Fighting pollution, securing energy: what is driving China to become a renewables superpower?
May 31, 2017
China is the world’s largest emitter of greenhouse gases, and the largest builder of coal-fired power stations on the planet. But that is only half the story, as China is embarked on a huge industrialization effort that accomplishes in a few short years what Europe, the US and Japan took decades to achieve. The other half of the story is that China is also building a green power system and green industrial system that dwarfs that of any other country. Three charts tell the story, as outlined in the latest contribution from Hao Tan and myself (‘China’s Continuing Green Shift in the Electric Power Sector: Evidence from 2016’, Asia Pacific Journal: Japan Focus, May 2017). The first indicates how China’s investment in renewable power capacity (from water, wind and sun) has now reached over a third of the country’s total capacity, and it is rising steadily upwards.
Figure 1. China: Trends in power sources generated from Water, Wind and Sun, 1990 to 2016. Source: Mathews and Tan (2017)
The chart shows that China increased its power generating capacity from green sources, up from 20% in 2007 to 34% in 2017. This is an improvement of 14% in a decade – a huge change in a system as vast as China’s electricity generating system (the world’s largest). If continued (and there is every reason to suppose it will be) this would mean that China would the world’s first major industrial country to have an electric power system that is more green than black within another decade — by the mid- to late-2020s.
The second chart shows that China is by far the world’s largest builder of green power systems. By 2016 it had constructed 558 billion watts of generating capacity from WWS sources – that’s over half a trillion watts – compared with just 202 GW for the US, 97 GW for Germany, and then lower levels for everyone else.
Figure 2. China’s generation capacity from WWS sources compared with other leading industrial countries, 2016. Source: Mathews and Tan (2017)
In the third chart I review China’s recent investments in green power compared with those of the European Union. In 2016 the London-based consultancy E3G published a chart revealing the widening gap between China and the EU. China invested over $110 billion in clean energy in 2015, compared with just $40 billion for the EU – outranking the EU 2.5 times. China’s investment overtook that of the EU in 2013, and has strengthened each year since then – while EU investment has actually declined. Per capita investment by China also overtook that of the EU in 2015, while China’s investment in clean energy as a proportion of its GDP has already reached 1% — compared with less than 0.3% for the EU.
Figure 3. Clean energy investment, China vs EU, 2005 – 2015. Source: E3G
So if China really is becoming the world’s green energy superpower (and all the evidence points to this) then the question arises: what is driving this phenomenon? No doubt concern over climate change is one of the factors – and it is significant that China was one of the first countries to sign up to binding reductions in carbon emissions as part of the 2015 Paris Agreement, and is now one of the staunchest defenders of the Agreement, in face of waning interest and commitment on the part of the US under the Trump Administration. But while China’s building of a green power system at such scale is the world’s most significant contribution to reducing the threat of climate change, it is probably not China’s principal motive.
In my new book Global Green Shift, I argue that there are even more pressing immediate issues facing China and that these constitute the real drivers of its green shift. The first is the immediate and terrible pollution problems that are clogging the air, water and soil in China. A greening of the electric power system, and beyond that of industry, transport and housing, is the most effective way of reducing this terrible pollution and its toll on human health. The second and equally effective driver is the concern over energy security. With the world’s largest power generating system and the world’s largest consumer of coal, China has every incentive to reduce its dependence on fossil fuel imports, with their crushing impact on balance of payments, and their prospects for tying China up in geopolitical entanglements that could lead to war, revolution or terror (or all three).
The world has emerged from a century of oil wars, and if China and India and other industrializing countries were to embark on a 100% fossil fuelled industrial pathway then this would mean another century of even bloodier oil wars and oil pollution disasters, plus the impact of coal and gas on geopolitics and health. So the evidence points to China making the sensible calculation that the best way to avoid the geopolitical limits imposed by fossil fuels is to embark on a comprehensive green energy strategy. It is no small matter that such a strategy enhances energy security because a country can manufacture its own renewable energy devices, and that by so doing it builds an export platform for the future. These issues are not lost on China. It is the industrial dynamics of this strategy, and the capitalist competition and entrepreneurial opportunities opened up by the global green shift, that should be of greatest interest to business schools and centres for the study of the social sciences.