West takes credit for China's emissions
By Craig Meer and Vincent Shie
Republican candidate for US president Senator John McCain took aim on May 12 at
China and other industrializing nations on the issue of climate change: "No
nation should be exempted from its obligations. And least of all should we make
exceptions for the very countries that are accelerating carbon emissions while
the rest of us seek to reduce emissions."
The senator's words have increasing resonance as people from across the
political spectrum begin to accept that global temperatures are rising, and the
big polluters are to blame. The UN Intergovernmental Panel on Climate Change
announced in its Fourth Assessment Report last year that "warming of the
climate system is unequivocal" and "... is very likely due to the observed
increase in anthropogenic GHG [human-induced greenhouse gas] concentrations".
China is emerging as the largest contemporary source of that "observed
increase", and will soon displace the US as the world's single-biggest emitter
of greenhouse gases. Best estimates drawn from government data suggest that
China emitted about 6.8 billion tonnes of carbon dioxide equivalent (CO2e) last
year while the US came in at around 7.1 billion tonnes CO2e.
The International Energy Agency announced last June that China had already
pipped the US for the top spot in terms of fossil fuel use. About 60% of total
anthropogenic emissions come from burning gas, oil and coal.
The crux of the problem is stationary energy generation and China's demand for
it. More than 70% of China's electricity comes from emissions-intensive
coal-fired power stations and the nation is adding around two new medium-sized
power stations of about 5-10 megawatts to the grid every week.
Official government announcements suggest China is not about to give up its
carbon habit lightly. Beijing has argued consistently since the establishment
of the UN Framework Convention on Climate Change in the late 1980s that it will
not accept any obligation to reduce greenhouse gas emissions that could
negatively affect its development prospects.
While these trends are the stuff of nightmares for climate scientists, China's
medium-to-long term prospects for bringing its emissions under control are
favorable thanks in part to an inflow of finance attached to the Clean
Development Mechanism (CDM), a Kyoto Protocol arrangement.
The CDM allows firms from industrialized nations to meet emissions targets
through mitigation projects in developing countries - that is, such firms
invest in projects that reduce emissions in developing countries as an
alternative to more expensive emission reductions in their own countries.
About 210 of the 1,055 CDM projects registered worldwide are in China, a pool
capable of annual "certified emission reductions" (CERs) of 109 million tonnes
CO2e. The annual CERs potential of all CDM projects comes in at just over 214
million tonnes CO2e.
The Office of the National Coordination Committee on Climate Change, China's
"designated national authority" for managing CDM projects, has formally
approved a total of 1,157 projects, most of them in the last 12 months. If all
these projects move on to registration, they will generate CERs to the value of
271 million tonnes CO2e annually, or nearly 4% of China's current emissions.
According to the World Bank, total CDM flows last year were worth US$13 billion
and more than 70% of that money went to China - dwarfing the inflow of
development aid over the same period, including official assistance for
environmental protection at around $1.5 billion.
Outside the CDM framework, it is difficult to assess accurately just how much
foreign investment and expertise is finding its way into reducing Chinese
emissions. However, three observations suggest it is expanding at a rapid pace.
First, there are early signs that foreign direct investment (FDI) in China is
undergoing a structural transformation away from energy-intensive and polluting
industries. This follows amendment of the Guidance Catalogue for Overseas
Investment Industries in December last year to encourage foreign investors to
participate in "cleantech" enterprises such as recycling, renewable energy and
energy efficiency.
The move was designed to reverse a tendency for FDI to converge on "polluting
industries" in China (84% of accumulated FDI, according to a January report by
the China Council for International Cooperation in Environment and Development)
at the expense of "environmental protection" (less than 1%).
Despite the new restrictions, inbound investment is continuing unabated. In the
first quarter of this year, foreign firms invested $27.4 billion in China, up
61% on the same period in 2007.
Second, domestic cleantech investment is growing strongly. According to
Cleantech China, a for-profit industry association, cleantech venture capital
in China grew to over $550 million in 2007, up from $400 million in 2006 and
$170 million in 2005. Cleantech China expects the figure will reach $720
million in 2008. Best estimates place the amount of capital going into China’s
mainstream renewable energy capacity including solar, hydro, biomass and wind -
at $10 billion in 2007, around 20% of total world investment.
And finally, there is an increasing stock of anecdotal examples that point to a
leading role for foreigners in the transfer of low emissions technologies to
China.
Roaring 40s, a renewable energy company with Australian roots, has built or is
in the process of constructing wind farms at eight locations in the east and
northeast of the country. The firm has also negotiated a substantial number of
other deals in China, including a $500 million project in Jilin province to
construct the world's largest wind farm, with 1,000 megawatts of installed
capacity.
Roaring 40s was established through a joint partnership of Hydro Tasmania with
Hong Kong giant China Light and Power Group in 2005 and participates in Chinese
energy markets through partnerships with local providers such as China Datang
Corporation and Guohua Energy.
Craig Meer is a freelance writer on Chinese development and environmental
issues based in Canberra, Australia. Vincent Shie is a lecturer in
sociology and development studies at Fuhren University in Taipei, Taiwan
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