Latest Articles by Wang Tao

Is the west to blame for China’s emissions?

Jim Watson, Tao Wang — Thu, 20 Dec 2007 09:46:00 +0000

China’s exports to the west accounted for almost a quarter of the country’s total CO2 emissions in 2004. Rich countries must help the developing world make the switch to a low-carbon economy, write Wang Tao & Jim Watson.

China is now believed to be the world’s largest emitter of carbon dioxide, the most important greenhouse gas, overtaking the United States to take the number one spot. This has led to renewed calls for China to act in reducing the environmental impacts of its phenomenal growth. These calls have been resisted, inside and outside China, on the grounds that industrialised countries are responsible for the majority of emissions to date. Moreover, it has been argued that the steep rise in China’s carbon emissions has been fuelled by exports of cheap goods from its factories to western consumers.

China is rapidly becoming the world’s manufacturing hub. The country is now exporting an increasingly large quantity of labour and energy-intensive goods to developed countries. A high-profile example is the arrival of the world's largest cargo ship – the Emma Maersk – in the UK just before Christmas 2006. It was carrying more than 45,000 tonnes of Christmas goods from Chinese factories for sale to consumers in the European Union.

Trade surplus

China’s trade surplus with the rest of the world has accelerated sharply since its accession to the World Trade Organisation (WTO) in 2001. In 2004, China's exports contributed 34% to the total GDP, and generated a surplus of some US$32 billion. By 2006, China’s trade surplus had reached US$177 billion, and many predict that the figure for 2007 will be at least US$200 billion. The WTO estimated in 2005 that China's exports could overtake the US and Germany by 2010. Only two years later, China has already surpassed Germany as the world’s largest exporter.

The rise of China as a global trading power has led to tensions in the EU and the US over competitiveness and safety issues. Trade conflicts with the US have been a regular occurrence for many years – and have often arisen alongside wider political tensions. In recent times, issues of food safety and steel subsidies have attracted particular attention. Meanwhile, retailers in the EU have had to recall a series of Chinese-made toys amid safety concerns. In addition, the European Commission has recently extended anti-dumping duties on energy saving light-bulbs from China for a further year due to lobbying from German lighting companies. This seems counter-productive given moves within the EU to phase out incandescent lighting and encourage consumers to make the switch to more expensive compact fluorescents.

While the large trade surplus is a major driver of economic growth in China, it has its downsides. According to a recent speech by Bo Xilai, China’s then minister for commerce, 58% of China's exports are from multinational ventures in China. This led some to argue that the Chinese economy is failing to capture enough of the economic wealth generated by such ventures, since much of it is retained by parent companies abroad. Of concern also is the polluting, energy-intensive nature of products such as rolled steel, which are being increasingly manufactured for export as well as domestic markets. While their overall share of exports has been small to date, rapid growth is contributing to China’s local, regional and global environmental impacts. The Chinese government cut the export rebate three times in 2007 alone on these energy intensive goods, and imposed a 10% export tariff on some. However, their efforts have so far been ineffective due to strong international demand.

Exporting emissions

Despite some discussion of the implications of China’s trade surplus on its emissions, there has been little work to quantify this. In a recent Tyndall Centre briefing note [pdf], we set out an initial assessment of the emissions from goods and services that China exports. Our analysis concludes that in 2004 – the most recent year for which comprehensive data is available – net exports accounted for 23% of China’s total CO₂ emissions. This is due to both China’s large trade surplus and the relatively high carbon intensity of the Chinese economy. It is a figure comparable to Japan's total CO₂ emissions, and more than double the UK's emissions in the same year (see figure 1). The equivalent emissions figures for 2005 and 2006 could be larger, since China’s trade surplus has grown.

Figure 1: CO₂ emissions from China’s net exports in 2004 in comparison to other countries’ total emissions

A number of other studies have been conducted, some of which reach similar conclusions. A report in 2005 by Bin Shui, of the US National Centre for Atmospheric Research, indicated that 7% to 14% of China's CO₂ emissions in the period from 1997 to 2003 were due to exports to the US alone. Jiang Kejun of the Energy Research Institute, which is based in the Chinese government’s National Development and Reform Commission, suggests exports account for around 20% of China’s total national energy consumption.

