Climate Challenge Hinges on Fueling China with Clean and Cheap Energy

This column originally published at the Breakthrough Institute blog

I've said it before and I'll say it again: when it comes to the global climate challenge, as goes China, so goes the world.

Driving that aphorism home, co2scorecard.org, a not-for-profit project that closely tracks global greenhouse gas emissions, now reports that China's CO2 emissions increased by 906 million tons in 2009 -- the second largest annual increase for any country in recorded history. China's soaring emissions were enough to completely offset the drop in emissions wrought by the economic havoc plaguing much of the Western world (see graphic below).

China's unprecedented surge in CO2

As Goes China, So Goes the World: Soaring CO2 emissions from energy use in China drive global greenhouse gas trends (click image to enlarge; source: co2scorecard.org)

Over the last decade, China's annual emissions of climate destabilizing CO2 jumped by 5 billion tons per year. According to Shakeb Afsah, President and CEO of co2scorecard.org, that's "the highest [increase in annual CO2 output] for a single country in recorded history, representing an average annual emissions increase of almost 12%--more than four times the rate observed [for China] the previous decade."

To put this unprecedented 5 billion ton increase in annual CO2 emissions in context, Mr Afsah and colleague Kendyl Salcito note that during the 14-year long post-war boom period of 1959-1973, during which U.S. CO2 emissions rose each year, America's annual output of CO2 jumped by only 2 billion tons.

This new analysis comes on the heels of the latest International Energy Agency's World Energy Outlook, which projects China's soaring demand will single-handedly account for 36% of all global energy demand growth over the next 25 years. According to the global energy watchdog group, China's energy use will rise 75% between 2008 and 2035, raising the nation's share of global energy use to 22 percent, up from 17 percent today.

Sliding backwards?

Despite a much-publicized national climate policy centrally focused on driving down the CO2 intensity of the Chinese economy through greater industrial and power plant efficiency, the amount of carbon emitted per unit of economic output in China slid backwards during four of the last ten years. In 2009, after four years of steady progress, the carbon intensity of China's economy took a big step backwards, regressing to 1999 levels, according to co2scorecard.org (see graphic below)

Backsliding: The carbon intensity of China's economy took a big step backwards in 2009, erasing a decade's worth of periodic gains to revert to 1999 levels. (Click to enlarge; Source: co2scorecard.org)

That factoid means there's more going on here than just simple economic growth driving emissions growth. China's macroeconomic policies are actually driving the carbon intensity of the nation's economy backwards, working at cross-purposes with the central government's avowed climate strategy.

The analysts at co2scorecard.org point the finger at China's promotion of an export-oriented manufacturing economy, including the nation's increasingly controversial currency policies.

Since joining the World Trade Organization in 2001, China has built up a manufacturing juggernaut that has taken over global supply chains for some of the world's most energy intensive industrial processes, including cement, steel, glass and chemicals production, turning predominately to carbon-intensive coal to fuel this economic engine. That was a recipe for both soaring economic output and carbon emissions alike.

The recent impact of the global recession has only exacerbated China's outsized role in global emissions. According to co2scorecard.com:

Through the global recession, China's depressed exchange rate protected its energy intensive industries, serving as a subsidy for export-oriented manufacturing industries (Wolf 2009). Other countries that would have grown their industrial sectors couldn't compete against China's deflated prices. So China has ended up with a lion's share of industrial production within its economic pie, subjecting itself to a sub-optimally large share of CO2 emissions and other industrial pollution.

China's carbon commitments: ambitious or lackadaisical?

To meet a targeted 40-45% reduction in carbon intensity by 2020, announced in November 2009 as China's pledge at global climate negotiations in Copenhagen that year, China's central government has recently forced the closure of inefficient factories and power plants, enforced planned blackouts, and launched other seemingly heavy handed steps to reduce the energy intensity of the national economy.

Despite these high-profile measures, analysts including Breakthrough Senior Fellow Roger Pielke Jr., have repeatedly warned that China's seemingly ambitious climate target really just amounts to continuing on a course of business-as-usual -- which would mean another decade of unprecedented emissions growth.

Messieurs Afsah and Salcito note that this latest evidence adds credence to such concerns. "Though impressive on paper," China's carbon intensity pledge "represents the status quo," the duo writes.

Between 2005 and 2008 China's average annual CO2 intensity reduction rate was 4.35%, according to co2scorecard.org's analysis. Simply continuing that BAU rate would see China's emissions shrink 45% in around 13 years - by 2018, or two years ahead of their pledged goal.

"Maintaining the 4.35% reduction rate would not require any additional effort on China's part," Afsah and Salcito write. But hitting their goal in 2020 instead of 2018 would mean China could even slack off a bit, requiring just a 3.9% annual reduction.

"China is not just setting itself up for a business-as-usual carbon intensity reduction plan; it has committed to a lazier plan, allowing its emissions to continue increasing for an extended period of time," write Afsah and Salcito (see graphic above).

A recipe for rebound?

Worse yet, China's primary focus on improving industrial energy efficiency as the key to meeting carbon intensity goals is almost perfectly designed to trigger rebounds in energy demand that erode or even negate climate gains from such measures.

As noted in Breakthrough Institute's February report, "Energy Emergence: Rebound and Backfire as Emergent Phenomena," energy efficiency measures lower the effective price of the services derived from fuel consumption -- heating, cooling, transportation, industrial processes, etc. -- thus triggering a rebound in demand for those services (see a FAQ on rebound effects here).

These "rebound effects" are likely to be particularly pronounced in both industrial sectors and in developing nations, like China, where demand for goods and services, including energy services, is far more elastic (responsive to changes in price), and where industrial productivity improvements are key drivers of economic growth. For every step forward taken through efficiency, rebounds in energy demand take China -- and the world -- one or more steps backwards away from climate mitigation goals.

Thus, increased efficiency, particularly in China's industrial sectors, will drive greater economic growth and energy use. The net effect: total CO2 emissions are likely to keep soaring, even as China meets its lackadaisical carbon intensity goals.

Breaking China's carbon dependence

Is there any way then to really break the link between China's soaring economic output and soaring emissions?

Pursuing China's current path of unambitious carbon intensity goals -- principally met with industrial efficiency efforts likely to trigger serious rebounds in energy demand -- looks like a recipe for continued disaster.

And while co2scorecard.org's Afsah and Salcito note that a halt to China's currency depreciation efforts and other economic policies designed to spur an exports and industrial manufacturing-fueled growth strategy would cool both emissions and economic growth rates, this analyst considers it unlikely that China will assent to policies that drive down carbon by simply slowing economic growth.

That leaves only one other real option then: de-link economic growth from carbon emissions by fueling China -- and the world -- with clean, affordable, and massively scalable energy technologies.

Unfortunately, the menu of technologies that meet all three of those criteria -- clean (e.g. zero or very low-carbon), cheap (e.g. relatively affordable compared to conventional fossil fuels), and massively scalable -- is still quite limited. Cleaner energy alternatives must continue to improve in price, performance, or both, to meet a 'China-sized' appetite for energy.

China, America, Europe and the rest of the world must rapidly accelerate the pace of improvement in a whole suite of clean energy technologies, from nuclear and solar alike to plug-in hybrid vehicles, energy storage, and advanced biofuels. And a whole set of next-generation energy technologies must cross the Valley of Death from laboratory to commercialization in the coming decades

On this point, a cadre of energy experts including analysts at the IEA, U.S. Energy Secretary Steven Chu, dozens of Nobel Laureates, high-profile American business leaders, and leading think tanks, are all united: we must make clean energy cheap, and fast.

China is already on a roaring path towards single-handedly swamping any hopes of climate stability, and success is far from assured.

