Light in the fog

July 19, 2008
 
Cleaning up the atmosphere is a waste of time without China, but it's not all gloom and doom, writes John Garnaut.
 

Each day NASA's Aqua and Terra satellites pass over north-east Asia and take a snapshot of the world's scariest environmental problem. Their photos often show a blanket of soot, sulphur, nitric oxide, ozone and dust that blocks out an area stretching from Beijing in the north to Xi'an in the west and south past the Yangtze River. These toxins irritate the eyes, scratch the throat and lodge deep inside the lungs to cause the premature death of a Chinese person every 50 seconds.

The satellite pictures demonstrate why China's pollution is not just China's problem. In spring and autumn prevailing winds blow the cloud east across Korea, Japan and even Alaska. NASA says 15 per cent of air pollution particles in western parts of the US originated in China, potentially cancelling out improvements in American air pollution controls.

The good news, according to the World Bank and Chinese environmental authorities, is that the Chinese Government is treating the problem seriously and the air in most Chinese cities is getting cleaner. By modern Beijing standards, next month's Olympic Games is likely to be a clean-air event.

Farmers have been banned from burning wheat stalks across most of northern China. Diesel trucks have been pulled off the roads, hundreds of steel mills in surrounding provinces have been closed for the summer and Beijing's army of migrant construction workers will be sent home from tomorrow. And it is starting to show. This week there has been more fog than smog in Beijing and even a few genuine blue sky days. Some improvements will continue after the Olympics.

The bad news is that carbon dioxide, the key climate change molecule that is safe to breathe and invisible to the satellite's eye, is being emitted from China at a rate that makes the developed world's climate change efforts look like a sideshow. China is already the world's largest emitter of CO2 despite its economy being only half or a quarter the size of America's (depending on how economies are measured). Already, China accounts for two-fifths of the world's coal consumption and its appetite for coal is growing at about 10 per cent a year.

Leo Horn, a British consultant to agencies such as the World Bank, describes the short-term outlook this way: "Half of the world's nearly 1000 coal-fired power plants currently in the pipeline for finalisation before 2012 are being built in China, adding CO2 emissions enough to swamp Kyoto commitments by four times."

Beyond 2012, the Stern review predicts China's emissions will double by 2050. But the world has badly underestimated Chinese emissions before and it may be doing so again because of three key assumptions.

First, the Chinese economy is growing much faster than anybody expected and is likely to keep doing so.

Second, China is consuming much more energy for each unit of growth than it did in the 1990s. The first 25 years of China's opening and reform saw radical reductions in energy intensity as enterprises became more efficient. But this trend reversed in 2002 as China returned to heavy industry to help upgrade infrastructure and build new homes for urban migrants.

China now produces more than a quarter of the world's aluminium, a third of its steel and half of its cement. Numbers like these are making Australia and its mining companies rich but creating a new scale of environmental challenge for the world.

Third, surging energy prices are not helping China wean itself away from fossil fuels. Instead, they are pushing it away from expensive low-emissions fossil fuels towards cheaper and dirtier fossil fuels.

"The first effect of the current high prices is to induce a substitution from oil and even gas towards coal, in the absence of a carbon tax, so you would expect emissions to rise very rapidly in the next 20 or 30 years," says Peter Downes, who directed climate change modelling work at the Australian Treasury and now works at the Centre for International Economics.

The Olympics are just three weeks away and Beijing is under more pressure to clean up its skies than any city in history. And yet rising gas prices have forced the city to quietly abandon plans to replace its countless coal-fired stoves and boilers with natural gas.

An internal document drafted in Beijing's Municipal Development and Reform Commission spells out the predicament: "Although gas and renewable energy usage has gone up in recent years coal still accounts for about 80 per cent [of Beijing's energy needs].

"It is simply unrealistic to replace coal with gas and oil in the short and medium term. Partly substituting coal with gas and oil has already resulted in a huge increase in costs and very tight supplies of oil and gas. These are problems that should not be overlooked."

The faster China grows, the faster it turns to coal - a fuel that releases about six times as many CO2 emissions than natural gas per unit of energy. China has already accounted for half the growth in CO2 emissions so far this decade. Using updated assumptions, modeling prepared by Treasury and the Garnaut review says China may double its existing rate of emissions by 2030 - twice as quickly as Nicholas Stern predicted only two years ago.

It is worth remembering that air pollution is not a modern Chinese invention. The London fog of December 1952 killed thousands with sulphur and particle pollutant concentrations many times worse than Beijing has ever recorded. Photos from the time show street lights burning brightly in a midday dark.

There were similar catastrophes in Belgium in the 1930s, Pennsylvania in the 1940s and Tokyo in the 1960s. In all of those

places, public pressure forced governments to clean up the air.

The same is happening today in China. Chinese people place a high value on their health and they are growing more concerned about the environment as they free themselves from poverty.

