China's energy use threatens goals on warming

Even as China has set ambitious goals for itself in clean-energy production and reduction of global warming gases, the country’s surging demand for power from coal and oil has led to the largest six-month increase in the tonnage of greenhouse gases ever by a single country. China’s leaders are so concerned about rising energy use and declining energy efficiency that the cabinet held a special meeting this week to discuss the problem, according to a statement on Thursday from the ministry of industry and information technology.

Premier Wen Jiabao promised tougher policies to enforce energy conservation, including a ban on government approval of any new projects by companies that failed to eliminate inefficient capacity, the ministry said. Wen also said that China had to find a way to meet the target in its current five-year plan of a 20 per cent improvement in energy efficiency.

“We can never break our pledge, stagger our resolution or weaken our efforts, no matter how difficult it is,” Wen said. Western experts say it will be hard to meet the target, but that China’s leaders seem determined.

“No country of this size has seen energy demand grow this fast before in absolute terms, and those who are most concerned about this are the Chinese themselves,” said Jonathan Sinton, the China programme manager at the International Energy Agency in Paris.

China has been the world’s largest emitter of greenhouse gases each year since 2006, leading the United States by an ever-widening margin. A failure by China to meet its own energy efficiency targets would be a big setback for international efforts to limit such emissions.

Such a failure would also be a potential diplomatic embarrassment for the Chinese government, which promised the world just before the Copenhagen climate summit meeting in December that it would improve energy efficiency.

The issue has major economic implications for China and for global energy markets. The nation’s ravenous appetite for fossil fuels is driven by China’s shifting economic base — away from light export industries like garment and shoe production and toward energy-intensive heavy industries like steel and cement manufacturing for cars, appliances and construction for the domestic market.

Almost all urban households in China now have a washing machine, a refrigerator and an air-conditioner, according to government statistics. Rural ownership of appliances is now soaring as well because of new government subsidies for their purchase since late 2008.

Car ownership is rising rapidly in the cities, while bicycle ownership is actually falling in rural areas as more families buy motorcycles and light trucks.

General Motors announced on Thursday that its sales in China rose 41 per cent in April from a year earlier, virtually all of the vehicles made in China because of high import taxes.

Zhou Xi’an, a National Energy Administration official, said in a statement on Thursday that fossil fuel consumption was likely to increase further in the second quarter of this year because of rising car ownership, diesel use in the increasingly mechanised agricultural sector and extra jet fuel consumption for travellers to the Shanghai Expo.

The shift in the composition of China’s economic output is overwhelming the effects of China’s rapid expansion of renewable energy and its existing energy conservation programme, energy experts said.

Big leap

Oil- and coal-generated electricity consumption each jumped 24 per cent in the first quarter of this year compared to the corresponding period last year, according to recent data from China’s National Energy Administration.

That was twice as fast as economic growth of about 12 per cent during that period, a sign that rising energy consumption is not just the result of a rebounding economy but also of changes in the mix of industrial activity.

Burn1ing fossil fuels releases carbon dioxide, which many scientists describe as the biggest manmade contributor to global warming.

President Hu Jintao pledged in November that by 2020 the Chinese government would slow its growth in greenhouse gases by sharply improving energy efficiency.
Wen went to the Copenhagen climate meeting three weeks later and opposed any international monitoring of China’s energy efficiency effort or binding limits on China’s overall energy consumption.

China’s current five-year plan, from 2006 to 2010, already sets an efficiency target that the country may now be less likely to meet.

The plan calls for the energy needed for each unit of economic output to decline by 20 per cent in 2010 compared to 2005.

For a while, China seemed to be on track toward that goal. According to the ministry of industry and information technology, energy efficiency actually improved by more than 14 per cent from 2005 to 2009.

But it deteriorated by 3.2 per cent in the first quarter of this year, the ministry said on Thursday.

Wen said that this deterioration would make it ‘particularly difficult’ for China to meet the 20 per cent target.

Without big policy changes, like raising fuel taxes, “they can’t possibly make it,” said Julie Beatty, the principal energy economist at Wood Mackenzie, a big energy consulting firm headquartered in Edinburgh, Scotland.

Hu promised last November that China would improve the energy efficiency of its economy by 40 to 45 per cent by 2020. The ministry statement on Thursday did not mention whether Hu’s promise might still be achievable.

Complicating energy efficiency calculations is the fact that China’s National Bureau of Statistics has begun a comprehensive revision of all of the country’s energy statistics for the last 10 years, restating them with more of the details commonly available in other countries’ data. Western experts also expect the revision to show that China has been using even more energy and releasing even more greenhouse gases than previously thought.

Revising the data now runs the risk that other countries will distrust the results and demand greater international monitoring of any future pledges by China. If the National Bureau of Statistics revises up the 2005 data more than recent data, for example, then China might appear to have met its target at the end of this year for a 20 per cent improvement in energy efficiency.

China’s recent embrace of renewable energy has done little so far to slow the rise in emissions from the burning of fossil fuels.

Wind energy effectively doubled in this year’s first quarter compared to a year earlier, as China has emerged as the world’s largest manufacturer and installer of wind turbines. But wind still accounts for just 2 per cent of China’s electricity capacity — and only 1 per cent of actual output, because the wind does not blow all the time.

Meanwhile, fuel-intensive heavy industry output rose 22 per cent in the first quarter in China from a year earlier, while light industry increased 14 per cent.