The only thing that is certain is that the clock is ticking, and there's no time to waste in developing clean, cheap, scalable energy technologies to fuel both China and the world. The entire climate challenge hinges on our ability to do just that.

As the writer and environmental activist Bill McKibben is fond of saying, "You can't negotiate with the planet."

Bill's right of course. But as TIME magazine environmental correspondent Bryan Walsh observes, "it turns out you can't negotiate with the human desire for growth and development either--not in any political system on this planet. We need policies that provide us with the energy for both--or we may end up with neither."

Jesse Jenkins is the Director of Energy and Climate Policy at the Breakthrough Institute

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Webinar: China and Energy - Innovation, Competitiveness, and Meeting Soaring Demand

On Monday, I appeared on an hour-long webinar hosted by theEnergyCollective.com on China and Energy, diving into questions of energy innovation, competitiveness, and the challenge of meeting China's soaring demand.

Carolyn Bartholomew, a commissioner on the US-China Economic Security and Review Commission joined myself and moderator Marc Gunther to dive into the issues at stake.

We discussed how China can be both the world leader in clean and dirty energy, simultaneously leading the world in the production of clean energy technologies and global contributions to climate-destabilizing carbon dioxide and coal consumption; the economic stakes of the global clean energy race and China's rising prowess in clean tech innovation and production; and the huge scale of energy demand in the rapidly developing nation.

You can give a listen here.

See also: "Rising Tigers, Sleeping Giant" report on global clean tech competitiveness

A Clean Energy Competitiveness Strategy for America

Full Breakthrough Institute archives on Clean Energy Competitiveness

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China Energy Use to Soar, Driving Demand for Coal, Oil & Clean Energy Alike

China's demand for energy will soar 75% by 2035, according to the latest world energy forecast from the International Energy Agency (IEA), released Tuesday. The growing economic aspirations of 1.3 billion Chinese, who today use just one-third the amount of energy consumed by an average European or North American, will put pressure on global energy markets, driving demand for both clean and dirty energy alike.

Oil prices will rise to $113 per barrel (in constant 2009 dollars) by 2035, as oil producers struggle to keep pace with soaring global demand, according the IEA, the world's global energy watchdog, based in Paris.

Oil markets will remain tight through much of this period, the agency expects, writing that "short‐term price volatility is likely to remain high."

Much of the pressure on global energy markets will come from China, which will account for more than one-third of all global energy demand growth over the next 25 years, according to the IEA.

“Chinese energy demand will grow by such huge terms it will put pressure on the global energy markets in terms of oil, coal and, to a lesser extent, natural gas,” said Faith Birol, the IEA's chief economist, speaking to the New York Times.

Read the full post exclusively at theEnergyCollective.com

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China's Crash Program for Clean Energy

Originally posted at the Breakthrough Institute

In a forthcoming edition of the New Yorker, journalist Evan Osnos has written a great long essay on the role of the Chinese government in clean energy innovation in China.

Osnos documents how, beginning with the 863 program in 1986, Chinese government officials made a conscious effort to "join the new technological revolution" and make investments in science and technology a priority. Nowhere is this decision more evident today than in the rapid development of clean energy technology in China. In 2001, driven by increasing pollution and concerns over energy security, the Chinese government expanded their investment in energy technology. In 2006, the government expanded their commitment even further, and announced targets for the development of a suite of clean energy technologies:

"In 2006, Chinese leaders redoubled their commitment to new energy technology; they boosted funding for research and set targets for installing wind turbines, solar panels, hydroelectric dams, and other renewable sources of energy that were higher than goals in the United States. China doubled its wind-power capacity that year, then doubled it again the next year, and the year after. The country had virtually no solar industry in 2003; five years later, it was manufacturing more solar cells than any other country, winning customers from foreign companies that had invented the technology in the first place. As President Hu Jintao, a political heir of Deng Xiaoping, put it in October of this year, China must "seize preemptive opportunities in the new round of the global energy revolution."

China's 863 program was modeled in part after the American research system used by NIH and the Department of Defense, the latter of which was instrumental in making early investments in technology that enabled the personal computing and information technology revolutions. And Chinese government investments in research and development (R&D) have been rising dramatically each year:

"R. & D. expenditures have grown faster in China than in any other big country--climbing about twenty per cent each year for two decades, to seventy billion dollars last year. Investment in energy research under the 863 Program has grown far faster: between 1991 and 2005, the most recent year on record, the amount increased nearly fifty-fold."

At the same time, in America, investments in energy innovation were moving in the opposite direction--down:

"In America, things have gone differently. In April of 1977, President Jimmy Carter warned that the hunt for new energy sources, triggered by the second Arab oil embargo, would be the "moral equivalent of war." He nearly quadrupled public investment in energy research, and by the mid-nineteen-eighties the U.S. was the unchallenged leader in clean technology, manufacturing more than fifty per cent of the world's solar cells and installing ninety per cent of the wind power.

Ronald Reagan, however, campaigned on a pledge to abolish the Department of Energy, and, once in office, he reduced investment in research, beginning a slide that would continue for a quarter century. "We were working on a whole slate of very innovative and interesting technologies," Friedmann, of the Lawrence Livermore lab, said. "And, basically, when the price of oil dropped in 1986, we rolled up the carpet and said, 'This isn't interesting anymore.' " By 2006, according to the American Association for the Advancement of Science, the U.S. government was investing $1.4 billion a year--less than one-sixth the level at its peak, in 1979, with adjustments for inflation. (Federal spending on medical research, by contrast, nearly quadrupled during that time, to more than twenty-nine billion dollars.)"

Years of growing energy technology investment have enabled China to catch up with the rest of the world and even exert technological leadership in some clean tech industries, such as carbon capture and storage (CCS):

"When Albert Lin, an American energy entrepreneur on the board of Future Fuels, a Texas-based power-plant developer, set out to find a gasifier for a pioneering new plant that is designed to spew less greenhouse gas, he figured that he would buy one from G.E. or Shell. Then his engineers tested the Xi'an version. It was "the absolute best we've seen," Lin told me. (Lin said that the "secret sauce" in the Chinese design is a clever bit of engineering that recycles the heat created by the gasifier to convert yet more coal into gas.) His company licensed the Chinese design, marking one of the first instances of Chinese coal technology's coming to America. "Fifteen or twenty years ago, anyone you asked would have said that Western technologies in coal gasification were superior to anything in China," Lin said. "Now, I think, that claim is not true."

How do China's scientific advancements affect international efforts to deal with climate change? For all of China's advances, it is still a country with immense poverty and clean energy technologies are still much more expensive than their fossil-fuel equivalents. Until there are cheaper alternatives to coal or oil, solutions to climate change may prove elusive:

"As long as a Chinese citizen earns less than one-seventh what his counterpart in America earns, China is unlikely to back down on the demand that it should be paid to slow down its economy and invest even more in energy technology. And on that point the sides remain far apart."

China's technological advancements, as well as a recent uptick in U.S. energy research funding, may spell a way out of the impasse. Large investments in energy innovation to make clean energy cheap will be necessary to achieve long-term climate objectives and power sustainable global development. One cheap, clean technology that China has pioneered is the electric bike, which Chinese citizens have come to rely on for urban transportation. Osnos ends his piece by describing the simplicity of this new clean tech innovation:

"And yet, for all its imperfections, the Turtle King [e-bike] was so much more practical than sitting in a stopped taxi or crowding onto a Beijing bus that it had become what all new-energy technology is somehow supposed to be: cheap, simple, and unobtrusive enough so that using it is no longer a matter of sacrifice but one of self-interest."

