To say that China stands out would be an understatement. With around half of the global installed PV capacity, more than half of PV manufacturing, and some of the most aggressive policy incentives, China seems like a renewable energy champion. It’s easy to think of many possible metrics of “climate leadership” in which China would come out on top.
But wait, this doesn’t match the role we’re accustomed to associating with China. These numbers can be explained by economic opportunism, cheap labor, and a manufacturing industry that disregards all environmental impacts, right? I mean, when we think climate champion, we think of someplace like Germany – vegan‐friendly, all‐electric, pro‐recyclers, etc. – an environmentalist’s paradise. That doesn’t match our conception of China.
So, this leads us to this article, an attempt to reconcile this juxtaposition within our own perception. What should we think about China?
The answer depended on who we asked, but most of our interviewees followed the same general line of thinking.
For starters, Lili Pike of China Dialogue tells us that climate denial has been largely absent from Chinese politics. She explains that many policy makers have science backgrounds, making it hard for them to be unaware of the very real and imminent impacts of climate change. This simple fact gives a certain irony to any criticism coming from those of us who live in a country where many of our elected politicians deny the existence of climate change, spread misinformation about it, and actively resist climate initiatives.
The Chinese government understands that the country will be hit hard by climate change, adds Pike, especially on the east coast where a large portion of its 1.4 billion people live. So, we can be sure that climate change is a driving factor in the government’s decision‐making, as evidenced by the ambitious targets in their five‐year plans.
Despite Chinese recognition of climate change, most of the public dialogue remains centered around pollution. This is because pollution has become an increasing point of concern among citizens, who have responded by putting pressure on the government. According to Pike, this pressure is a driving force behind emissions reductions.
Ted Feierstein, of Trina solar in Shanghai, adds that pollution poses a risk to social stability, so it’s pragmatic of the CCP to publicly and actively work to address it as a priority. And although in some sense the Chinese see renewable energy as just another manufacturing industry, he stresses that people there don’t just see it as self‐serving; they believe in climate change and want to take action.
Another interviewee (who asked to remain anonymous) explains that public pressure helped create a pollution tax that forces all emitters (coal power plants included) to pay a fee for certain pollutants. Unfortunately, CO2 isn’t included yet, but the state is implementing a carbon market with trading scheduled to begin in 2020, Pike tells us. The government is also attempting to seriously reduce the energy usage of its industrial sector by replacing old equipment, capturing waste heat, and phasing out its most energy intensive industries entirely, according to an international NGO that preferred not to be identified.
Sidenote: on more than one day of our week in Beijing the air quality was worse in certain parts of LA!
So, what happened to the uncompromising industrial machine that we always pictured as China; the one that disregarded its environment, skipping on regulations to dominate manufacturing industries? Well, we can speculate that the surmounting evidence of climate change, international pressure, and worsening pollution all played a role. Our interviewees also pointed to a rather straightforward correlation with another factor: economic development.
As Rhea Tsao of EnergyTrend puts it, money simply leads to eco‐friendly policies. That is, we see increased environmental responsibility and transparency precisely because the country has reached a certain level of development. Pike echoed this, saying that as countries become more developed citizens ask for a higher quality of life.
China’s impact isn’t limited to its geographical borders. Another way to judge China is by the actions of its central banks and state‐owned enterprises (SOEs) in the international market. According to Pike, these banks and SOEs are the main players in Chinese overseas market, and the government can theoretically exert more control over their behavior compared to private enterprises.
What does this system of banks and SOEs do best? Coal, gas, and large hydro—despite the domestic advances in renewables, the energy development that China is exporting is still dominated by the old big three.
This phenomenon hasn’t gone unnoticed by the international community, eliciting some criticism. When China has addressed the criticism, it has often asked the question: if other countries are going to inevitably develop fossil fuel power plants, isn’t it better for them to use Chinese “clean” coal and gas technology? While this argument is disheartening, it has historically held enough economic logic to deflect some international pressure.
With the most markets approaching grid parity (the point at which renewables are as cheap as conventional sources), however, this argument is holding less and less weight. There’s evidence that China recognizes this; Pike tells us that a Chinese climate official recently said that they want international projects to start being held to same standard as domestic projects. If this becomes the case, there would be big implications for the global renewable energy market, particularly in developing countries.
One way China is intending to start pushing developing markets toward renewables is through it’s South‐South cooperation fund, which was set up to provide aid to other developing countries. The fund’s climate aid component has been expanded in recent years, with about $3 billion USD additional funding pledged in 2015.
But the South-South fund is still small compared to the scale of SOE global energy projects and investments, and, unfortunately, it’s also not as simple for the SOEs and state banks to switch to solar and wind. The system is set up for long-term capital and labor intensive projects, which solar and wind are not. It remains to be seen how these organizations will adapt, but we can hope that international pressure and changing markets will accelerate the process.
So, what should we think about China? Obviously, like every country, China is a complicated entity in which we can find many positives and negatives. We can’t simply say China was bad and now is good.
It’s also important to point out that the question, “To what extent should we overlook the past?” is also being asked of developed countries by climate activists, the UN, and developing countries. The qualification of “climate responsibility” is far from an exact science and the question of who benefited from what always yields a web of connections — scores of American companies (and therefore American consumers) benefited greatly from the environmental disregard in China, for example — how do we quantify this?
In any case, our conversations surrounding this topic taught us a great deal about the intricacies of China’s “green” development and international influence. Again, we thank all of our interviewees for their generosity and insightfulness.