Block’s Indicator of Sustainable Growth

By Ray Block

There are no climate change sceptics in China’s leadership team.  The State Council Standing Committee, China ‘s Cabinet,(August 12) was told of the urgency of tackling climate change, and the need for domestic objectives to control greenhouse emissions.

Summarising a report from the Xinhua official news agency, Reuters says that the Chinese leadership saw the need for  “setting medium and long term development strategies and plans of government at every level.”

Jiang Kejun, a climate change policy expert at the Energy Research Institute in Beijing said that officials were considering whether to develop a specific plan to address global warming alongside the next five year plan.

“This shows climate policy issues are now a central part of the national strategy,” Kejun said.

Along these lines, the National Energy Bureau is being quadrupled in manpower to about 120 to create a unified national energy management regime to focus on energy supply and production.

China Daily says the Bureau will be in charge of energy policy, project planning and approval, electricity, coal, oil, nuclear power and international co-operation on energy.

China’s policy is firming along the lines, that the country will set dates for reductions in carbon  emissions for 2050 and beyond.  But it will not set caps on emissions for near term years, such as 2020, or 2030.

Financial Times (August 14 2009) reports that Su Wei, director general of the climate change department of the powerful National Development and Reform Commission is keeping to the line that “China still needs to grow its economy to help its people escape poverty.”

But as the FT reporter noted,  Su Wei “indicated an opennesss to compromise.”

“China will not continue growing emissions without a limit or insist that all nations must have the same per capita emissions.”  China sees its emissions peaking between 2030 and 2040. According to a UK study, If China’s emissions peak in 2030, this would be equivalentto  carbon emissions about 57 per cent above its current 2009 levels.

To its credit, China’s current five year plan to end in 2010 has a target of reducing energy intensity per unit of gross domestic product by 20 per cent,  and the next five year plan will reduce energy intensity on a far more reaching basis. From 2005 to 2008, energy intensity decreased 10 per cent.

The consultancy, McKinsey in its February 2009 report “China”s green  revolution” February 2009, estimates that for every five year plan period over the next 20 years, China cold achieve a 17 to 18 per cent reduction in energy intensity per unit of GDP.

 American observers agree that China has improved upon the most common coal technology to create some of the world’s most efficient power plants, allowing for higher energy production from the same quantity of coal.

But in a note of caution, McKinsey says that even with the degree of energy intensity reduction envisaged, China with  over 40 per cent of the world’s coal consumption would by 2030 still be utilising an immense amount of hydrocarbons- 4.4 billion metric tons of coal and 900 million tons of crude oil. Hardly a healthy outlook for reducing CO2 in the atmosphere.

In its international negotiating stance, the US Senate Foreign Relations Committee noted in its report “Seizing the opportunity for meaningful US-China Collaboration on Climate Change” (July 21 2009), that “China has staked out a particularly demanding and uncompromising position.”  It is calling for a 40 per cent cut in greenhouse gas emssions by 2020 by developed countries, as well as additional assessed contributions, indexed to GDP.”

China Daily quotes Lin Boqiang, director of the China Centre for Energy Economics Research at Xiamen University urging the developed countries to offer financial and technological aid to developing countries, such as China and India to cut emissions. “That is the way to bring them into the deal,” said Lin.