A recent report on China air quality from Berkeley Earth is a reminder of the human and economic toll of China's unbridled environmental degradation. Air pollution is costly to fix, causes hundreds of billions of dollars a year in health care costs, reduces agricultural productivity, and dramatically reduces quality of life across China. In Beijing alone, breathing the air is equivalent to smoking 40 cigarettes a day. As many as 1.6 million deaths each year across China can be attributed to air pollution. In the North, the epicenter of China's environmental degradation, 500 million people have seen 5.5 years shaved off of their lives due to coal burning.
For decades China's rapid growth has been akin to a marathon runner that hasn't stopped at any water stations, running at a fast but physically unsustainable pace. The very tangible problems of pollution and the high costs associated with environmental degradation finally caught up over the last few years.
China's runaway pollution from rapid growth came to a head in 2013. That year a number of incidents known as "airpocolypse" pushed the environment to the top of the list of reasons for public dissent, beating out land expropriation as the number one cause of protests. In 2014 Li Keqiang announced China's "war on pollution". That war will be costly, but has lead to the most ambitious green energy effort in history. The government has outlined plans to spend $275 billion on efforts to reduce air pollution between 2013 and 2017.
China's response to pollution will cost hundreds of billions, if not eventually trillions of dollars to fix over time. China's war on pollution is driving the country to ambitious investments in renewable energy. According to the EIA China invested $89 billion in renewables in 2014, a 31% rise from 2013. The US spent $52 billion by comparison that year. The breakneck renewable investment growth will continue over the next 5 years to reach emission and renewable energy usage goals.
Beijing policymakers have also turned their attention to environmental law enforcement. This year China has set up more than 130 local environmental courts. Recently the Supreme Court established an Environmental and Resources Tribunal and has appointed a senior judge to handle cases in an effort to improve law enforcement and guide lower courts. Enforcement will see pushback from entrenched interests and probably see less success in curtailing pollution than results from renewable spending outlays.
China Total Primary Energy Consumption by Fuel Type 2012
By far, China's main air pollution culprit is its heavy reliance on coal. Coal supplies almost 70% of China's energy needs. China burns more coal than the rest of the world combined, with 22% of the world's population. China built its heavy industries on the back of cheap coal, and now coal reliance has become one of the country's biggest burdens. Much of the coal burning and metal smelting activity takes place in the North, surrounding Beijing. As with water pollution, the epicenter of China's pollution is in and around the North China Plain, home to some of the country's most densely populated and economically strong areas such as Beijing and the Shangdong province.
Last year was the first time this century that coal output fell, with output declining 2.1% for the year. China National Coal Association expects another decline of 2.5% this year as well. Coal imports (by volume) also declined over 20% over the last year. Beijing's goal is to reduce coal usage to 62% of total energy consumption by 2020. The decrease from 66% to 62% is a difficult undertaking, but still suggests rampant coal burning will persist for some time, and so will its effects on air quality.
The development of China's auto industry has also resulted in air quality reduction. Auto emissions account for about 25 percent of the pollution problem by many estimates. Chinese now own more than 120 million passenger cars and another 120 million other vehicle types.
I lived in China a decade ago, in the Anhui province, and recall months going by without seeing blue sky or the sun. Even the days with blue sky were very grey. I frequently travelled to a city called Tongling on business, a city known for its copper smelting. On a monthly basis I suffered from coughs and sinus problems that lingered. When I went for my morning jog my lungs burned after a while. One of my most memorable arguments I had in China was with a friend who was certain that the blue sky in a number of scenes in the movie Elizabethtown, which takes place in the US, must have been created by special effects and could not be real.
Facts and details about China's air pollution problem:
- A study by Berkeley Earth monitoring 1,500 measurement stations over four months concluded that 17% of Chinese deaths each year can be attributed to air pollution. That is 1.6 million citizens a year. That is 180 deaths each hour from air pollution alone. That number was more than double the estimated 650,000 deaths attributed to air pollution by the WHO in 2007. The researchers estimate that 38 percent of Chinese residents were regularly exposed to air that was unhealthy to breathe.
- China's own Minister of Health claimed in 2013 that 350,000 to 500,000 deaths a year could be attributed to air pollution. As a side note, when I lived in China years ago a Chinese co-worker once told me that as a rule of thumb, Chinese people assume that bad news from the government is always about four times worse than announced.
- A Rand Corporation paper in 2012 concluded that China's air pollution costs roughly 6.5% of GDP in health costs ($535 billion in that year). Spending to fix air pollution will have the effect of rolling back some of those expenses.
- In 2013 a number of pollution problems, commonly reffered to throughout the year as "airpocolypse", led to social dissent and eventually the 2014 "War on Pollution". By 2014 the dissatisfaction with China's environmental problems pushed pollution to the top of the reasons for civil unrest, with 30,000 to 50,000 "mass incidents" of protest every year.
- In 2014 He Dongxian, an associate professor at China Agricultural University's College of Water Resources and Civil Engineering, reported that if China's smog problem persisted China's agriculture would suffer conditions very similar to nuclear winter as pollutants severely impede photosynthesis.
Key points on China's ambitious renewable energy investments:
- China invested $89 billion in renewables in 2014, a 31% rise from the year before.
- The most ambitious renewable push comes from solar energy. The solar installation target of 17.8 GW for 2015 is 70% higher than 2014, requiring $29 billion in investment.
- China's NDRC is aiming for 200 GW of wind capacity by 2020 from a total cumulative capacity of 115 GW capacity at the end of 2014, an average increase of 15% per year for the next 5 years.
- Renewable expansion will require more transmission and grid improvements. Electrical grid investment is expected to rise 24% this year to $68 billion.
- Hydro power remains China's main go-to renewable, accounting for 8% of total energy at 230 GW. Hydro power is expected to increase to 350 GW by 2020, over 10% a year on average. Environmental concerns and displacement difficulties may lower the potential growth rate of hydro.
- Nuclear expansion slowed after Japan's Fukushima accident (as with many other countries), and Beijing is targeting 58 GW of capacity by 2020.
Top Solar Markets 2015 as % to Total
China has increasingly ambitious plans for solar expansion. In 2015, Beijing is targeting 17.8 GW of solar installations, 70% more than the 10.5 GW of installations in 2014. Here are some solar power developments:
- 5.04 GW of installations have already been completed in Q1 2015. This brings China's total cumulative installations to 33.12 GW. Already this year solar capacity has increased 18% in one quarter.
- 2015 solar targets are expected to require a total investment of over $26 billion.
- If built as a utility-scale plant, 17.8 GW of solar capacity would cover over 70 square miles of land.
- Total global solar investment in 2014 amounted to $149.6 billion, and forecasted growth for 2015 is expected to be 30% higher than last year, according to IHS.
- China is the largest market for solar in the world (see chart on the right).
- China has the world's largest wind energy capacity installed, roughly 115 GW according to the China Wind Energy Association. But, according to official statistics only 96 GW is connected to the grid.
- China has the largest wind energy capacity, but the US is the largest generator of wind power.
- NDRC is aiming for 200 GW of wind capacity by 2020, an average increase of 15% per year.