China Environmental Law

China fine tuned its 2008 “energy intensity” number yesterday and announced that the energy used to generate each dollar of gross domestic product fell 4.59 percent (to 1.107″ton of coal equivalents”/10,000RMB of GDP).  This is good news, but will still require over the next two years a combined 10.4% drop from the 2005 baseline to meet 2010 goal.

China’s energy efficiency drive has been prominently featured in the domestic and international press and even rated a mention in President Obama’s Address to a Joint Session of Congress on Tuesday (”it is China that has launched the largest effort in history to make their economy energy efficient”).  It is a very commendable effort, and China deserves a lot of credit for continuing to push hard for improved efficiency even when the initial efforts did not appear very promising.

Before you pop the Champaign corks, however, consider some other sobering statistics, and a new McKinsey study.

Given the rate of China’s economic growth, energy efficiency gains only slow the rate of growth in energy consumption.  It is estimated that “China’s energy consumption increased 4 percent to 2.85 billion tonnes of coal equivalent for 2008,” and that “total coal consumption increased 3 percent to 2.74 billion tones.“ 

Please understand this: energy efficiency improvements in China can help reduce the growth of carbon emissions, but they can not and will not cap carbon emissions, much less reduce them.

Here’s what the new McKinsey study “China’s Green Revolution” (sorry I can’t find it online yet) has to say about China’s energy efficiency program and climate change:

China could become hugely more energy-efficient in the next 20 years, but even if it did all it could, a growing economy means its carbon footprint would still increase.

I hesitate to include some of the other points from the McKinsey study because they are so depressing.

To achieve the maximum effect, China would need to do much more, including using solar power as well as even more nuclear and wind, ensuring buildings and cars are as efficient as possible, and turning desertified land back into green forest.

But even with maximum efforts, China would emit 8 gigatons of carbon dioxide in 2030, 10 percent more than in 2005, and coal demand would be 2.6 billion tons, unchanged from now [but producing only 34 percent of China's power supply compared to 80 percent today].

And even getting to that level, isn’t going to be fun or easy, “[o]nly a third of the measures needed for the most benefit would pay for themselves, while another third would have a ‘substantial’ economic cost.”

Throwing cold water on this otherwise cheery scenario was Huang Shengchu, the president of the China Coal Information Institute (OK, consider the source).  He said that China will have to continue to rely heavily on coal, so forget about those 34% numbers, “China’s coal-fired power will account for 60 percent of total power output by 2030, although it is declining.”

And on that note I leave you to go invest in levee construction companies.