Signaling China’s ambition to be the world’s leader in solar energy, Beijing officials announced in January that the country had installed an impressive seven gigawatts of solar power capacity in 2012 and would add an additional ten gigawatts this year. The bold announcement is consistent with the “Green Leap Forward,” China’s goal to assert global leadership in renewable energy and low-carbon development. At the United Nations Climate Change Conference in Copenhagen three years ago, Wu Changhua, China director of the London-based Climate Group, galvanized an auditorium of environmentalists by stating that low-carbon growth had become “mainstream” in China. No longer a fringe industry, clean energy would be transformed into a robust market, with mass-scale production enabling global distribution and bringing downward pressure on prices everywhere. China would become a cornucopia of state-of-the-art, cheap and abundant green technology, all flowing from the enlightened thinking of its centrally planned economy and ambitious energy-savings targets.
But by the end of 2012, even the most optimistic surveys of China’s energy mix showed that low-carbon growth is still nowhere near mainstream. In fact, the clean-tech industry is encountering major obstacles, with government officials admitting to “broad operational difficulties” regarding the latest solar power expansion. For many Beijingers, it is difficult to maintain enthusiasm for China’s so-called leadership in low-carbon growth when the city’s air is rapidly deteriorating. A mid-January reading from the US embassy showed the Air Quality Index at a shocking 728—on a scale of 1 to 500, with 200 considered a serious health risk.
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Three recent developments have shifted China’s tack toward a more fossil-fuel-centered approach and away from the low-carbon model the country pursued under outgoing president Hu Jintao. This trend is dangerous for the entire planet, since China is also the world’s largest emitter of greenhouse gases and will soon have the world’s largest economy.
First, the inauguration of pro-market president Xi Jinping marks a shift away from the conservation-oriented, government-planned approach of his predecessor toward a model marked by increased privatization, including tax cuts for private enterprises, relaxed political controls, programs to boost domestic consumption and intensified resource exploitation. Xi insists that low-carbon growth will remain a priority and that the ambitious energy-saving targets of the twelfth Five Year Plan, issued in March 2011, will be met. But the targets were written in such a way that many of the details for implementation are open to interpretation. While the government had previously signaled that it would rely on growth in wind and solar to meet its goal (11.4 percent of total energy from renewable sources by 2015), it now looks like the bulk of that will come from nuclear and hydroelectric. Wind and solar are growing, but as a proportion of China’s total energy expenditure, coal is growing much faster.
Xi’s environmental pledges have aroused widespread doubts. Two anti-pollution activists, Wu Lihong—who was jailed for publicly implicating the government in the fouling of Lake Tai—and Chen Faqing, recently placed an ad in The New York Times calling on Xi not to abandon China’s ambitious energy targets. Wu was quoted as saying, “Mainland officials are apt to talk about environmental protection, but we have witnessed exactly the opposite…. That’s why we stress the importance of matching their words to their deeds.”
Second, shifts in US energy consumption patterns, as well as changes in estimates of global oil reserves, will affect China’s long-term energy strategy. The International Energy Agency reports that discoveries of shale gas combined with new drilling technologies will make the United States the world’s largest oil producer by 2020. This is expected to make oil reserves in the Middle East and Central Asia newly available to China—which could reverse the shortage-driven incentive structure that promoted growth in China’s renewable energy sector. At the same time, China discovered that it may have the largest shale gas reserves in the world. A Chinese shale gas boom, coupled with increased output from coal and imported oil, could marginalize wind and solar energy. Moreover, with Washington now looking to shale gas rather than wind and solar for new energy resources, prospects for increased US consumption of China’s green exports are diminished.