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China ’ s Environmental Challenges: Energy & Climate Change. Joanna I. Lewis, Ph.D. Assistant Professor of Science, Technology and International Affairs Edmund A. Walsh School of Foreign Service Georgetown University Presented at FSI June 12, 2013.

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China ’ s Environmental Challenges: Energy & Climate Change

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    1. China’s Environmental Challenges:Energy & Climate Change Joanna I. Lewis, Ph.D. Assistant Professor of Science, Technology and International Affairs Edmund A. Walsh School of Foreign Service Georgetown University Presented at FSI June 12, 2013

    2. Current and Future Environmental Challenges • Air pollution • Water pollution, water scarcity • Land degradation, desertification • Coal reliance increasing to meet growing energy demand • Energy-intensive industries increasing • Now largest emitter of greenhouse gases

    3. Lake Tai toxic algae bloom (widely reported in fall 2007) Songhua Benzene Spill (Nov 13, 2005) Three Gorges Dam Riots Sparked by Pollution from Chemical Factories in Huashui Village, Zhejiang (April 2005)

    4. Global Greenhouse Gas Emissions Global greenhouse gas emissions (CO2, CH4, N2O, SF6, PFCs and HFCs) in the year 2005 Gg CO2-equivalents per 0.1 degree grid cell. Shown are emissions from anthropogenic origin excluding aviation and land-use, land use change and forestry (LULUCF).

    5. Assessing China’s Carbon Contribution Historic Emissions CHINA

    6. The Coal Challenge in China China LBNL, China Energy Databook, 2004; newer numbers from media reports. Note: Historic capacity data includes all fossil capacity, more recent data is just coal power capacity. US, India, UK numbers are from most recent available year.

    7. Emissions Forecasts China USA

    8. Hotspots • Eastern coastal China • Population center • Economic center • Low elevation • Northern China • Water scarce • Coal-dependent • Agriculture dependent • Southwestern China/Tibetan Plateau • Low population, large share of minorities • Water rich, hydropower dependent

    9. Climate and Security • Climate change as a threat multiplier • Water supply • Food security • Migration • Public health • Economic growth • National impacts will have regional, and possibly global, consequences

    10. Economic Impacts: Coastal China • Sea level rise of up to 1 meter by 2050 on China’s eastern coastline; would submerge an area the size of Portugal • The majority of Shanghai is less than 2m above sea level • China’s twelve coastal provinces contain about 43% of population and contribute about 65% of GDP; per capita GDP 50% higher than national average • 14% of China’s freight goes through Shanghai and 8% through Tianjin; 29% of trade income from Guangzhou • Extreme weather events cost $25 billion in damage in 2006 alone • Declining agricultural yields predicted (rice and maize alone a $400 million/yr export industry

    11. Coastal China and Sea Level Rise The Antarctic Ice Sheet, as a whole, is contributing to sea level rise at a rate 0.2 mm/y; contributing up to 2m of SLR by end of century (IPCC AR4) If the Antarctic ice sheet melted, it would raise global sea level by nearly 60 metres. However, the response of the ice sheet to global warming is the largest unknown in projecting future sea level over the next 100–1000 years.

    12. Threats to Human Security • Disease • Climate change increase disease incidence and transmission, particularly associated with increased spread of tropical diseases • In Asia, H5N1 (bird flu), malaria expected to have increased range • Heat-related disease • Civil Unrest • Driven by water scarcity, particularly in heavily-minority regions • Increased refugees/immigration tensions

    13. Climate Action in China • China has ratified the UNFCCC and Kyoto Protocol, but is not bound to emissions reductions • China has adopted many high-level resolutions and action plans, with key focus on domestic efforts • Energy efficiency • Renewable energy • Energy is at the core of China’s climate change problem

    14. Energy Intensity Trends in China 11th FYP Target: Reduce energy intensity by 20% from 2006-2010 12th FYP Target: 17.3% (2011-2015) 13th FYP Target: 16.6% (2016-2020) * 2006: 1.79% decrease 2002-2005: Average Annual Increase of 2% per year 1980-2002: Average Annual Decline of 5% per year 2007: 4.04% decrease 2008: 4.59% decrease 2006-2009: NDRC reporting a 15% decline 2009: 2.2% decrease * Targets still under discussion 19 Sources: National Bureau of Statistics, China Statistical Abstract, various years; NBS media reports 2010; LBNL analysis.

    15. Energy Intensity: Why it matters Energy consumption at frozen 1977 energy intensity = 3 times higher than with current intensity Energy intensity Actual energy consumption Source: China Energy Databook, LBNL, 2004, China Energy Statistical Yearbook, 2006.