The whole article is well worth a read, and can be accessed here.

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Is the Silicon Valley of Clean Energy Growing in China?

How Baoding, China became the world's first "carbon positive" city.

(by Tyler Burton, crossposted from The Breakthrough Blog)

100 miles southwest of Beijing, a green revolution is underway; and it began, as Peter Ford of the Christian Science Monitor reports, with a "bad case of smelly fish".

Yu Qun (pictured) had only recently been elected mayor of Baoding, China when fish in the region's largest lake began to die by the thousands. In his mind, this could only be the direct result of pollution from the several hundred factories which lined the river's banks. So Mr. Yu took a drastic but, in the long run, incredibly fortuitous step: he closed the factories.

This move cost his city large points at first with the Central Government. His annual economic growth was down almost two percentage points; but Mr. Yu had a plan:

"Polluting first and cleaning up later is very expensive," says the boyish-looking mayor, a former college math teacher. "So we chose renewable energy to replace traditional industry."

In three years, Yu has transformed Baoding from an automobile and textile town into the fastest-growing hub of solar, wind, and biomass energy-equipmentmakers in China. Baoding now has the highest growth rate of any city in Hebei Province. Its "Electricity Valley" industrial cluster - consciously modeled on Silicon Valley - has quadrupled its business.

Of course, Mr. Yu met large resistance at first. Many officials in the provincial and central governments thought he was "impractical", that "renewable energy was 30 or 40 years away..." (Sound familiar?) But Yu persisted, and his persistence paid off.

Such has been the success of his perseverance, and of the advantages that Baoding offered new "green-tech" investors, that the city now houses nearly 200 renewable energy companies. One of them makes blades for wind farms in Texas. Another is providing the solar panels for the largest solar power station in the world, in Portugal.

"New energy has become a pillar industry in our city," the mayor says. Within two years, he forecasts, it will have overtaken the auto and textile sectors as the most important mainstay of the local economy.

And what's good for Baoding may be good for the world. By one reckoning, the city is the world's first to go "carbon positive": The carbon saved annually worldwide through the use of equipment made here outweighs the city's own emissions.

As America struggles to retool its aging manufacturing sector, perhaps one city's success at sloughing off its own burden of pollution can offer inspiration. A word to city planners far and wide: we might do well to look towards our own pragmatic Mr. Yu's. If we dare to make bold choices with a slant towards the future, what can we accomplish in 3 years?

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U.S. Business Leaders Urge America to Get Serious about the Clean Energy Race

By Leigh Ewbank, originally posted at the Breakthrough Institute

In Monday's Washington Post, prominent U.S. business leaders John Doerr (from Kleiner Perkins, pictured left) and Jeff Immelt (CEO of GE) joined the growing chorus calling on the nation's leaders to prepare America for the clean-energy race. They warn that the U.S. is quickly falling behind in "the next great global industry" -- green technology -- with the risk of damaging America's economic competitiveness.

Doerr and Immelt's observations mirror recent reporting by the Breakthrough Institute and several major news sources -- including Time, Washington Post, and the Wall Street Journal -- that show the U.S. trailing Asia in terms of clean-energy investment and deployment. On the question of which nation is leading the U.S. in the clean-energy race, Doerr and Immelt don't mince their words:

"We are clearly not in the lead today. That position is held by China, which understands the importance of controlling its energy future. China's commitment to developing clean energy technologies and markets is breathtaking.

Consider: Chinese cars are more than one-third more fuel-efficient than U.S. cars. China is investing 10 times as much on clean power, as a percentage of gross domestic product, as the United States is. China is on track to create 150,000 jobs through the deployment of 120 gigawatts of wind power by 2020 -- an amount equivalent to today's global total and nearly five times America's."

China is not alone with its clean energy ambitions. As Breakthrough has noted previously and highlighted last week in a San Francisco Chronicle op-ed, South Korea will invest $85 billion over five years--2% of its GDP per year--in environmental technologies that include clean energy, hybrid electric vehicles, and energy efficient products. Japan will join these nations through setting a large solar deployment targets with the objective of becoming "the number one solar power in the world."

China, South Korea and Japan's drive to become the main players in clean-tech markets along with the inaction of US policy makers has serious implications for U.S. competitiveness. For Doerr and Immelt, "There is no topic of greater importance to America's economic future." However, they argue that "our government's energy and climate policies are our principal obstacle to success. Today's policies stifle American innovation and competitiveness."

The gathering clean energy race demands a bold national strategy for clean energy development to compete effectively with nations like China. Doerr and Immelt present several policy recommendations, including major federal investments similar to Breakthrough Institute's proposals:

"Get serious about funding research, development and deployment, at scale. The federal government currently spends only $2.5 billion on clean-energy R&D a year -- 0.25 percent of our annual energy bill. Sen. Jeff Bingaman's Clean Energy Deployment Administration is a good idea that would be fast and flexible. But more such programs are needed."

Doerr and Immelt's recommendation is consistent with our calls for a national clean energy strategy with major investments in clean energy research, development, demonstration and deployment -- though we would argue that these measures should be our highest priority if we aim to win the clean energy race (Doeer and Immelt list it as their fourth recommendation). Such investments should be coupled with measures to promote America's clean-tech workforce through education initiatives, including President Obama's RE-ENERGYSE program recently rejected by Congress. The combination of skills development and public investment can drive the innovation and entrepreneurship needed to catapult the US to a leadership position.

While the current trends suggest that Asia could dominate the burgeoning clean energy industries of the 21st century, there is still hope. As more and more notable figures like Doerr and Immelt join those already highlighting the significance of clean-energy race for our economic competitiveness, the Congress will eventually be compelled to act. For the sake of our climate and our economy, let it be sooner rather than later -- as Teryn Norris and Jesse Jenkins concluded in their SF Chronicle op-ed:

"If America does not take immediate action to bridge its energy education gap -- and if we fail to make substantially larger investments in our own clean-energy economy -- we will effectively cede the clean-energy race to Asia. A decade from now, we may still find the burgeoning clean-energy economy promised by Obama and Democratic leaders. It will simply be headquartered in China."

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Over the last few months, the Breakthrough Institute has been chronicling the clean energy race. You can find the archives here.

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Washington Post: Asia's Clean Tech Tigers Surging Ahead in Clean Energy Race

By Yael Borofsky. Originally posted at the Breakthrough Institute

As Congress debates the Waxman-Markey climate bill, Asia is moving rapidly to win the clean energy race. So warns a new article in the Washington Post today that should serve as a wake-up call to America’s leadership at the highest level.

The new investigative article by Steven Mufson, entitled “Asian Nations Could Outpace U.S. in Developing Clean Energy,” confirms increasingly urgent warnings issued by many, including the Breakthrough Institute, that the United States must dramatically increase direct investments in a clean energy technology push, or be quickly left behind by China, South Korea, India, Japan and others.

Despite Obama’s intentions to increase America’s international competitiveness, the article reports that the amount and scale of investments in renewable energy programs coupled with ambitious renewable energy use targets are putting these Asian nations on pace to surpass programs set forth by both the U.S. economic stimulus package and the American Clean Energy and Security Act, the massive climate and energy bill recently passed by the U.S. House of Representatives.

Citing the Breakthrough Institute’s Jesse Jenkins, the article warns:

"If the Waxman-Markey climate bill is the United States' entry into the clean energy race, we'll be left in the dust by Asia's clean-tech tigers," said Jesse Jenkins, director of energy and climate policy at the Breakthrough Institute, an Oakland, Calif.-based think tank that favors massive government spending to address global warming.

