China Environmental Law

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Fast & Loose

April 21st, 2009 · 10 Comments

A number of people have referenced the HSBC Climate Change Global Research report, “A Climate for Recovery: The colour of stimulus goes green“, but few people appear to have actually looked at the numbers. 

The report is usually cited for the proposition that China’s stimulus package is a “green” one.  Well, yes and no.  HSBC contends that 37.8% (or 221.3 billion) of China’s stimulus package is devoted to funding “green” initiatives.  Let’s break these numbers down 1:

  • 98.65 billion for railroad construction
  • 70 billion for electric grid construction
  • 51.15 billiion for water and wastewater treatment plants
  • 1.50 billion for low-carbon vehicles (such as hybrid cars or low-carbon emitting fossil fuel vehicles)

How much for low-carbon power projects like renewable energy and carbon capture and sequestration ?  0, got that, “nothing.”  Looks like those new railroads will be hauling a lot of coal to power plants which will send their coal generated power out on new transmission lines.  Of course, China has (in contexts other than the stimulus plan) devoted significant money and efforts to encouraging the renewable energy sector, but it’s hard to find any money in the stimulus package for these efforts (as HSBC admits). 

Thus what are we to make of a report that concludes:

A February analysis by HSBC Global Research in Hong Kong projects that nearly 40 percent of China’s proposed $586 billion stimulus plan-$221 billion over two years-is going toward public investment in renewable energy, low-carbon vehicles, high-speed rail, an advanced electric grid, efficiency improvements, and other water-treatment and pollution controls.

Where in the HSBC report does it note any stimulus expenditure by China on “renewable energy”?  Where does it mention an advanced electric grid or high-speed rail?  Some portion of the expenditures may be going for these purposes but the bulk of the railroad expenditures will be on inter-provincial trunk lines and the grid expenditures will be for basic high voltage transmission lines.  

It is admirable that China is building more railroads and more grid infrastructure.  But to suggest that with these investments China is engaging in major shift of the focus of its economy to a sustainable one is far fetched.  China is building more railroads to move more products, and it is building more grid infrastructure to move more electricity (most of it generated by burning coal).  The stimulus investment in this basic infrastructure should help to reduce the growth rate of the increased carbon emissions associated with this increased production, but it does not a low carbon economy make.  There is nothing in China’s stimulus package so far which will prevent it from more than doubling its 2005 carbon emissions by 2030.  How green is that?

  1. These numbers have been tinkered with by China since the HSBC report, but not in way that impacts the thrust of the points we are making here

Tags: climate change · economic stimulus

10 responses so far ↓

  • 1 Rob Earley // Apr 21, 2009 at 4:59 pm

    I take it HSBS was a slip of the, erm, tongue?

  • 2 cmcelwee // Apr 21, 2009 at 5:15 pm

    @Rob: Oh that is too funny! I wish I could say that it was a conscious humor bit, but it was simply a typo. I’ve fixed it now.

  • 3 Rob Earley // Apr 21, 2009 at 5:16 pm

    I heard lots of announcements about nuclear power in China over the past few days, and about the Beijing-Wuhan-Guangzhou “gao tie” super bullet train that is under construction. 3 hours from Wuhan to Guangzhou is amazing. Would edge out the airline industry if it ran frequently enough.

    Nuclear electricity + fast as flight train probably equals energy savings and lots of emissions savings, no?

    I know it’s only one example, and I agree with you for the most part, but I think this is at least a recognition of the problem by China. And I know nuclear energy isn’t perfect or sustainable, but…anyway, how else are these leaders going to deliver on quality of life during their political lifetimes?

    By the way, have you heard of the Changsha-Zhuzhou-Xiangtan regional plan in Hunan? They’ve also got interesting ideas going on with “environmentally friendly” urban development apparently supported by stimulus somehow.

  • 4 cmcelwee // Apr 21, 2009 at 5:41 pm

    As long as Zhang Guobao is head of the NEA the future looks bright for nukes in China. Only issue for me with nukes is what to do with spent fuel rods. I don’t want to see them on the back of a scrap peddlers cart. HSBC either doesn’t count nukes as renewable or there is no stimulus money devoted to nukes.

    I love high speed rail, more power to it.

    I haven’t heard about the Changsha-Zhuzhou-Xiangtan regional plan in Hunan, but you are getting awfully gullible in your old age Greg!

  • 5 Greg Majersky // Apr 22, 2009 at 11:51 am

    I’m not the gullible one Charlie! Nukes sound fine on paper until one realizes how much water is needed, that is starting to interfere with plans for new nuke plants in the US as well when water tables are falling.

  • 6 cmcelwee // Apr 22, 2009 at 11:57 am

    Oh yeah sorry Greg- you are neither gullible nor old aged, I meant to refer to Rob, but I had yet another typo. Rob isn’t old or gullible either, but I was referring to any high hopes for the Hunan tri-city enviro-plan.

  • 7 AWang // Apr 23, 2009 at 5:16 pm

    Good analysis here. The definition of “green” in the HSBC report (which is relied upon by the Center for American Progress report) is a bit fast and loose. I note that some experts have suggested that the massive US$100b investment rail is in part an effort to prop up the steel industry (which as we know is heavily polluting and very energy intensive).

  • 8 cmcelwee // Apr 23, 2009 at 9:02 pm

    Thanks for the comment Alex! I’m sure the rail expansion projects all went through the new expedited “green” channel to get their EIAs approved. Sort of an Orwellian concept of “green.”

  • 9 Rob Earley // Apr 24, 2009 at 2:57 pm

    Did you catch me in a rare bout of optimism? I have to admit, Changsha was where I lived for my first year in China and I’m a bit of a Changsha cheerleader…they sell as many cars in Changsha these days as they sell in Beijing, apparently. So maybe I was getting a little ahead of myself. bu hao yi si la!

  • 10 cmcelwee // Apr 24, 2009 at 3:15 pm

    You’re excused just this once Rob, but don’t let it happen again! Changsha rivals Beijing in car sales? Now that’s scary.

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