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?
- 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 ↩