Renewable Energy: Is Red China Going Green?

This is the first in a multi-part EconomyWatch.com series that looks at renewable energy developments around the world.

Beijing, China, 12 May 2009. Most of us have an image of China today that involves perma-smog around Beijing, Shanghai and even Hong Kong, endlessly being replenished by power plants and factories, with one new mega-polluter being added a day. We assume that China feels it has every right to become an economic powerhouse now, and worry about the environment later – after all, that is exactly what the west did.

This is the first in a multi-part EconomyWatch.com series that looks at renewable energy developments around the world.

Beijing, China, 12 May 2009. Most of us have an image of China today that involves perma-smog around Beijing, Shanghai and even Hong Kong, endlessly being replenished by power plants and factories, with one new mega-polluter being added a day. We assume that China feels it has every right to become an economic powerhouse now, and worry about the environment later – after all, that is exactly what the west did.

We will soon have to drop these prejudices. A quiet revolution in China’s views on clean energy is starting to break out into the open, and as with other developments in this nation of 1.3 billion people, it is about to gain both size and startling speed. [br]

There are a number of reasons for that. Switching to alternative energy sources requires capital investments now, but will yield security benefits, and potentially big financial payoffs in the future.

Since there are economic reasons to make investments now – think of more than US$600 billion in economic stimulus that China is pumping into the economy to help offset the collapse of many export markets – it makes sense that renewables should become a focus of attention now in the Middle Kingdom. There is also a sense that China could now spring a surprise on global competitors and take the lead in many green tech fields, allowing it to become a higher value exporter of goods and services.

With its command economy, China is able to mobilise resources on a massive scale at speed. While the US Congress continues to debate the pros and cons of various renewable energy policies, China is already taking action. Wind, solar, nuclear and hydroelectric projects are already receiving their first tranches of investments from stimulus money.[br]

There is also social pressure building in this direction. Many Chinese, who had become resigned to pollution as the natural way of things, were amazed to see blue skies over Beijing during the Olympics. This followed extraordinary measures to idle polluting factories and limit cars on the road. There have been vigorous campaigns to keep those measures in place and improve the health and happiness of the rapidly growing urban Chinese population.

There are also growing ecological concerns. The fate of pandas, for example, who are all but extinct in the wild now, is a matter of grave national concern. Within the last year China has become the biggest polluter in the world, and there are many who are concerned with the lasting impact that this is causing, in both public and government circles. China has had continuous governance for over 5,000 years, and so tends to think long term.

As impressive as some of the current initiatives are, the authorities are now pushing to speed these up. Today, the head of the Chinese National Energy Bureau, Liang Zhipeng, said that $190 billion in investment would be needed for China to achieve its new target of 15 per cent of energy to be supplied by renewable energy sources in 2020, up from the previous 10 per cent target.

The National Energy Strategy of China, published some 18 months ago, called for 30 gigawatts of energy to be generated by wind farms by 2020. That target has now been raised to 100 gigawatts. Similarly, the solar power target has been raised from 1.8 gigawatts to 10 gigawatts.

By 2010, China expects that 10 per cent of its energy needs will be met by low-polluting power sources. China uses more coal than any other nation on earth, but it has also become the world leader in clean coal technologies, which reduce carbon output from coal burning, or seek to trap it entirely.

And if all of that wasn’t enough, by 2050 China targets 40 per cent of energy needs to be meet by clean, sustainable energy sources. Judging by the rate they are developing their programs now, that target could well be raised in the next decade. Would you bet against Red China going Green?

Ling Ling, EconomyWatch.com