As Trump Veers US Off-Course, China Leads on Climate Change

As the Trump administration actively dismantles and passively lets atrophy the U.S. government’s painstakingly constructed systems for addressing climate change at home and encouraging sustainable development worldwide, it is reassuring to observe China confidently moving ahead with its ambitious plans to restructure its economy, revolutionize its energy sector and live up to its commitment to aggressively address climate change. 

The mean spirited Rose Garden announcement on June 1st that the U.S. would withdraw from the Paris Accords displayed an ugly and offensive capriciousness that most of us don’t recognize as American. Those of us who are from Pittsburgh and have marveled at this city’s transformation—from an economically crippled rust belt shell of a city, whose environment once earned it the nickname, “Hell with the Lid Off,” to one of the most economically vibrant, environmentally conscious and hospitable cities in the U.S., were particularly offended by the flippant use of the statement that the Trump administration was representing “Pittsburgh, not Paris” by withdrawing from the Paris Accords.

Below the surface of the “Pittsburgh, not Paris” public vulgarity, lies a more insidious undermining of the structures that have encouraged and empowered China to embark on its own economic and environmental transformation. A “canary in the coal mine” of the Trump administration’s adolescent glee in destabilizing the world’s efforts to combat climate change, was a report in the Chinese renewable energy press that the Twelfth Meeting of the Working Group of the U.S.-China Ten Year Framework for Cooperation on Energy and the Environment, —the flagship vehicle for U.S.-China cooperation on energy and the environment — was held on June 15th, not in person, but as a videoconference! Other important initiatives of cooperation between the U.S. and China on energy, the environment and climate change have atrophied or have been eliminated under the Trump Administration, including, for example, the U.S.-China Climate Smart Cities Initiative, which was to hold the third annual U.S.-China Climate Leaders Summit in 2017 in Boston, but was scrapped; The 8th Annual Clean Energy Ministerial, which was held in Beijing in June, 2017 and attended by Secretary Perry, but primarily to advocate for two new areas of focus: Carbon Capture Utilization and Storage and Nuclear Energy; and the announcement that the DOE’s Office of International Climate and Technology would be closed.

While it is galling to be subjected to the spectacle of the juvenile emasculation of the structures for engagement with China on climate change issues, and embarrassing to be relegated to the booster seat in the back of the (electric) vehicle now being driven by the majority of the world towards a new energy future, it is reassuring that China is now leading the way on energy and the environment.

So, while the Trump administration acts as a petulant child, China forges ahead with the transformation of its energy sector to create an infrastructure for a future of sustainable development. In proudly adhering to (and exceeding) its commitments under the Paris Accords, here are some of the significant strides China has made, while the Trump administration works overtime to hold back the U.S.

Though “peak coal” use in China was not expected to be attained until 2025 at the earliest, recent research, which was published by the International Energy Agency, indicates that in fact China may have achieved “peak coal” in 2013. Since 2013, coal consumption has continued to decline: coal consumption decreased in China in 2014 by 2.9 percent to 4.116 billion MT; by 3.7 percent in 2015 to 3.965 billion MT and by 4.7 percent in 2016 to 3.779 billion MT. As a consequence of the steady decline in the consumption of coal in China, coal as a percentage of total energy use in China dropped to 62 percent in 2016 from 64 percent in 2015. As a point of comparison, in 1990, coal consumption, as a percentage of total energy consumption in China, was 76 percent. China’s trajectory in this regard resembles that of England in the mid-20th century and the U.S. in the late 20th century. 

One of the most significant factors in the rapid reduction in coal consumption in China is the active program of the Chinese government to stop or slow down development of new coal fired plants and to mothball outdated thermal power. Sources predict that during the 13th Five Year Plan period (2016-2020), 150,000 MW of coal fired power plant construction will either be eliminated or slowed down and another 20,000 MW of outdated coal fired power plants will be decommissioned. Through these actions, the total capacity throughout China of coal-fired power plants in 2020 will be limited to 1.1 million MW.