Much of the G8 climate discussions last week were stymied by China and India’s outright refusal to accept an international (or any) ceiling on greenhouse gas emissions. Meanwhile, the Washington Post reports, both countries, as well as South Korea, are forging ahead with dramatic steps to ramp up their renewable industries in ways that will reduce their emissions while flexing their strengthening clean-tech R&D muscles.

The full article can be read below...

Asian Nations Could Outpace U.S. in Developing Clean Energy
American Markets' Slump Feeds Worry
By Steven Mufson, Washington Post Staff Writer
Thursday, July 16, 2009

President Obama has often described his push to fund "clean" energy technology as key to America's drive for international competitiveness as well as a way to combat climate change.

"There's no longer a question about whether the jobs and the industries of the 21st century will be centered around clean, renewable energy," he said on June 25. "The only question is: Which country will create these jobs and these industries? And I want that answer to be the United States of America."

But the leaders of India, South Korea, China and Japan may have different answers. Those Asian nations are pouring money into renewable energy industries, funding research and development and setting ambitious targets for renewable energy use. These plans could outpace the programs in Obama's economic stimulus package or in the House climate bill sponsored by Reps. Henry A. Waxman (D-Calif.) and Edward J. Markey (D-Mass.).

"If the Waxman-Markey climate bill is the United States' entry into the clean energy race, we'll be left in the dust by Asia's clean-tech tigers," said Jesse Jenkins, director of energy and climate policy at the Breakthrough Institute, an Oakland, Calif.-based think tank that favors massive government spending to address global warming.

Energy Secretary Steven Chu and Commerce Secretary Gary Locke are visiting China this week to discuss cooperation on energy efficiency, renewable energy and climate change. But even though developing nations refused to agree to an international ceiling for greenhouse gases last week, China and other Asian nations are already devoting more attention to cutting their use of traditional fossil fuels such as oil, natural gas and coal.

South Korea recently said it plans to invest about 2 percent of its GDP annually in environment-related and renewable energy industries over the next five years, for a total of $84.5 billion. The government said it would try to boost South Korea's international market share of "green technology" products to 8 percent by expanding research and development spending and strengthening industries such as those that produce light-emitting diodes, solar batteries and hybrid cars.

China and India are kick-starting their solar industries. India aims to install 20 gigawatts of solar power by 2020, more than three times as much as the photovoltaic solar power installed by the entire world last year, the industry's best year ever. And China's new stimulus plan raises the nation's 2020 target for solar power from 1.8 gigawatts to 20 gigawatts. (A gigawatt is about what a new nuclear power plant might generate.)

"China is trying to catch up in a global race to find alternatives to fossil fuels," the official China Daily said in an article last week.

"A lot of people underestimate how focused China is on becoming a global leader in clean technology," said Brian Fan, senior director of research at the Cleantech Group, a market research firm. China now provides a $3-a-watt subsidy upfront for solar projects, he said, enough to cover about half the capital cost. Fan said it is "the most generous subsidy in the world" for solar power.

China is also expected to boost its long-term wind requirement to 150 gigawatts, up from the current 100 gigawatt target, by 2020, industry sources said. Jenkins said China could provide $44 billion to $66 billion for wind, solar, plug-in hybrid vehicles and other projects. Fan said China also plans to make sure that many of the orders go to its own firms, Gold Wind and Sinovel.

The big Asian research and investment initiatives come as U.S. policy makers boast about their own plans, giving ammunition to those who say this country needs to do more.

"That R&D represents America's chance to become the world's leader in the most important emerging economic sector: energy technology," said House Majority Leader Steny H. Hoyer (D-Md.) in a May 13 speech to the U.S. Chamber of Commerce. "In the years to come, I hope that America will be selling clean technology to China and India and not the other way around."

Confident that the United States will develop top-notch technology, the House voted overwhelmingly on June 10 to oppose any global climate change treaty that weakens the intellectual property rights of American green technology.

"We can cede the race for the 21st century, or we can embrace the reality that our competitors already have: The nation that leads the world in creating a new clean energy economy will be the nation that leads the 21st century global economy," Obama said on June 29.

But countries in Asia are not standing still waiting for U.S. advances.

That both excites and worries U.S. manufacturers torn between opportunity and fear of a boost for Asian competitors at a time when the world's biggest market, the United States, has slowed down sharply. "This is heavy manufacturing business. The U.S. has had a great position over the last several years," said Vic Abate, vice president of renewables at General Electric, the world's number two wind turbine company. "If it slows down and if investment doubles down in China, it will be a lot harder to catch up."

"We have already been left behind in some areas," said Mark Levine, director of the environmental energy technologies division at Lawrence Berkeley National Laboratory. "But . . . there remain many opportunities," he said, adding that "the U.S. can carve out key areas in clean energy technology."

Although GE is the only U.S. company among the world's top 10 wind turbine makers (China has two, Germany has three), Levine said "there are areas in wind energy where we are likely to develop crucial technologies that we will both exploit and likely license to others." He cited advanced materials that would permit stronger rotors and techniques for taking advantage of higher wind speeds at greater heights.

Levine said the United States is unlikely to "become the or even a leading photovoltaic manufacturer. But our scientific talent . . . has a good chance of developing the next-generation PV systems which we could either manufacture in China or another country . . . or license to foreign companies. . . . Even if the manufacturing is done abroad, this will lead to very real and large benefits to the U.S. from licensing fees, not to say sales in the U.S. and elsewhere."

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China's Big Plan to Win the Clean Energy Race

By Johanna Peace with Leigh Ewbank and Devon Swezey. Originally posted at Breakthrough Generation

Historically, the United States has been the nation with the capacity and determination for large-scale investments in promising new technologies--but not this time. Now it’s China’s turn. In the coming weeks, China will unveil an unprecedented multi-billion dollar investment in renewable energy.

The details are sketchy, but China is reportedly developing a massive renewable energy investment plan. While little is known about the precise level of expenditure the Chinese will commit to research, development and deployment (RD&D), if it’s anywhere between the US $440-660 billion over ten years reported by AFP and the Center for American Progress then it’ll be an unprecedented investment in the new energy economy.

What Do We Know About China's Investment Plan?

A Chinese Energy Administration official has confirmed that the investments will number at least $440 billion over 10 years. However, there is still uncertainty about the range of investments and the date when the Chinese Government’s renewable energy plan will be revealed. A report by the state-run news service Xinhua identified China's top economic planning body, the National Development and Reform Commission, as responsible for drafting and implementing the plan. According to Shi Dinghuan of the Chinese Academy of Sciences, NDRC has already produced a draft of the renewable energy stimulus, though Breakthrough research has turned up no publicly available copy.

Meeting Ambitious Targets for Renewables

The money from this new renewable stimulus package will undoubtedly help China meet its ambitious goals for the deployment of clean energy technologies. Last month, NDRC vice-chairman Zhang Xiaoqiang said that China would easily meet its renewable energy standard (RES) of 15% by 2020, a target set by the Renewable Energy law of 2006. He predicted that China's renewable capacity could reach as high as 20% by that time.

On technology-specific targets, too, China is plowing ahead of schedule. Estimates say that China's installed capacity of wind power by 2020 could easily triple the previous target of 30 GW. Meanwhile, a recent Chinese announcement said the nation would surpass its previous 2020 goal of 1.8 GW solar PV power as early as 2011, on the way to a dramatically higher new target of 20 GW by 2020.

Investments Currently Underway

When details are released, the massive $440-660 billion spending package will come in addition to substantial existing investment in renewables by the Chinese government. According to The Climate Group, China invested $12 billion in renewable energy in 2007--second only to Germany.

