportunities such as high-efficiency commercial lighting that could be brought 'online' much faster and at a lower cost than building new power plants. According to Totten, with the help of a $197 million loan from the Asian Development Bank, China is implementing the first of multiple planned "Efficiency Power Plants" (EPPs) - a set of demand side management programs to be repaid by consumers through electricity prices and savings to the electricity system. The first such 'negawatt plant' will be the equivalent of a 465 MW power plant and will come online in the next two years. [See "The "Efficiency Power Plant": A Rapid, Low-Cost Path for Energy-Saving Investments in Jiangsu and Shanghai"here]

As efficiency measures, EPPs have very high peak demand coincidence and hihg reliability. They will offer an estimated lifetime delivered cost of about 1 cent per kilowatt-hour saved, significantly better than a real power plant of any kind. An additional 530 MW EPP will be brought online within 36 months and another 712 MW within 48 months.

Renewable Energy - New Targets and Untapped Potentials

As I've posted recently, China has also recently announced a stronger commitment to renewable energy that includes a doubling of China's current use of renewable energy to 15 percent of the rapidly developing nation's energy mix by the year 2020. This supply side focus on renewables is crucial to a sustainable energy future for China and will be coupled with the various demand side measure discussed above.

Additionally, China's renewable energy potential is enormous. As I discussed in a recent post, China has vast untapped wind potential. A new report released by the Chinese Renewable Energy Industries Association (CREIA) and sponsored by Greenpeace and the European Wind Energy Association (EWEA) has shown that China could at easily double its current wind energy target for 2020 and that the country's vast wind potential could be enough to meet all of its current energy needs. With just 43 wind power stations, China had an installed capacity of only 760,000 kilowatts by the end of 2004. However, experts within the Chinese industry believe that 40 GW can be delivered within 15 years; rising to ten times this by 2050.

This is only their wind resource. China is already the world leader in the use of solar hot water and programs like the Shanghai's 100,000 Solar Roofs Initiative will boost China's use of solar power as well. China has already been on an agressive campaign to develop its hydro resources - a fact that not all environmentalists are thrilled about - and likely has other untapped renewable resources that can and ought to be incorporated into their energy supply mix if they hope to develop a sustainable society.

Green GDP and Environmental Expenditures

Finally, the environmental harm of China's economic development has not been lost on its leaders. In the recent past, the Chinese government's single-minded focus on growth led them to evaluate regional leaders - once simply held accountable for party loyalty - on their ability to deliver rapid increases in GDP, leading inexorably to environmental disaster.

However, according to WorldChanging, in early 2004, President Hu Jintao suggested that a more "scientific concept of development" would be a good idea; beginning in early 2005, ten regions, including Beijing, began a test program to measure the environmental costs of GDP growth. The program is now about to rolled out nation-wide.

The leadership decided on a process that calculates the "Green GDP" by subtracting the costs of natural resources and pollution from the standard GDP value. The greater the waste of resources or production of pollution, the worse the result -- for the GDP and for the regional leaders. It seems that China's leadership has finally recognized the economic costs of environmental and health damages their rampant growth has caused in the past. Factoring these costs into their calculations of GDP - however difficult this task may be - will certainly help guide China towards a more sustainable and healthy future.

Additionally, in an effort to address some of the harms caused by their economic development, China has committed just this Tuesday to investing over $156.6 billion in environmental protection between 2006 and 2010. This amounts to more than 1.5 percent of the country’s GDP over this period. This investment is almost double that of the previous five years. This sizable investment indicates that China's leadership is clearly aware of the severity of their environmental problems and is committed to pouring significant investments into repairing their environment and preventing or mitigating future damage.

Conclusions

While China has a monumental task in front of them if they hope to transform their previously unchecked growth into a sustainable and managle economic development that can coexist with a healthy environment, I think that the sheer number of initiatives and programs I've discussed above indicates that they are beginning to undertake this task. China's development over the next few decades will be a grand experiment. The world will continue to watch as China continues its growth and tries to wrestle with and mitigate the repurcussions of that growth. It is clear that China cannot continue the unchecked growth it has experienced in the past decade; such growth is neither economically feasible in our resource constrained world - if China were to attempt to reach the average oil consumption of the United States, for example, the nation would need to use 90 million barrels daily, 11 million more than the entire world produced each day in 2001 - nor environmentally sustainable (clearly), nor even truly economically sustainable as the health costs, losses in productivity due to quality of life degredations, political unrest, etc. caused by rampant and unsustainable growth will continue to eat away at larger and larger portions of China's GDP.

As the gang at WorldChanging aptly put it, "As China goes, so goes the future." Let us fervently hope that this is truly the beginning of a green path for China.