Editor's Note: The views and opinions expressed in this article are those of its author and do not reflect or represent the official views and opinions of the Global Research and Consulting Group, its branches, nor its management team.
The current state of China’s environment is dire. This is a country where smog kills an estimated 1.1 million of its residents a year, the number of pollution sources has risen by 50% in the past decade, and rural unrest is exacerbated by environmental degradation, poor air and water quality, and lost farmland. Despite these jarring statistics, the government has also made huge strides in repairing its broken environmental situation.
Renewable energy infrastructure is an area in which China has made some of the greatest leaps. Hydropower accounts for the greatest fraction of renewable energy in the country, but other sources of power are slowly catching up. In 2016, the nation added 35 gigawatts of solar generation capacity. For comparison, Germany, the next largest photovoltaic installer, had 41.3 gigawatts total at the end of 2016. However, solar is not the only area where China experiences rapidly accelerating growth.
Every hour, another wind turbine is erected and ethanol-based biofuels and biomass play a huge part in daily items like automotive fuel.
This development is necessary, as coal is the source of an estimated 40 percent of the most dangerous pollution particles in China’s air. Though the nation is making strides in the right direction (coal consumption fell in 2016 for the third straight year), China still accounts for half of the world’s coal consumption.
The struggles in transferring energy sources lie in both bureaucracy and implementation. A decentralized authorization structure encourages provincial officials to build unnecessary coal-burning infrastructure that have already been vetoed or delayed by the federal government.
Meanwhile, construction of transmission infrastructure lags behind, and on a few occasions, wind turbine fields have lain unused due to lack of transmission cables, or citizens have faced heating shortages as coal burners have been removed before natural gas can be transported to their residences.
In other respects, China has also made strides in environmental reparations. Xi Jinping’s government has made myriad changes to standardize and tighten environmental regulations. For example, polluters will be charged between 1.2 and 12 yuan for every 0.95 kg of nitrogen monoxide or sulfur dioxide they emit.
Other incentives reward producers with tax cuts for choosing renewable sources of energy or punish energy-source non-compliant firms by demanding they pay compensation to grid companies. Sanctions against firms that violate Xi’s environmental regulations include fines, loss of equipment, and power shutdowns.
In the end, as a result, smaller companies are far more likely to be hit by these penalties; big corporations have the funds to easily become compliant and benefit from reduced competition in their sectors.
In fact, several companies in the Beijing, Tianjin, and Hebei regions that violated zoning and environmental standards have been shuttered.
The economic repercussions will reverberate through other industries as well; cement, aluminum, and spandex prices are predicted to increase as a result of more stringent regulation and lessened competition. In continuing years, as measures continue to be taken against those responsible for China’s environmental situation, more economic ramifications will become apparent.
Big corporations have the funds to easily become compliant and benefit from reduced competition in their sectors.
China’s goal is to source 35% of its energy from renewable sources by 2030. This will be a tall order for a country whose carbon emissions are forecasted to peak that same year. The greatest challenge for China’s green future will be persuading producers and consumers alike that current practices must be changed, even though there will be great individual costs.
This is no small feat for a nation recently enriched by manufacturing, outsourcing, and technological innovation, but for the future of China, and the rest of the world, it will be necessary.
By Chelsea P. Cao