These results are inevitably subject to uncertainties and simplifications, not least because of a lack of data on the carbon intensity of different exported products. However, the implications are clear. The extent of “exported carbon” from China should lead to a re-think by government negotiators working towards a new climate-change agreement beyond 2012.

International footprints

The nation state may be at the heart of most international negotiations and treaties, but global trade means a country’s carbon footprint is international. Should countries only remain concerned with emissions in their borders? Or should they also assume responsibility for pollution from the production of goods and services they consume? The scale of emissions due to exports from countries such as China, not to mention the emissions caused by international air and marine freighting of goods, provide strong arguments for the latter approach.

This analysis also strengthens the case for early action by the developed world in two respects. Firstly, it provides evidence to the international negotiations around climate change that not only are industrialised countries historically responsible for the majority of carbon emissions to date, but industrialised countries may also have significant responsibility for driving the rapid growth in emissions from industrialising countries such as China. Secondly, it supports the expansion of efforts to help developing countries reduce the carbon emissions from economic growth through technical assistance and finance, helping developing countries to transition to a low-carbon economy before too much investment is locked in a carbon-intensive economic model.

Tao Wang and Jim Watson, Sussex Energy Group, University of Sussex and Tyndall Centre for Climate Change Research, UK

Homepage photo by Ian Koh

Pathways to a low-carbon future

Tao Wang, Jim Watson — Fri, 03 Jul 2009 05:51:00 +0000

China has a number of potential sustainable development paths, but none of them will be easy to achieve. This is the conclusion of a recent report by Wang Tao and Jim Watson, which develops a set of low-carbon scenarios to 2100.

China's continuous economic growth over the past 30 years has significantly improved the living standards of many of its citizens. The Chinese government claims that 400 million people were lifted out of poverty between 1980 and 2000, and GDP per capita has increased five times since 1981. Alongside economic expansion, China has also experienced a large increase in energy demand, especially after its economy moved into a stage of heavy industrialisation and urbanisation early this century.

This dramatic increase in energy demand, most of which is met by the use of coal, meant that China became the world’s largest carbon dioxide (CO₂) emitter in 2006. China’s recent energy demand growth has also led to concerns about energy supply, local and regional environmental pollution and social stability. China’s participation is a key to the success of a post-2012 international climate framework. However, such a framework must incorporate the development needs of China and other developing countries. This raises a fundamental question: can China develop within the tight global carbon emissions constraints that climate science now says are necessary?

The Tyndall Centre’s recent research on China’s low carbon development paths has explored this question, and the results are summarised in a new report: China’s Energy Transition. The report investigates the potential trajectories of carbon emissions that China could follow to achieve a given global climate change target. The report investigates in detail how these emission trajectories could be achieved, through changes in China’s economy and society, and the policies and technologies that shape the country’s energy system.

The target for China used in the report is a cumulative emissions budget over the twenty-first century. This is derived from a global target of stabilising the atmospheric concentration of CO₂at 450 parts per million (ppm). According to the Intergovernmental Panel on Climate Change’s (IPCC’s) latest assessment, achieving this target would mean that the world has a significant chance of avoiding some of the worst impacts of climate change. The total global budget is 490 gigatonnes of carbon (GtC) over the twenty-first century. The report analyses four scenarios that are based on two different apportionment approaches for global emissions: namely equal emissions per capita and equal emissions intensity of GDP. Within this, China is given a cumulative emission budget ranging from 70 GtC under the former approach, to 111 GtC under the latter. These approaches were just used to provide an illustrative range for China’s potential cumulative emissions under a given global target rather than argue for legitimate carbon emission share for China. Combined with different medium-term carbon emissions pathways, these budgets imply that China would reach a peak in its emissions between 2020 and 2030, followed by a decline. The four scenarios for China with their different emissions trajectories are shown in Figure 1 (labelled S1, S2, S3 and S4).

