It is hard to miss the
staggering statistics when it comes to coal in China, which now consumes nearly
as much coal as the rest of the world combined. Unrestricted growth in coal
consumption in the last decade has led to the worst air pollution in recent memory,
with citizens in northern and central China breathing in higher levels of
hazardous air pollution this past winter than if they were living in an airport
smoking lounge. Coal mining and combustion also cause serious water and soil
pollution, including the release of toxic metals like mercury and arsenic.
Unless things change, there are plans to build even more coal-fired power
plants in the future -- some 558 GW worth, which would be a 73% increase over
China’s 2011 thermal power plant capacity.
The impacts of coal
mining and consumption on China’s environment, public health and the economy
are already astronomical: from January’s “airpocalypse” to the existence of
“cancer villages” and 3.5% in GDP losses (in 2010 alone), this dirty and
unsustainable energy source has catapulted to the center of attention among
Chinese citizens and leaders alike. Given coal’s heavy costs, China’s leaders
are paying close attention to coal and have sought now seek to reduce coal
consumption and pollution by introducing a suite of policy measures,
including:
- Establishing pilot carbon emissions trading programs in five cities (Shanghai, Beijing, Shenzhen, Tianjin, and Chongqing) and two provinces (Guangdong and Hubei). Shenzhen’s carbon trading program starts June 17 and will cover 638 companies responsible for 38% of the city’s emissions. China is also continuing to develop its low carbon pilot cities and provinces program.
- Capping total energy consumption at 4 billion tons of coal equivalent by 2015, although this is a non-binding target and no penalties are in place yet for non-compliance.
- Considering a tax on resources, including coal, in order to account for the environmental costs of coal and shift investment towards clean energy.
- Finalizing new emissions control limits for six heavily-polluting industries. China’s power sector accounts for about 50 percent of its coal consumption and emissions, and heavy industries such as iron and steel, cement and coal chemicals also constitute a large share, causing major climate and air pollution.
- Planning regional coal consumption cap pilots in key regions such as Beijing-Tianjin-Hebei, the Pearl River Delta, the Yangtze River Delta and the Shandong city cluster as part of China’s “Twelfth Five Year Plan for Air Pollution Prevention and Control in Key Areas (in Chinese).” The pilots are aimed at bringing much-needed regional cooperation and coordination to reduce key air pollutants by 2015, including cutting PM 2.5 by 5-6 percent. But as with the total energy consumption cap, the details and penalties for non-compliance are still unclear.
While these are all
critically important policy measures, the underlying challenge remains that
China consumes too much coal overall, and much more needs to be done to reduce
coal consumption to a level compatible with China’s and the world’s long-term
sustainable development. Global carbon dioxide levels have now passed 400 ppm
and will continue to grow rapidly if countries do not wean off fossil fuels and
scale up cleaner energy sources. And as the world’s biggest emitter of carbon
dioxide—spewing out 10 billion out of the global total of 38.2 billion tons in
2011—China is a key player in the future of sustainable development.
Although scaling up
alternatives to coal may seem a formidable task, we believe China can develop
the policies and technologies needed to cap and then cut its coal consumption
in the next decade. We are working with government researchers, academics, NGOs
and others to develop an effective and enforceable coal cap policy that will
address the severe pollution and health impacts from coal while providing
cleaner energy sources for China’s economy. Such a program could begin at the
city and regional levels, where coal consumption cap policies are already being
developed, and ultimately scale up to a national binding target that is
incorporated into China’s future Five Year Plans.
Here are five key
components of NRDC’s coal cap strategy:
1. Work with the
largest coal consuming sectors and regions to help them develop integrated
plans for capping coal use through more efficient technologies, fuel switching
and closing outdated production capacity. In order to address coal consumption,
it will be important to work with the largest coal-consuming sectors (power,
iron and steel, cement, and chemicals) to find ways to scale up more efficient
technologies such as combined heat and power that can reduce coal consumption.
