“Green” China: Big PR vs. King Coal (move over dung, primitive biomass, and Waxman-Markey)

By Donald Hertzmark -- June 24, 2009

In a previous post, CO2 Cap-and-Trade Meets the (China) Dragon, I described China’s rising greenhouse gas (GHG) emissions as a “one-country negation” to the Waxman-Markey climate bill (HR 2454). “The expected growth of coal-fired generation in China over the next 20 years will result in a net increase in CO₂ emissions from their power sector of more than ten times that of reduced U.S. emissions due to coal constraints,” I concluded. This is good, not bad, insofar as dung and wood are terrible things to burn.

Given China’s path, unilateral U.S. actions like Waxman-Markey are futile, symbolic measures. Indeed, U.S. industry would move to China to transfer emissions (called “leakage“) under a stringent U.S. carbon-dioxide regime.

A PR Moment from China

The Chinese government recently announced its intent to reduce the energy efficiency of its economy (GJ/$GDP) by 20%, invest something like $586 billion in renewable energy technologies, improve the power grid and other infrastructure by 2020, and phase out its older, less efficient coal-fired power plants with newer models, including supercritical (higher pressure boiler) technologies. In this vein, a recent article in the New York Times touted China’s success in building more efficient coal-fired power plants, especially in comparison with the U.S.

Importantly and correctly, replacement of older, dirtier coal-fired power plants in China is considered progress. As the Times notes, “The most efficient plants achieve an efficiency as high as 44 percent, meaning they can cut global warming emissions by more than a third compared with the weakest plants.” But after noting that China’s new plants are more efficient than those in the U.S. (not true, by the way), the Times article concedes: “The average efficiency of American coal-fired plants is still higher than the average efficiency of Chinese power plants.”

China’s New Energy Plan: Not Much New

The Chinese policies may reduce their CO₂ emissions a bit over the next 10 or 15 years, but the die is largely cast for the general level of energy use, technology and emissions for the next generation. It will be possible to effect some small changes by 2030, but not a real change in the direction of the country’s economy and energy system.

The China announcement was seized upon by Joe Romm at Climate Progress as a they-see-the-light game changer. Such would be a boost to Waxman-Markey given how unilateral U.S. action is so futile without an about-face in China (not to mention the rest of the developing world that needs to electrify and improve transportation).  But sober analysis suggests that business-as-usual is technology-proven cleaned-up coal, not “clean coal” or large scale renewables.

In our earlier analysis, we assumed that all new coal-fired power plants in China installed after 2016 were the more efficient type described in the Climate Progress post (supercritical or ultra-super-critical) or in the New York Times article. In our analysis, even with the significantly improved efficiency in the electricity sector, additional CO₂ emissions from China total more than 15 times the reduction in US CO₂ emissions by 2030.

Despite all the excitement surrounding China’s environmental announcement, there is not much of substance that is actually new. China promises 1 GW of solar energy generation and 100 GW of wind by 2020 in its green program. This represents about 15% of total 2020 generation capacity, but less than 5% of total energy generated in the power sector. In 2007, before the US had become so enthusiastic about reducing CO₂ emissions, China had planned to have 10-12% of renewable energy generation installed by 2020, a 25% difference from the recently-announced targets. China has an obvious interest in heading off discriminatory carbon taxes on its exports, the type promised (threatened?) by Secretary of Energy Steven Chu. This recently announced program is certainly a part of that effort.

However, the continued high rate of construction of coal-fired power plants, even more efficient ones, will not result in any decrease I emissions of CO₂, nor will the earth’s temperature fall as a result. In other words, like most CO₂ reduction efforts, the impact on climate is likely to fall into the statistical noise of climate model calculations.

Obviously, the Chinese government desperately needs to keep its export machine growing for as long as they can to fuel economic growth. It appears that a good deal of the post touting China’s new policies is more of a government press release that has been reprinted without any critical assessment of the announced Chinese energy policy. It is safe to say, that with exception of a few power engineers, no one in the U.S. understands what grams of coal per kWh mean sin efficiency terms. That is the way energy conversion to electricity is expressed in Russia and other “weight-oriented” economies.[1] It is, unfortunately a term almost entirely without meaning. Coal comes in may different qualities (energy/tonne), so we can be fairly sure that the unattributed reference to the use of grams/kWh for China’s new power plants indicates that we are dealing with a press release not an analysis. In other words, is China planning to do anything in its energy development policies and investments that will deflect it from the path of its planned vast increase in CO₂ emissions?

Improving Efficiency Makes Sense Once You Pay Real Money for Fuel

Perhaps the key data item, the one that really changes the way China looks at energy efficiency, is the one not mentioned in any of the articles touting China’s newly found religion on environment and energy – China is now a net importer of coal. In the very recent past China, the world’s largest coal producer, was also one of the greatest exporters. In late 2007 China became a net coal importer, and now it purchases significant cargoes from Australia and Indonesia. The need to import coal has changed the country’s approach to pricing that fuel. In the past, coal was very inexpensive and little attention was focused on how efficiently or cleanly it was used.

Now, with the need to import more than 50 million tonnes per year at international prices (at an annual cost of at least $4 billion), interest in efficiency has, unsurprisingly, risen. In fact, most of the highly efficient (supercritical) plants described in the Climate Progress or NYT articles use imported coal and international specifications (and equipment) for their new coal-fired power plants. Where less costly domestic supplies are used conversion efficiencies tend to be far lower (and equipment from domestic sources).

So what are the lessons from China’s “enlightenment?” Well, it turns out that subsidizing fuel use is bad for the environment, as well as being bad for the economy. Once China had to start paying market prices for coal in 2007, their interest in using better technology rose significantly. Indeed, it may turn out that projections of coal use based on decades of subsidized fuel prices may well be due for some updating and revision once the consequences of market pricing for coal is better understood in China. In the meantime, we should look at grand plans for subsidized renewable energy use in China exactly the way the market does – with a gimlet eye.

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[1] In the former Soviet Union and its allied countries almost all products were denominated in weight terms (e.g., tones of pipe) rather than natural commercial units (energy, cubic meters per second of gas transmission, etc.).