Figure 1: Carbon emissions in China: historic data, projections and Tyndall scenarios

The four scenarios analysed in the report are distinctive from each other, but in general are divided by their relative positions on two critical issues: promoting innovation, and the approach to social inequality. This report is not intended to be prescriptive about which of these budgets – or the many alternative pathways – China should follow. The scenarios are designed to illustrate some of the possibilities, and what the consequences of these might be for investment, economic structure and policy if they were followed. The research does not reach a firm conclusion on which scenario is the most desirable.

Within the scenarios, the Chinese economy in 2050 grows to between 8 and 13 times larger than that of today (see Figure 2). The economy in every scenario is dominated by the service sector, as is the case in most of today’s industrialised countries. The structure of other industries varies between the scenarios. In scenarios S1 and S2, high technology and high value-added industries will become the largest subsector in industry, while the other two scenarios will see more contributions from conventional and heavy industries. The total primary energy demand for 2050 also varies among scenarios, ranging from only 15% higher than 2005, to twice the 2005 level.

As a result, the energy intensity of Chinese economy is reduced by 76% to 87% between now and 2050, while carbon intensity is cut further to just 4% to 7% of the 2005 level. China’s carbon emissions rise to between 24% and 72% higher than 2005 by 2020 and subsequently decline to between 15% and 70% less than the 2005 level by 2050. Among all the sectors of the Chinese economy, transportation has the highest growth within the scenarios. Changes in households and industry also hold the key to a successful transition to low-carbon development in the next few decades.
Figure 2: Growth of total gross value-added of Chinese economy in each scenario

Within the Tyndall Centre scenarios, renewable energy plays a much bigger role in China’s energy system in 2050, adding to a more diverse energy structure. Coal reduces from more than 60% in 2005 to around 30% in total primary energy demand, while oil and gas continue their steady growth in the energy mix. Nuclear has the most diverse picture, from negligible in S2 to more than 12% in S3. This reflects different priorities between advanced renewables, such as wind and solar photovoltaics (PV), and nuclear for low-carbon energy supply. Even with a similar level of renewable energy in the scenarios, there is still large variance in technology choice within the renewable options, as well as in the way they are deployed (for example, in centralised facilities or in small-scale micro-generation).

Renewables contribute 37% to 61% of electricity generation in 2050 and differences exist in specific renewable sources in each scenario. For example, the power generating capacity in S2 in 2050 is more than 3,000 gigawatts, four times today’s size. Within this, more than a quarter is from solar and another 22% from wind (Figure 3). This implies an increase at about 10% every year for wind power and 16% every year for solar power between 2010 and 2050. A large portfolio of renewable energy could significantly improve some aspects of China’s energy security, for instance by reducing the exposure to fossil-fuel price volatility. Stability of the energy system with large contributions from renewables will be a serious issue, but could be managed with smarter grid technologies.

Figure 3: Power generation capacity and percentage of each source in 2050 (S2)

Even with the huge expansion of renewables, coal- and gas-fired power generation still account for 34% in this scenario. Carbon capture and storage (CCS) therefore becomes a crucial technology in helping China to develop within a carbon budget. CCS is not assumed to be implemented on a large scale in China until 2030, and will have to be diffused quickly so that decarbonisation of the power system could be achieved in these scenarios. By 2050, CCS will have to be installed on 80% to 90% of fossil-fuelled power plants in scenarios S3 and S4, in which coal will account for higher percentage of power generation than in S2. This means that action is required now, on an international basis, to assist China with the demonstration of CCS technologies. It is also important for China to bear in mind the need to retrofit CCS at a later date when new coal-fired power plants are built.

Energy demand from households and transport will continue their growth in all scenarios as living standards increase in China. Energy-efficiency improvements in appliances and buildings, and contributions from micro-renewables will help to reduce emissions growth from household sectors. High-carbon energy sources, such as coal, will be completely phased out from household use by 2050. The transport system becomes a major carbon emissions source in all scenarios due to high demand growth as well as the difficulty of decarbonisation. Private road transport accounts for most of this growth. But in some scenarios climate-change impacts are reduced with demand-side changes – in mobility patterns, for instance; large scale-ups in of alternative fuel use – such as electricity and sustainable biofuels; and significant developments in public transport.