These sectors should be required to install and operate pollution control and
emissions monitoring equipment when consuming coal, and should be incentivized
to switch from coal to natural gas and renewables in order to reduce their
emissions. Plants with smaller and less efficient boilers and other equipment
should be phased out or required to use natural gas.
Similarly, those cities
and regions that face the worst air pollution from coal should be the focus of
efforts to pilot coal consumption caps and to develop plans and policies for
capping and reducing coal consumption in the next five years by scaling up clean
energy sources and developing lower carbon economies that do not rely as much
on heavy industry for development.
Focusing on these key
sectors and regions and showing that they can begin to limit their coal
consumption will help to develop the policies and experience needed to reach a
national coal cap policy.
2. Strengthen
enforcement of coal consumption and emissions targets and standards through
improved data and enforcement tools. Strengthening data on coal production and
consumption and emissions from coal consuming facilities is key to providing a
foundation for implementing a coal consumption cap and related policies such as
a resource tax or carbon trading, and for enforcing emissions standards. Online
emissions monitoring systems should be installed on all power plants and
industrial facilities over a minimum size, with public reporting of data and
penalties for false or inadequate reporting.
It is also important to
strengthen the use of pollution permits and environmental impact assessments to
manage the impacts of high coal-consuming projects. These tools should provide
a way for the government and the public to supervise emitters’ compliance with
coal consumption targets and pollution standards, pushing them to find ways
during project planning to reduce emissions and health impacts to the lowest
extent possible, including by reducing consumption of coal and increasing use
of cleaner energy sources.
3. Continue to scale up
energy efficiency and renewable energy: China has made significant progress in
energy efficiency but still requires about twice as much energy as the world’s
average to produce one unit of GDP. We
have been working to scale up demand side management programs to improve
efficiency in industry, and have also been promoted policies and standards to
improve building energy efficiency in China. Meanwhile, China is already the
world’s largest investor in renewable energy, leads the world in wind power
capacity and solar hot water heating, and plans to increase its use of non-fossil
energy (nuclear and renewables) to 15 percent of primary energy consumption by
2020 (including 200 GW of wind power and 50 GW of solar power). However, China still faces technical,
economic and regulatory challenges that are preventing it from fully utilizing
its efficiency and renewable resources, which will require cooperation and
support from international partners to help develop best practices for market
transformation.
4. Develop responsible
standards and best practices for shale gas and nuclear power development: China
reportedly has nearly 50 percent more “technically recoverable” reserves of
shale gas than the U.S., and has ambitious plans to develop its unconventional
gas resources. While natural gas is much less polluting during combustion than
coal, unregulated hydraulic fracturing (or “fracking”) consumes a significant
amount of water and has the potential to cause water pollution, high methane
emissions, and other environmental damage. We’re working with policymakers in
China to learn from best practices for environmental protection in the U.S., so
that China can develop this resource as safely as possible. Similarly, we are
providing policy recommendations to help strengthen China’s nuclear safety
regulatory system post-Fukushima.
5. Help to implement
carbon trading and carbon tax pilot programs: In addition to mandatory coal
consumption cap targets for local governments and enterprises, it will be
important to begin to develop market and fiscal mechanisms such as carbon
trading and/or a carbon tax, in order to price carbon to send a signal to the
market to shift investment from fossil fuels to low-carbon energy sources.
Developing these market and fiscal measures to price carbon will depend on
accurate data on coal consumption and regulation of emitters. It will also be
important that government revenues from pricing carbon through either carbon
trading or a carbon tax be used to provide incentives for energy efficiency and
renewable energy in order to spur the investments needed to scale up low-carbon
energy.
Establishing a binding
coal consumption cap policy adds a critically important lever to existing
climate and energy policies in China. Capping coal will not be an easy task,
and will require both applying pressure and providing incentives for both
industry and government officials to act. Doing so will not only clean up
China’s air but also conserve water and land resources, reduce water pollution,
and alleviate transportation pressures, all of which will help secure a
healthier future for China’s citizens, environment and economic growth.
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