On its way to blowing past previous wind energy targets, China will begin construction this month on its biggest wind power station yet. The "Three Gorges of Wind Power" development, valued at US $17.6 billion, will generate 20 GW of power by 2020. The government is also considering enhancing deployment incentives already in place to encourage the growth of the Chinese domestic solar market.

Looking Ahead

The US is yet to respond to China’s expanding lead in renewable energy investment.

While climate change advocates like Al Gore hail the Waxman-Markey bill as a display of leadership, the bill fails to provide sufficient investments in renewable R&D and increase deployment above business-as-usual scenarios. Breakthrough Institute analysis shows that "the House climate legislation would invest just $800 million to 1.4 billion in R&D" with "total investments in clean energy… likely to be just $6-9 billion annually between 2012-2025."

Not only does the scale of US investment pale in comparison to China’s proposed US $44-66 billion per year, it also falls short of the investments that energy experts recommend to spur innovation to meet the climate and energy challenge. It's time for America to join the race.

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China and India Launch New Solar Energy Projects

By Johanna Peace. Originally posted at Breakthrough Generation

While the US mires itself in controversy over the weakened cap-and-trade bill working its way through Congress, China and India have begun to look ahead with new government investment policies that rapidly expand solar power capacity in each country.

China recently announced a dramatic increase in its expected solar capacity target for 2011, planning to reach 2 GW within the next two years. Already, China's new renewable energy stimulus plan has expanded the nation's 2020 target from 1.8 GW to 20 GW--that's more than triple the amount of PV solar power installed in the entire world during 2008, the industry's best year ever.

The higher targets will be met by enhancing government subsidies and other deployment incentives, which currently stand at US $2.93/watt capacity for roof-mounted systems greater than 50 kW. Government officials have suggested that the current US $.16 per kWH feed-in tariff for ground-mounted PV systems may be adjusted in order to make solar power production profitable.

Last month, India also signaled that it sees solar as a crucial component of a future clean energy economy, when its New and Renewable Energy Committee announced a massive National Solar Mission. In what one Greenpeace India representative called "the most ambitious solar plan that any country has laid out so far," the National Solar Mission matches China by setting a new target of 20 GW solar capacity by 2020. What's more, India estimates that the plan could bring the now-prohibitive cost of solar down to US $.08-.10 per kWh by 2017-2020, making it cost-competitive with fossil fuels.

The cost of building rooftop systems and increasing local manufacturing capacity on the scale India has proposed would run about $20 billion over 30 years, economists say. India's solar plan will meet this cost by levying taxes on gasoline and diesel, as well as implementing other measures like a feed-in tariff, solar power purchase obligations, tax breaks for manufacturers, exemptions on tariffs for imported equipment, and a national renewable energy standard that mandates a certain percentage of India's power be generated from solar.

One part of the plan in particular has been making headlines: the provision that the Indian government will provide $100 billion in subsidies over 20 years to utilities for buying solar-generated power.

There are two lessons for the US as developing Asian economies continue to expand solar capacity. First, it's a clear opportunity for American investment. The Indian government will likely need help from developed countries to finance its huge subsidies plan; through US government investment and foreign direct investment in solar power plants, the US stands to profit while also contributing to India's clean development and the reduction of global GHG emissions. Such a mutually beneficial arrangement could be a focal point for a productive treaty between developed and developing nations in Copenhagen.

Second, in addition to facilitating international cooperation, the solar push by Asian nations should spark a sense of competitiveness for US domestic energy policy. Direct government investment in solar R&D, as well as subsidies and incentives for deployment of solar energy, could put the US in step with India and China as leaders in the deployment of this vital renewable energy technology. Despite a steadily growing solar PV industry with a current capacity of about 9000 mW, the US needs more solar deployment, and we need it to happen fast. China and India have shown us a model of how to do it.

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With $17.6b Project, China Surges Forward on Wind

By Johanna Peace. Originally posted at Breakthrough Generation

China's massive public investments in wind and other renewable energy technologies are edging the rapidly developing nation into the lead in the global clean energy race.

By mid-July, China will begin construction of a massive wind farm project in the northwestern Gansu province, at a total cost of US $17.6 billion. It will be China's biggest wind power station yet; according to local Development and Reform Commission official Wu Shengxue, it will reach an installed capacity of 20 GW by 2020. Eventually, the wind power capacity of the area is projected to reach 40 GW.

This development is the latest in what has recently been a major push by the Chinese to expand renewable energy use. Soon, Chinese officials are expected to reveal a new renewable energy stimulus plan of US $44-$66 billion per year over ten years, which will focus much of its resources on wind power. Under the plan, China will be on track to reach 100 GW of wind power capacity by 2020--more than eight times its current level.

By contrast, the American Clean Energy and Security Act invests only $6-12 billion per year in clean energy. As for the US "green stimulus," it includes a one-time clean energy spending boost of $112 billion--just half of China's $221 billion stimulus investment in green initiatives. Here's a sense of scale: If US investments in clean energy were on par with the Chinese in terms of percent GDP, we'd be spending $140-210 billion per year.

Right now, the US maintains an edge in wind power, with about 25 GW of installed capacity to China's 12 GW. But China has been at least doubling its wind power capacity each year for four years, and last year, China was second only to the US in added capacity.

Clearly, China is positioning itself to pull ahead as a leader in wind power and other renewable energy technologies. The major reason is a government commitment to substantial and sustained clean energy investment. The US needs to take note of this model, or watch its already razor-thin edge in clean energy tech getting thinner every day.

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Sec. of State Clinton and Obama Climate Envoy Discuss U.S.-China Clean Energy Collaboration

At a public event at an efficient co-generation power plant in China, Secretary of State Hillary Clinton and Obama Climate Envoy Todd Stern both discuss the importance of partnership and collaboration to develop and deploy clean, cheap energy technologies to power sustainable development in China.

Are these the first signs of a new Obama Administration strategy for U.S.-China engagement on climate change? Are Clinton and Stern preparing to embark on a strategy focused explicitly on harnessing the best and brightest researchers, entrepreneurs and businesses and leveraging major investments on both sides of the Pacific to develop and deploy clean, cheap and scalable energy sources?

I'll be writing more about this tomorrow, but for now, the full transcript of their remarks are below. I'm interested in your reaction to these remarks and your thoughts on how the United States and the Obama Administration should engage China to ensure a climate stability and to help drive sustainable development in China?

Dialogue on U.S.-China Partnership on Clean Energy
Monday, 23 February 2009, 2:22 pm
Press Release: US State Department

Hillary Rodham Clinton, Secretary of State
With Special Envoy for Climate Change Todd Stern And President of GE Energy China Jack Wen
Taiyang Gong Power Plant, Beijing, China
February 21, 2009

MR. WEN: Good afternoon, everybody. Welcome to our dialogue on U.S.-China partnership on clean energy. I am Jack Wen, business leader for GE Energy in China.

Madame Secretary, as a company formed by Thomas Edison 130 years ago in your home state, New York, and also headquartered in Schenectady for renewable energy, GE is very honored to be part of your first trip to China as Secretary of State.

And also, GE has been working in China for the past 100 years, and we also view China as our other home.

And also, we are very delighted that Secretary of State, in her dedication, visits the power plant today. And this project really leads the industry in demonstrating advanced technology, maximized efficiency, and also minimized environmental impact. And GE is very proud to be able to participate in this project by providing our high-efficiency gas turbine equipment and technology. And this is another great example of U.S.-China cooperation and friendship.

And now, let me introduce Todd Stern. He is the U.S. President's personal representative, the Secretary of State's Special Envoy on Climate Change. He is holding a critical role, in terms of driving U.S. international policy on climate change.

So, with that, Mr. Stern. (Applause.)