Renewables contribute 37% to 61% of electricity generation in 2050 and differences exist in specific renewable sources in each scenario. For example, the power generating capacity in S2 in 2050 is more than 3,000 gigawatts, four times today’s size. Within this, more than a quarter is from solar and another 22% from wind (Figure 3). This implies an increase at about 10% every year for wind power and 16% every year for solar power between 2010 and 2050. A large portfolio of renewable energy could significantly improve some aspects of China’s energy security, for instance by reducing the exposure to fossil-fuel price volatility. Stability of the energy system with large contributions from renewables will be a serious issue, but could be managed with smarter grid technologies.

The scenario analysis is intended to inform policy-making both in China and in international climate-change negotiations. Some of the key policy implications of the report’s analysis follow:

• Decoupling carbon emissions growth from economic development in China is challenging, but is in principle achievable – and there is more than one way to realise it. The four scenarios demonstrate different ways to square China’s continuing development within a carbon emissions constraint, with different priorities in governmental decision making, infrastructure investments and social preferences.

• It is vital to start slowing emissions growth as early as possible. This will maximise China’s room for manoeuvre in deciding when it is appropriate for emissions to peak. The later the slowdown in emissions growth and the peak, the more difficult it will be for China in the future. Furthermore, later peaks are often associated with steeper subsequent reductions in emissions, which are likely to be more challenging for policy and social stability. Our analysis clearly demonstrates that 2040 is too late: a peak in Chinese emissions between 2020 and 2030 is therefore a plausible contribution that China could make to global action to stabilise the climate.

• The success and speed of economic and industrial structural change towards a more balanced economy – with a greater role for services and high tech industries – is likely to be crucial to China’s low-carbon development. This fits well with recent policy pronouncements of the Chinese government, which is keen that China moves away from its recent energy-intensive development path. The storylines associated with the scenarios suggest that economic growth could be much faster, more sustainable and resilient to external shocks in scenarios where this shift is implemented more quickly.

• Energy efficiency is vital, but the challenges vary across different scenarios. Currently the largest potential for energy efficiency improvement lies in China’s industries. But the fast growing demand for energy in the household and transport sectors points to the need for early action on efficiency in these sectors too if China’s overall efficiency targets are to be met.

• The transition to a low-carbon development pathway does not only depend on technology choices. Social choices and the potential carbon lock-in associated with life styles and behaviour patterns will have significant impacts on future emissions. Encouraging low-carbon lifestyles and consumption within China’s growing middle class could have a strong exemplary effect on the wider population regarding the development pathways that are desirable. This is an essential aspect of China’s future story that should be addressed alongside measures for low-carbon investment, institutional change and policy incentives.

• While a focus on China’s potential future carbon emission trajectories is very important in terms of climate change, these scenarios have wider implications: they include potentially important impacts on the availability of fossil and non-fossil energy resources as well as other natural resources, such as water and land use. It is also important to consider the energy-security threats that China faces.

The pathways for low carbon development illustrated by the Tyndall Centre scenarios have a particular resonance in the context of the current economic crisis. As in many other countries, there is an active debate within China about the extent to which economic stimulus packages to tackle the crisis can encourage more sustainable forms of development. Low-carbon development not only means the deployment of low-carbon technologies in China, but also presents an opportunity for China to build low-carbon industries and new institutions to foster low-carbon innovation. There are increasing signs that Chinese firms could soon develop world-leading capabilities in key low-carbon technologies, such as wind power. But even if such potential is realised, developed countries still have an obligation to make good on their repeated promises to assist developing countries like China with technology and finance. Without such assistance, there is a greater risk that China will not move fast enough towards the low-carbon development pathway that is necessary to enable the world to avoid the most dangerous consequences of climate change.

For more details, please download the full report here: China’s Energy Transition: Pathways for Low Carbon Development.

Dr Tao Wang is research fellow at the Tyndall Centre for Climate Change Research and Sussex Energy Group at SPRU, University of Sussex, United Kingdom. Contact him: tao [dot] wang [at] sussex.ac.uk

Dr Jim Watson is Director of the Sussex Energy Group at SPRU and deputy leader of the Tyndall Centre's Climate Change and Energy Programme. Contact him: w [dot] j [dot] watson [at] sussex.ac.uk

Homepage photo by Madiko83