GREEN GROWTH: FROM RELIGION TO REALITY - Sustainia

Chapter 7I. IntroductionAs international concern over climate change grows,many countries including China are pursuing "greengrowth" strategies that aim to both stimulate economicgrowth and reduce carbon emissions.1 The recently announced12th Five-Year Guideline (FYG) dedicates anentire section to “green development”. China’s green initiatives,such as conserving scarce resources and investingin renewable energy, are important and necessarysteps toward creating a more environmentally sustainableeconomy. Yet in order to assess the impact theseinitiatives are likely to have on China’s carbon emissions,it is imperative to place China’s green policies in thebroader context of its manufacturing-driven economyand national energy system. The analysis presented heresuggests that, given the rapid rate at which China’s overallenergy demand is growing, the government’s green initiativeswill not displace the country’s heavy reliance oncoal, and hence will have limited effects on its total carbonemissions in the near term. China’s carbon emissionsare not likely to plateau until 2030 when urbanizationand population growth begin to slow, and when Chinamakes more progress in its transition from an energyintensiveindustrial economy to a service economy.At the highest level, the primary concern of the Chineseleadership is to secure enough energy to fuel the country’shungry economic growth engine, and thereby keepa lid on social and political unrest.At the highest level, the primary concern of the Chineseleadership is to secure enough energy to fuel thecountry’s hungry economic growth engine, and therebykeep a lid on social and political unrest. In China, “energysecurity” – ensuring continued and expanding accessto energy at relatively low prices – is a matter of politicalsurvival. The legitimacy of the party and governmentcomes through the ability to create tens of millions ofjobs each year and raise the living standards of more thana billion people. From 1990 to 2007, 380 million peoplemoved to Chinese cities; between 2007 and 2030, another380 million are expected to move to urban areas (Zhouet al. 2011, 4). As it turns out, this task requires an enormousamount of energy. To that end, the government isinvesting heavily not only in energy efficiency programsand non-fossil fuel energy sources, but also in new coalfiredpower plants and high voltage transmission lines toconnect both new coal and new renewable sources to thestate grid. Despite this massive investment, China is stillrationing electricity and dealing with power outages in2011. The core challenge the government faces, therefore,is not how to supplant coal with renewables, butrather how to supplement existing energy sources withnew sources and generate enough electricity to keep thelights on and the factories running.The core challenge the government faces, therefore, isnot how to supplant coal with renewables, but ratherhow to supplement existing energy sources with newsources and generate enough electricity to keep thelights on and the factories running.The purpose of this report is to illuminate the opportunitiesand implications of China’s current green initiativesfor both energy security and carbon emissions. Ourkey findings are as follows: First, because of China’s needfor a cheap and abundant energy source, coal will remainthe dominant energy source in the foreseeable future,even under the most optimistic scenarios. As such, carbonemissions as a policy issue will continue to take abackseat to energy security. Second, although renewableenergy will barely make a dent in China’s overall energyneeds, the country’s burgeoning green industries are likelyto significantly impact global energy markets throughlearning and scale effects. Third and finally, the greatestcontribution the international community can make towardreducing global carbon emissions is to help Chinadevise methods to burn coal more efficiently and cleanly.Foreign criticism of – and energy proposals which ignore– China’s reliance on coal is unproductive.The rest of this report is organized as follows. First,we investigate the broader political and economic contextof China's energy strategy. The legitimacy of China’sauthoritarian, single-party government is contingent onits ability to create jobs for and improve the living standardsof average Chinese citizens. Therefore, the government’spriority is on securing enough energy to feed thecountry’s economic growth engine. Second, we examineChina’s current energy-related initiatives – includingenergy efficiency, economic restructuring, expansion ofrenewable sources, and electricity transmission – and assessthe implications for both energy security and carbonemissions. Third, we reiterate China’s continued relianceon coal as its primary energy source. China's present en-1 Given the limited scope of thiscross-country report, we confineour analysis to a narrower area ofinterest, defining green growth asjob creation or economic growthcompatible with or driven byactions to reduce greenhousegas emissions. These summarizethe types of growth that must beachieved in order to successfullysupport growth while simultaneouslyavoiding climate catastrophe.As such, we focus our attentionon those Chinese policiesthat affect carbon76