    16. China’s Clean Energy Achievements • Is the leading manufacturer of most renewable energy technologies (small and large wind, solar PV, small and large hydro, solar hot water) • Became largest wind market in the world largest user of clean energy overall in 2010 • Is developing first of its kind government-coordinated gigawatt-scale wind and solar projects • Invested $54.4 billion in clean energy in 2010 – more than any other country

    17. Clean energy is now a $60-70 billion industry globally  Or $252.5 billion in 2011 including all investment flows (R&D, undisclosed deals) Units = $BN Note:. Figures include asset finance (financing of large-scale power-generating projects), public markets (funds raised over the stock markets), venture capital and private equity (financing for primarily private companies from private investors), and funding for small-scale renewable power generation (mainly residential or small commercial photovoltaic systems). Excludes corporate and government R&D. Figures adjusted for re-invested equity. Source: Bloomberg New Energy Finance, October 2012; UNEP, Global Trends in RE Investment, 2012.

    18. Emerging economies are playing an increasingly important role in investment and innovation China EU USA ROW Brazil Asia-8 Japan Notes: Clean energy technologies include biomass, geothermal, wind, solar, biofuels, and energy smart technologies and energy efficiency. New investment includes private and public R&D, venture capital, private equity, and public markets (mergers and acquisitions are excluded). Asia-8 includes India, Indonesia, Malaysia, Philippines, Singapore, South Korea, Taiwan, and Thailand. ROW=Rest of World; EU=European Union; USA=United States of America; UK=United Kingdom; PCT=Patent Cooperation Treaty (streamlined intl. appl. process). Sources: Investment data from Science and Engineering Indicators 2012 (US National Science Foundation 2012); patent data from OECD Patent Database (OECD 2011).

    19. Non-Hydro Renewables Still Small Share of Electricity Capacity

    20. Non-Fossil Energy Targets -Target for 15% of its primary energy consumption from non-fossil fuel by 2020 -18 GW of PV in 2010 installed globally (so their 2020 target is more than twice current global installations).

    21. 12th FYP: Strategic Industries Redefined • “Pillar industries”– strategically important for national security and public interests (over 70% of SOE assets and profits concentrated in the “old” pillar industries) • Receive access to dedicated state industrial funds; increased access to private capital • Supported by national industrial policy (tariffs, preferential loans, R&D funds) Decision on speeding up the cultivation and development of emerging strategic industries (国务院通过加快培育和发展战略性新兴产业的决定); HSBC, China’s next 5-year plan, October 2010.

    22. Renewable Energy • National Renewable Energy Law in place to mandate interconnection and set framework for pricing subsidies • National targets to achieve 15% of primary energy and 20% of electricity capacity from renewables by 2020 • Developing first of its kind government-coordinated GW-scale wind and solar projects • Now the largest producer of solar photovoltaics in the world (mostly exported); home to several advanced wind turbine manufacturers(mostly used domestically) • Use of solar hot water technology exceeds that of all other countries combined, also leader in microhydro power, many bio-power technologies • Stimulus package contains significant incentives for renewables (including building-integrated PV)

    23. Wind and Solar Power Installations, USA & China BP 2011; Burgess 2012; Lacey 2012

    24. Wind energy in China represents the largest clean energy investment anywhere China wind EU wind, EU solar EU wind Source: NSF Science and Engineering Indicators 2012

    25. The Chinese success story Cumulative wind power capacity installed

    26. The Chinese success story Huge gain in market share

    27. Large-scale domestic expansion Provinces becoming hubs of manufacturing and deployment

    28. Carbon Targets • Carbon intensity target: 40-45% below 2005 level by 2020 • Actual emissions reduced will depend on economic growth • Target was announced in Copenhagen but is enshrined in China’s 12th Five-Year Plan along with strategic clean energy R&D programs • Decarbonization of energy supply facilitated by achieving renewable energy goals and increased energy efficiency • Real progress being made domestically in monitoring and verification in both areas which will be important to achieving international commitments • Builds upon the systems in place for energy intensity target, but will require a new system of GHG accounting • Additional climate policies to reduce emissions under development, including a carbon trading program

    29. Response to Environmental Challenges • Local environmental and energy challenges rank above global (but both rank below other national priorities) • Policies are world-class, but implementation is the real challenge • Security concerns brought on by environmental and climate impacts could play a major role in prioritizing environmental protection

    30. International Responses • China’s domestic actions leading them to dominate cleantech, but emissions still increasing rapidly • Leading to growing trade tensions in low-carbon industries - border measures key issue during climate legislation debates; multiple WTO investigations underway on wind/solar • Becoming a big factor in Sino-US relations; other countries joining in • China is playing a very important role already (cost reductions, manufacturing scale), and the rest of the world will benefit • China moving ahead on domestic carbon policy but still not a leader in the international climate negotiations • Environmental diplomacy secondary to domestic priorities

    31. Conclusions • Impacts China will face from climate change will be severe, and could drive domestic action to reduce emissions • Impacts regional, not just localized • Existing environmental problems (air pollution, water scarcity) and other security drivers (food production, immigration) will be exacerbated • Key security hot spots are a particular cause of concern • International retaliation to China’s inaction also a risk • Likely increase in trade sanctions if cooperative approach not taken • Regional, even global implications due to China’s scale and central role