Of course the rapid development of alternative energy sources also has enabled China to reduce its dependence on coal. According to statistics released by the National Energy Administration, China’s total installed capacity of renewable energy as of mid-year 2017 is now in excess of 600,000 MW. This includes 338,000 MW of hydropower, 154,000 MW of wind power, 102,000 MW of solar power and 13,300 MW of biomass power.

One feature of China’s energy development that vividly displays China’s alternative energy trajectory is the percentage of all new power plant capacity that is renewable energy. In the first half of 2017, the 37,000 MW of new renewable energy capacity put into service accounted for 70 percent of all newly installed power plant capacity.

The steadily declining intensity of energy use, the quickening pace of “de-carbonization” of the Chinese energy sector, the increase in use of natural gas as an alternative fuel (from 6 percent of total energy consumption in 2016 to 10 percent in 2020) and the slowdown of GDP growth together have provided space for the transformation of the energy sector in China. Additionally because of the transformation of China’s economy, there is a growing gap between economic growth and energy growth. All of these factors have led some in China to believe that peak carbon emissions from energy consumption in China already occurred in 2014 

Presently experts predict with some confidence that by mid-21st Century China will have realized the de-carbonization of its economy.

Though China already had taken a lead in renewable energy investment (since 2009), that lead is certain to widen while the Trump administration neglects new energy development. In 2004 China’s wind and solar energy investment totaled approximately $3 billion USD. In 2015 China already was investing $100 billion in clean energy development, 33 times its 2004 investment and more than double the investment in clean energy by the U.S. in 2015.

Though market forces increasingly dictate the pace of implementation of alternative energy, public policy continues to exert an outsized effect on the speed at which we achieve the goal of curbing carbon emissions. And in this regard, the Trump administration’s hostility to efforts to combat climate change stand in stark contrast to the receptiveness of the Chinese government in using a host of policy tools to accelerate the transformation of the Chinese economy.

The Chinese have been forthright in recognizing and addressing deficiencies that have slowed adoption of alternative energy. The Chinese appear to have made progress in addressing the problem of curtailment in the utilization of alternative energy resources. In the first half of 2017, the rate of curtailment of wind power has declined by 7 percent and the rate of decline in curtailment of solar power was 4.5 percent. The Chinese are also addressing a host of other issues—including combating regional protectionism, curtailing construction before approvals have been obtained, and effectively enforcing emissions standards. Unlike the U.S., the Chinese understand and are eager to establish policy regimes (such as carbon trading systems) that put a price on carbon emissions.

In terms of clean energy employment, of the approximately 8.1 million clean energy jobs worldwide, 3.5 million are in China, while approximately 1 million are in the U.S. China’s National Energy Administration predicts that clean energy investment will produce 13 million jobs in China between 2016 and 2020.

An insightful U.S. administration might realize that its often stated objective of reducing the trade deficit with China will be accomplished by market forces such as the growing export and sale of U.S. LNG to China grows. The irony, of course, is that the vehicle for the realization of the Trump administration’s objective with respect to U.S.-China trade deficits is the furtherance of China’s clean energy policies. An administration truly devoted to increasing employment opportunities for workers from hard-hit industries would see the value in promoting renewable energy development, which is producing a bounty of good paying jobs. Unfortunately, our present executive branch is actively working against the best interests of the country and ceding leadership to the rest of the world. China stands to be one of the greatest beneficiaries of this folly.

Previous articleConstruction begins on 20-MW Ayanunga hydropower plant in Peru
Next articleSungevity Brand Returns Via Solar Spectrum-Horizon Merger
Lou Schwartz is a lawyer and China specialist whose firm, China Strategies, LLC, focuses on the environmental and renewable energy sectors in China and provides its clients a range of support, including research and analysis, due diligence, merger and acquisition, private equity investment, compliance and data security. Lou has written and lectured widely about China and has taught law and development in China at the university level.

No posts to display