MR. STERN: Thank you very, very much. Thank you, Jack. I am delighted to be here. I want to give special thanks to not only Jack, but to Mike Norbom of GE, and Wang Yongliang and (inaudible) who run this plant.

I am very pleased to be here in China on my first trip as the administration’s Special Envoy for Climate Change, and I am delighted to be joined by all of you here: students and researchers, faculty from Tsinghua University’s clean energy research and education center, and Tsinghua’s Institute of Energy and Environment Economics.

And I am extremely impressed by this plant. This is exactly the kind of thing that the United States and China have to do together. It is, as you know, a co-generation lifecycle plant. It not only produces electricity, but captures the heat that would otherwise be lost, and heats a million homes in Beijing, including the U.S. embassy. So, we are delighted about that. And it produces only half the emissions of an ordinary coal plant.

This is the kind of thing that we need to do more of. It is creative, it is effective, and it is profitable. And in an age where we are producing, through the use of coal and oil, greenhouse gases that are endangering us all, this is exactly what we need to do.

Climate change is an epic challenge. Scientists have been warning us about this threat for many years. And mounting evidence suggests that, if anything, scientists have underestimated the seriousness of the threat, not the other way around. In our view, nothing is more important for dealing with this threat than a U.S.-China partnership turning their full attention to it. Together, we produce about 40 percent of worldwide emissions, but together we can do great things.

Now, the United States recognizes its responsibility, as the world's largest historic emitter of greenhouse gases, to be a leader in this fight. And we also recognize that China has enormous challenges, in terms of development, development needs and development pressures.

And yet, this is true. There is no way to preserve a safe and livable planet unless China plays a very important role, along with the United States. This is not a matter of politics or morality or right or wrong. It is simply the unforgiving math of accumulated emissions.

But if climate change amounts to a daunting challenge, it also presents enormous opportunity. The only way to address climate change, fundamentally, is to transform the global economy from a high to a low-carbon base, and that presents great economic opportunity. In our view, building a clean energy economy is not only something we can do consistent with economic growth, it is exactly what we need to do right now to build an economy that can compete, not only today, but tomorrow.

And let me say don't believe people who tell you that we can't do this now, that we have to go slow, that we need to wait until this economic crisis is over. The economic crisis is all the more reason why we need to act now. And in the United States, President Obama, in his stimulus plan that was just signed into law, included a major down-payment for clean energy to drive this movement forward in the United States.

China has already taken many important steps. You released an impressive white paper last October. It went through many of the steps that China is taking already. But more needs to be done, and the United States and China can do more together. We can learn from each other. We can engage in joint research and development. We can collaborate on projects involving renewable energy, efficiency in buildings, and the capture and storage of CO2 from coal plants. We can mobilize large-scale investment, and share technology, and we can discover the new technologies that will build a safer and more sustainable future.

I have worked for two Presidents, one also named Clinton, by the way, who liked to say about hard things, "We can do this." And our new President, President Obama, likes to say about hard things, "Yes, we can." If China and the United States make common cause on building a low carbon world and put our collective talent, know-how, and inspiration to the task, we will get this job done.

Thank you very much. And I would like to now introduce the principal speaker at this little session, somebody who it's been a great privilege and honor for me to travel with on my first trip, the Secretary of State, who, along with President Obama, is bringing a broader, more collaborative approach to American foreign policy generally, as well as an intensive new commitment to the issues of clean energy and global climate change. Ladies and gentlemen, the Secretary of State of the United States Hillary Clinton. (Applause.)

SECRETARY CLINTON: Well, I am delighted be here this afternoon. This is an extraordinary opportunity to see in action what I discussed this morning in my meeting with Foreign Minister Yang, and then with State Councilor Dai. And when I leave here, I will be meeting with other officials of the Chinese government, and I am particularly pleased that I have a chance to see some of the young people who are going to be making the difference in the future.

I want to thank Mr. Norbom and Mr. Wen. I want to thank Mr. Qiu Ming and Mr. Wang Yongliang and (inaudible) for having us here, and for what you're doing here. That is more important than our visit, by many, many degrees. This represents such a wonderful collaboration. And, as Todd Stern, our Obama administration climate change envoy said, we need to figure out ways to do more and more of this.

In our discussions this morning with Foreign Minister Yang, we agreed in principle to a strategic and economic dialogue between our countries, which will be finalized when our two presidents meet together in London around the G-20 summit. And among the most important issues that we will discuss together is clean energy and climate change, and what the United States and China can do together. And there will be a big role for universities, and faculties, and researchers, and scientists, and technicians, and business people, and government officials, all together.

When, 30 years ago this year, the United States and China established diplomatic relations. We weren't thinking at that time about climate change. There were other pressing global issues that we began to listen to one another, and talk together, and try to understand.

But today, we know that climate change and clean energy are two of the biggest challenges our countries and the world face. This cooperative clean energy venture here, at this power plant, acknowledges an inescapable fact, that the interdependent world in which we live requires us to find new ways to collaborate and cooperate in the face of unprecedented global challenges and untapped global opportunities.

Now, addressing climate change and promoting clean energy is not only a global environmental issue. It is a health issue. It is an economic issue. It is a security issue. And we have to look at it all together in that comprehensive way. And I know that the partnership we see here today can bear so much fruit.

General Electric has provided high-tech equipment to produce heat and power with half the emissions, and far less water usage than the coal plants that we typically rely on. And Chinese businesses build the steam turbines that help to power the plant. So it is a true collaboration.

There are a number of partnerships currently underway between our countries, and it's not only at the national level, but business-to-business, business-to-municipality, and even this one, which is particularly impressive: California has partnered with the province of Jiangsu, where Chinese officials have found that, by replacing aging motors in factories and adopting more efficient responses, they can eliminate the need for more than two dozen coal-fired plants with no added cost.

In addition to the cooperative efforts that are linking states and provinces, cities in China and the United States are finding the economic and environmental benefits very attractive when they collaborate on clean energy.

So, what we're seeing here is the kind of in-depth partnership that we want to encourage. I decided to come to Asia on my first trip as Secretary of State, because I think that the opportunities for us to work together are unmatched, anywhere in the world. We take very seriously in the Obama administration, the issue of climate change. And we are going to be taking strong action to lower carbon emissions dramatically, and develop alternative sources of energy. The stimulus package of $790 billion that President Obama just signed includes extensive new investments in clean energy.

And similarly, here in China, your government is recognizing the importance of developing smarter and more sustainable policies for growth.

Now, historically, as you know, the United States had the largest carbon footprint. But in the last year, China has surpassed us, and that is because of your growth. And I laugh with some of your officials. The United States, and certainly the Obama administration, we want China to grow. We want the Chinese people to have a very good standard of living. What we hope is that you won't make the same mistakes we made, because I don't think either China or the world can afford that.

We were industrializing and growing. We didn't know any better. Neither did Europe. Now we are smart enough to figure out how to have the right kind of growth, sustainable growth, and clean energy-driven growth. This plant can be a model that can be adapted and replicated throughout our economies. And I think it is especially fitting that, as part of this new strategic and economic dialogue that we have agreed to in principle, clean energy and climate change will be at the center. Here we have seen, at this clean thermal plant, evidence of what we can do.

Our new energy secretary, Secretary Steven Chu, a famous scientist in the United States, is devoted to putting his extraordinary intelligence to work on behalf of clean energy. And I talked with him before I came on this trip, and he said he wanted to explore ways between universities in the United States and universities in China, where we can jointly develop intellectual property, where we can jointly come up with new technologies. That is the level of partnership we want, where we can each benefit from the fruit of our labor and our intellectual investment.

