China is an environmental mess. Smog in Beijing is so bad it’s literally broken the air-quality index. In Shanghai, it’s at times turned the city into a scene from Blade Runner. (It almost matches the infamous Cleveland smog of the 1970s.) Meanwhile, thousands of dead pigs—cause of death not yet known—have been floating down a river that cuts through Shanghai and provides part of the region’s drinking water. More than half of China’s water is so polluted, in fact, that even treatment plants can’t make it safe to drink. And China is now responsible for almost half the world’s coal consumption. That coal burning not only contributes to climate change—it’s also saddled China with severe cases of acid rain, something the United States dealt with a generation ago.
All of that makes what I’m about to say sound even crazier: China may one day be the world’s leader in combating climate change. In almost every way you cut it, China is already taking a much more aggressive approach toward climate change than the United States is.
This is important for two reasons. First, China is seeing the world’s fastest growth in energy consumption and in CO2 emissions. In the United States and Europe, by contrast, energy usage is nearly flat and CO2 emissions are down. So China’s policies exert a huge lever on future CO2 emissions. Second, one of the prime arguments against U.S. action on climate change has been that it doesn’t matter what the United States does if China isn’t on board.
Well, China already is on board in a number of ways that the United States isn’t. Consider the following:
1. China is launching a cap-and-trade plan.
In the United States, the Waxman-Markey cap-and-trade plan fizzled in the Senate in 2009. In China, meanwhile, authorities have moved forward with pilot cap-and-trade systems covering seven regions, including the manufacturing hub provinces of Guangdong and Hubei, as well as the cities of Beijing, Shanghai, Tianjin, Chongqing, and Shenzhen. The first of those cap-and-trade systems, in Shenzhen, will start operation June 17. By 2020, the Chinese government plans to link those regional systems into a national carbon market. Just last month, the governments of China and Australia announced their intent to link the two countries’ carbon markets into a regional one.
2. China is also launching a carbon tax.
In March, the U.S. Senate unceremoniously voted down an amendment that would have opened the way to a carbon tax. Not so, China. Officials there have announced their intent to institute a tax on CO2 emissions, likely starting in 2015 or 2016.
3. China is investing more in renewable energy.
Not satisfied with those future plans? Consider the here-and-now. In 2012, the United States spent $35 billion on renewable energy—actually down 37 percent from $56 billion in 2011. China, meanwhile, spent a whopping $65 billion on renewable energy in 2012, or 85 percent more than the United States did in the same year.
Yes, China’s population is more than four times the United States’. But China’s economy is only half the size. As a fraction of its overall economy, China invested almost four times as much as the United States in renewable energy in 2012.
4. China dominates in solar production …
China has taken a huge lead in the production of solar panels in particular. In 1995, the United States produced nearly 40 percent of the solar panels produced around the world, while China made less than 1 percent. Now Chinese companies produce more than half the solar panels manufactured worldwide, while the United States produces less than 10 percent.
Critics have decried this as a case of China’s government using cheap loans and investments to bootstrap an industry. And that’s exactly what it is. Whatever the short-term fluctuations in the solar market may be, whether China is guilty or not of intentionally flooding the market, in the long run the demand for solar power is going to grow by orders of magnitude. Solar power is going to be absolutely essential to meeting growing energy demands while staving off climate change. Chinese banks and Chinese leaders know this, and they plan to be the world leader in that industry.
5. … and is second only to Germany in solar deployment.
China doesn’t just manufacture a lot of solar power equipment. In 2012, the only country in the world that installed more solar power for its own needs was Germany. The United States was No. 4, after Italy.
6. China loves wind more than coal, and more than we do.
For all this investment in solar power, the energy source most commonly associated with China is coal—dirty, dirty coal, the most CO2-intensive of all the fossil fuels. And yes, China does burn almost as much coal as the rest of the world combined. But in 2012, China actually increased wind power generation more than coal power generation.* In fact, wind power growth was more than double that of coal power growth in China—26 terawatt-hours of new wind generation in 2012 versus only 12 terawatt-hours of added coal generation in the same year.
And when ranked against other countries, China comes in at—you guessed it—No. 1 in terms of the total amount of wind generating capacity installed, about 76 gigawatts compared with the United States’ 60 gigawatts. And that’s after the best-ever year the United States had in deploying new wind power, spurred on by uncertainty as to whether the wind power production tax credit would be extended.
7. China’s leaders are not like America’s.
There’s a preponderance of scientists and engineers among China’s rulers. New President Xi Jinping was trained as a chemical engineer. His predecessor, Hu Jintao, earned a degree in hydraulic engineering. His predecessor, Jiang Zemin, held a degree in electrical engineering.
You can see this in their public statements. Last year, Xi Jinping said that “global climate change is deeply affecting human beings’ lives and development,” and called for China to develop a “national strategy for [dealing with] climate change.” Among China’s leadership, there simply is no debate about whether climate change is real. The Politburo, too, is stuffed with engineers and scientists. These are men (all men, sadly) who recognize that the world is facing a significant challenge. The conversation in China is not about whether to act against climate change. Rather, it’s about how to tackle climate change, while making room for more than 1 billion Chinese men and women to continue to enjoy the fruits of rapid economic growth.
Turning the Ship
All that said, what China’s doing still isn’t nearly enough to stop climate change. CO2 emissions in 2012 jumped by record amounts both worldwide and in China. China now has a staggering 363 new coal plants on the drawing boards. And behind China comes rising India, with 455 new coal plants on the drawing boards.
But in the end, only one thing matters when it comes to determining what energy technology will be deployed: price. Governments, industry, and consumers choose whatever source of energy comes with the lowest price tag. China, by moving toward cap-and-trade and a carbon tax, is seeking to affect that price tag. And by driving both the manufacturing and deployment of renewable energy, China’s green technology investment is also fueling a tremendous amount of research and development, driving down the intrinsic price of solar panels and wind turbines.
When that price gets low enough—through whatever combination of innovation and market-correcting policies get us there—the whole world will shift its behavior.
And right now, there’s a fair case to be made that no country is doing as much to reduce the price of green energy as China. Take note, America.
Adapted from The Infinite Resource: The Power of Ideas on a Finite Planet, published by University Press of New England. Reprinted with permission.
Correction, Aug. 28, 2013: This article originally misstated that China deployed more new wind power than coal power in 2012. China deployed substantially more new coal capacity (new coal-burning power plants) than wind capacity. However, total use of wind power rose twice as fast as the use of coal power in China, as many new and existing coal-burning power plants operated at far below their rated capacity in 2012, and continue to. (Return to corrected sentence.)