So, we have come a long way in the last 30 years, since we formalized relations. We will have many issues to discuss between our two countries. We will not always agree. No two people always agree. Two great countries like ours will not always agree. But we do believe that we can agree and work together on what is one of the most important issues that has ever, ever faced humanity. And I look out and see these bright young people, and I know that your future depends upon the decisions that we will make now.

I heard a Chinese proverb recently that says, "Dig the well before you are thirsty." I love Chinese proverbs. (Laughter.)

The 21st century is testing us to determine whether we are smart enough to follow that advice. I think we are. And I know that we are going to do everything we can in the Obama administration to pass out a lot of shovels so we can dig a lot of wells so we can take care of all the thirst that is out there for a new future, a future of tremendous opportunity.

You know, in every generation, people are called upon to make difficult decisions. I remember very well in the late 1970s my husband was the governor of a small state, Arkansas. And President Carter invited us to meet Deng Xiaoping when he came to the United States. And I remember meeting that great leader, who began the 30-year march that China has demonstrated is able to create a thriving, dynamic, economic, and social miracle.

And so, now we have to take the next 30 years, and make our mark. And this is the area where I am most optimistic. So I will leave China tomorrow, encouraged by the possibilities of what a stronger relationship can mean for the Chinese and American people, for our economies, for our security, for our health, for our education, for our energy profile, but most importantly for your futures.

That, to me, is what politics is supposed to be about. Are people better off when you end than when you started? Are people's lives more possible, filled with potential, or not? And I think we have such a tremendous opportunity ahead of us, and I look forward to playing a small role on behalf of my nation, with all of you here in China.

Thank you very much. (Applause.)

ENDS

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China's Greenhouse Gas Emissions Could Double in Coming Decade

Cross-posted from the Breakthrough Institute

China's greenhouse gas emissions could more than double by 2020, according to a new report released by the Chinese Academy of Sciences.

Beijing has been reluctant to release official data on greenhouse gas from the nation's fast-growing use of coal, oil and gas. This new study from the state-run institute breaks that reticence and sends another clear reminder that China is where our quest for climate stability will be won or lost.

"To a significant degree, our planet's energy and environmental future is now being written in China," says the study's authors. And the only way that story has a happy ending is if China has access to clean and cheap energy sources to power its sustainable development.

According to Reuters:

By 2020, China's burning of fossil fuels could annually emit carbon dioxide equal in mass to 2.5 billion metric tonnes of pure carbon and up to 2.9 billion tonnes, depending on varying scenarios for development and technology, the new report states. By 2030, those annual emissions may reach 3.1 billion tonnes a year and up to 4.0 billion tonnes.

That compares to current total global emissions of about 8.5 billion metric tonnes of carbon per year. The United States emitted roughly 1.6 billion metric tonnes in 2007, according to Oak Ridge National Lab.

The net total of natural sinks for carbon is estimated at around 2 billion metric tons of carbon per year. That means if we hope to reach climate stability at any level of atmospheric concentration of CO2, net global human-caused emissions must fall below that level. Returning to lower concentrations of CO2, as US climate scientist James Hansen and others have called for, would require global emissions to fall far below the level of natural sinks, calling for at least an 80% cut in global emissions from today's levels by mid-century.

Needless to say, if a single nation alone emits far more than that amount in the coming decades, climate stability of any kind will be impossible.

The only solution is to develop clean and cheap energy sources that can power sustainable development in China and elsewhere.

China has routinely stated that it will not sacrifice economic development to pursue greenhouse gas emissions reductions. "[R]elative to reducing carbon dioxide emissions, economic development is even more important," the study says, re-iterating that sentiment.

China is not alone in seeing potential trade-offs between climate goals and economic development -- or in having a clear and consistent position about which is the priority in case of conflict. India, Brazil and other rapidly developing nations frequently express this sentiment, arguing that developed nations enjoyed over a century of unbridled carbon emissions and therefore bear the responsibility for cutting emissions. And with developed nations gripped by economic recession, we're seeing priorities in the EU, Canada and the US shift towards the economy side of the economy-environment axis.

So long as this trade-off exists - in reality, or as a strongly-held belief in the hearts or minds of decision makers across the planet - we have little hope of stabilizing our warming climate.

The only way out of this predicament is to up-end the trade-off itself by focusing on the development of clean and cheap energy sources. China, India, Brazil, and even the developed nations of the world need access to energy sources to secure their economic future, and the global community must do whatever we can to ensure they have access to affordable energy sources that do not imperil our ecological future. That challenge is primarily a technological innovation challenge, one that has, to date, been given short shrift by the assembled nations of the Kyoto Protocol and it's successor treaty, currently under development.

As Reuters points out:

The [new] study may add to contention over China's response to global warming at a time of accelerating international negotiations. Beijing will be at the heart of efforts to forge a treaty next year to succeed the first phase of the Kyoto Protocol, which expires at the end of 2012.

If the international climate negotiations hinge on efforts to badger China into agreeing to limit their emissions with little focus on the need to develop clean and cheap energy sources, we should expect to "win," at best, hollow promises from the Chinese government. If instead, the international community comes together to pool resources, spur innovation, and foster the development and deployment of affordable clean energy sources across the world, we may yet have reason for hope.

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Electrify China: Street Smarts, or How I Learned to Stop Worrying and Love China

By Genevieve Bennett, Breakthrough Generation Fellow

This post is part of our week-long Special Issue exploring ways to sever the link between transportation and oil by electrifying transportation. Stay tuned for more...

There may be a pretty mournful tune coming out of Detroit these days, but over in China, everyone's gone car-crazy. Consider this: in 2000, the private vehicle stock numbered about ten million automobiles. A McKinsey report out in June projects that ten million cars will be sold in 2008 alone. China is now the second-largest automobile market in the world after the U.S.

China's romance with the automobile is reminiscent of America's back in the mid-twentieth century: a personal car means comfort, convenience, and tangible proof of newfound wealth to the millions of Chinese entering the ranks of the middle class (the New York Times ran a piece on this phenomenon back in April). The big difference is that China's car culture is coming of age in a post-cheap oil world.

Two weeks ago the Chinese government hiked gasoline prices (which the state sets) by 16 per cent, as the global price of oil continues to hover around record levels. A gallon of subsidized gas now costs around $3.83 in China. If this sounds pretty good to you, note that the GDP per capita there is about $2,000 a year.

And of course, as we know all too well, more cars on the road can mean spiraling pollution and deepening dependence on fossil fuels. China's appetite for oil has already led its government to rub shoulders with such unsavory partners as Sudan. Pollution in China is a horrific problem. The IEA has projected that there will be seven times as many cars on the road in 2030 as there are today. Even given that China's fuel standards are way higher than our own, that's still a lot of oil and pollution.

Now, we can lament this trend - and many have. Or we can think about ways in which it presents opportunities. China might be a great candidate for leapfrogging technologies - that is, skipping over intermediate generations of technology and moving directly to the cutting edge. The rapid spread of mobile phones in developing countries is a good example. People are benefiting from the communications revolution despite their countries not having made expensive investments in fixed-line phone infrastructure. Could China leapfrog straight to new, more environmentally friendly technologies for automobiles?

There are reasons to hope that China will learn from our mistakes and take steps to encourage research, development, and deployment of high-fuel economy, low-emissions vehicles. The Chinese government has already put a few policies in place to try to deal with pollution and to slow growing consumption of oil. The government will start offering a tax incentive for environmentally friendly vehicles, which will lower their price by about 10%. Fuel economy standards, as I've noted, are already more stringent in China than in the U.S. and are set to be tightened further. The Chinese standards are also "bottom heavy" - the biggest improvements are being demanded of the larger, most inefficient vehicles, which in theory should discourage infiltration by SUVs into the vehicle stock.

Further opportunity lies in the fact that with sales slackening in the US and Japan, car makers are scrambling to produce in and sell to China. "These developing markets used to be an afterthought. Now they are the industry's future," says Hirofumi Yokoi, an analyst for auto market research company CSM Worldwide. Toyota, for example, plans to start manufacturing hybrid versions of its Camry model in Guangdong province, with an eye to accessing the Chinese market.

As a place where automakers are eager to both manufacture and sell cars, China has some leverage over what its car culture ends up looking like. Will the Chinese government and Chinese consumers choose to demand more efficient, low-emissions vehicles, given their concerns over pollution and oil dependency? Do they have another choice?

For OEMs (original equipment manufacturers, shorthand in the auto industry for the big brand name manufacturers like GM, Toyota, or Volkswagen), this could be a great opportunity to improve cleaner car technology and even to commercialize the next generation of plug-in hybrid electric vehicles (PHEVs). China's market is large enough to realize the learning potential of new technologies. Car ownership is still relatively low. 24 out of every 1000 people in China own a car, compared to about 800 out of every 100 in the U.S. Capital stock is also low - new plants can be built ready to roll out the next generation of technology, rather than old plants needing to be retrofitted. Given the low cost of producing in China and the learning curve afforded by the potential size of the market, China could very well be a key to driving down the price of cleaner cars to parity with traditional models.

Clearly, commercializing low-emission and PHEV technology is an international priority. Equally clear, I think, is that the Chinese will be a lot more receptive to international cooperation on technological innovation than pressure to sign on to emissions targets. And given that the Chinese appetite for personal automobiles continues to grow, we should think about ways to ensure that they're getting the technology they need to make all those new cars as green as possible. The trick is to find innovative, equitable, and effective ways to support mechanisms enabling technology transfer, joint ventures that build a base of knowledge and physical capital in China, and international cooperation on basic research, development, and deployment.

A few caveats: the Chinese government needs to be willing to negotiate on lowering the barrier to market entry for foreign automakers, make their joint venture requirements less stringent, and improve safety standards in their automobiles to make them ready for export. OEMs must take seriously the need to ensure that knowledge and skills are transferred, and to guarantee the same labor and safety standards in their Chinese factories which they uphold at home. And national governments need to work together to provide the right incentives to see cleaner cars effectively commercialized by the private sector, including transition incentives, support for R&D, smart institutions and mechanisms that foster innovation and tech transfer, and dealing with international intellectual property rights issues fairly (this is a post for another day, I think).

So as terrifying as the prospect of even more traffic in Beijing may be, all those cars represent millions of people's aspirations and we'd do well to respect that. The whole world can benefit from a sustainably developed China. So what are some smart ways we can encourage it? China's demand for cars might offer one opportunity for international cooperation on a really significant tech breakthrough. Let's be on the lookout for more.

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Chinese Students Taking a Stand to Stop Climate Change

I came across this post ChinaDialogue by Peng Li, a Masters student at Tsinghua University. It's great to hear about Chinese students organizing for a sustainable future all across China. I hope we can build bridges across language barriers between youth climate movements in the West and in China. We stand in solidarity!

Campus action: Chinese students take a stand
By Peng Li November 02, 2007

Universities across China are buzzing with green activity, says Peng Li. From book swaps and fashion shows, to climate conferences and the Live Earth concerts, student green groups are leading the way.

Beijing’s prestigious Tsinghua University is well-known for its trees and lawns, but visit today and you might find yourself appreciating another kind of “green”. Bins to deposit batteries for recycling are dotted around, while paper recycling facilities are seen all about campus. There are regular second-hand markets where books, including unwanted textbooks, find new homes. Invitations to save water and electricity are posted next to taps and light switches.

Environmental activities have become ever more frequent at Tsinghua over the last few years, and they now account for a significant proportion of the campus cultural life. “Green Tsinghua day” is in its tenth year, and includes exhibitions, lectures and events encouraging reduction in plastic bag usage and paper recycling. It has had a lasting effect on thousands of students; efforts by student green groups have succeeded in persuading many students to make changes to their day-to-day lifestyles.


At Peking University, another of China’s leading universities, the environment is also a key concern. The Peking University Environment and Development Association is China’s longest-established campus green group. It has been involved in awareness-raising, educational and practical activities for 16 years. In October 2006 they formed the first youth group in China to focus on climate change: the Clean Development Mechanism Club, and produced the “Handbook for Youth Action on Climate Change”. On Earth Day this year, the group surveyed climate-change awareness across 19 Chinese universities, at the same time as it organised activities to educate students about the causes and consequences of climate change, its urgency and the students’ own responsibility. With support from the China Environmental Protection Foundation, the group is currently carrying out a campus energy audit to understand the contribution universities make to greenhouse-gas emissions.

Beijing Normal University has also featured a range of green activities run by student environmental groups, including fashion shows with environmental themes such as “the atmosphere”, “forests” and “water”.

Meanwhile, Jiaotong University Student Association in Shanghai left campus to visit the city’s most polluted district: Shenzhuang, and take the message of environmental protection into communities and schools.

Beijing Jiaotong University has been promoting energy conservation and saving water since 1987, and has adopted a range of technologies to achieve this end. In all, the university says, it has saved 5 million cubic metres of water and 1.3 million kilowatt hours of electricity. This tradition is an important part of what students are taught and are encouraged to sustain, and it has become an important part of the university’s culture.

Some universities are even making these ideals a compulsory part of student life. Zhejiang Forestry Institute has far stronger rules on the use of water, power, air-conditioning and public spaces than many other institutions.

Now, whether you are at Fudan University, Nanjing University or Xi’an Jiaotong University, almost all of China’s universities have students working to promote environmental awareness, persuading hundreds of thousands of fellow students to make changes to their lifestyles.

Active student environmental groups in China number 2,500, according to incomplete statistics. And they are linking up, exchanging experiences and organising regional – and even national – events. For example:

• In March, Campus green groups in Chongqing joined forces to publish guidelines for student groups working on climate-change issues, with the aim of launching large-scale activities to promote water conservation, energy efficiency and emissions reduction.

• A number of Chinese universities, including Wuhan University and Renmin University, held a conference in Wuhan in June to promote on-campus green activities.

• In July, the Shanghai Live Earth concert became a platform on which the China University Students Environmental Organisation Forum brought together student green groups to make a statement on the need to combat climate change.

• Students from nine universities in Beijing used their summer vacation to teach cadres, farmers and teachers in rural areas about environmental technology.

• In August, groups including Peking University’s Clean Development Mechanism Club and the China University Students Environmental Organisation Forum formed the China Youth Climate Change Action Network to guide student and youth projects on environmental issues. Twenty-three of these groups are developing a database of power use and emissions on China’s campuses. 

• Eleven universities and research institutes, including Beijing Forestry University, North-Eastern Forestry University and Nanjing Forestry University, in October held a competition to increase understanding of forestry’s relation to climate-change issues.


Hope for the future

From energy efficiency to mitigating climate change, China’s students are looking for solutions. A lack of resources and experience, fundraising, management and publicity do present problems, and it is often difficult for groups to feel they have a lasting and wide-ranging impact. If they continue to care and to act, however, progress will continue.

Chinese people sometimes refer to university students as “flowers of the motherland.” When our students graduate and leave university, their green lifestyles and concern for the environment will influence society as a whole. Let us hope that the Chinese people, already enjoying the fruits of economic growth, will then come to live more environmentally friendly lives and show concern for the worsening ecology of China and the world – and work to find solutions.

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