On a particularly bad June day, an old man on a Beijing street told the Herald: "In the old days we could see the stars at night. When it's like this, I don't let the grandchildren outside. Why are they spending all that money on the Olympics, which has nothing for ordinary people, rather than looking after our lives?"

He knew air pollution was a touchy subject for the government and suggested it would not be "convenient" to publish his name. It is the same for China's many air pollution and medical experts. But much of their work remains accessible online.

Zhong Nanshan, who became a national hero five years ago for blowing the whistle on Beijing's cover-up of SARS, says pollution in Guangzhou was so bad that anyone over 50 had black lungs. The state media says the average life expectancy of a traffic policeman was 43. And Xinhua news agency has finally reported the results of an exhaustive study by the World Bank and the Ministry of Environmental Protection: air pollution is causing the early deaths of 750,000 Chinese people a year.

One difference between China now and the air pollution problems of the US and Europe in the past is that those countries did not seriously tackle environmental issues until they were already rich.

"China is at a much lower level of per capita income today than those countries were in the 1960s, and yet it has already begun serious efforts to reduce water and air pollution and to improve energy efficiency," says David Dollar, the World Bank's China director.

Yu Jianhua, director of Beijing's air quality monitoring centre, says his government is trying to catch up to Western countries. "Over 50 years they have made their air quality good enough," he says. "We started late. We've only had 10 years."

Of late, China's progress in improving the air has been clouded by a suspicion that it has been massaging its figures.

Steven Andrews, an environmental consultant, has gathered evidence from official websites to show Beijing has shut down air quality monitoring stations in highly polluted inner city areas and opened new ones in the cleaner countryside. He also shows an improbably large number of pollution readings just inside the threshold for what Beijing calls a "blue sky day".

The London fog of 1952 was caused primarily by coal-powered home stoves, forcing the government to replace dirty stoves. Similarly, almost half of China's pollution-related deaths are related to indoor air pollution, typically caused by unsafe coal stoves. But China is moving to fix the problem at a much earlier stage of development.

It has already installed more efficient coal stoves in nearly 200 million households over two decades - that is as much as providing nine stoves for every Australian. And now they are starting to replace them all again.

A Beijing government document seen by the Herald shows the government is giving up on its gas plans in part because of rising energy prices but also because it has discovered cleaner coal technology. It plans to replace every coal-stove and boiler in the city with technology designed by an inventor, Wang Yongjiang, and his company EMCo.

Wang's stoves and boilers burn moulded briquettes of waste coal, wood and straw. The coal is burnt twice - from top to bottom then back up again. The process is so efficient all of the usual soot is burnt before it goes up the chimney, while the burning temperature is low enough for the sulphur to be left behind. "With this technology you never see smoke," says Wang. "You can actually put a whole white paper on top of the chimney and it will stay white."

The Beijing development reform commission independently tested the claims against natural gas. It found: "This boiler emits the same level of dust particles and sulphur but its nitrogen oxidant emissions are only half that of natural gas. This effectively means that this is a zero cost solution to our environmental protection problems."

Professor Yao Fei, at the Beijing University of Chemical Technology, says he knows of no other technology in the world that comes close. "This will replace all the coal we currently use in the area," he says.

The Beijing government is throwing enormous tax breaks and subsidies at this technology and other provincial and municipal governments are following its lead.

It is an example of China directly combating air pollution and indirectly assisting the fight against climate change. The country has some of the most ambitious plans for wind, solar, hydro, biomass and nuclear power. Renewables account for 7.5 per cent of China's energy needs and the Government aims to increase this to 10 per cent by 2020.

By that time, energy analyst Joseph Jacobelli estimates China will have increased hydro power by 256 per cent, biomass (excrement) 19-fold, wind 40-fold and solar by 47 times. But coal will be the main energy source for decades.

China is also shutting down inefficient factories. It is reducing energy intensity by 20 per cent over five years. And it is beginning to judge chief executives and government officials against energy and pollution targets. Two provincial governors recently pledged to resign if they did not meet environmental targets. It is a radical departure from policies that rewarded economic growth at all costs.

"It's not very well known internationally but China's Government, private sector and general public are taking very aggressive action on renewable energy and energy efficiency," says Wu Shanghua, who heads the Beijing office of an international non-profit consultancy, The Climate Group.

In all of these endeavours the Government is explicitly targeting health, environmental amenity and energy security. In most cases, reducing carbon emissions is a beneficial accident.

But climate change, too, is working its way to the top of China's policy priorities. Last year it published its first national climate change assessment. It says Chinese temperatures are rising, rainfall is diminishing in the country's dry north, floods and storms are becoming more frequent and severe in the south, glaciers are rapidly retreating and farmers face grave threats.

China's ambassador for climate change, Yu Qingtai, says China is joining the global fight against climate change partly to be a good global citizen but primarily for its own interests. "Australia, Canada and the US put together would not be enough to feed the 1.3 billion people of China - even if you were willing to do so," he says.

China has refrained from committing to any emissions target and there is no evidence that it is calculating its own likely carbon emissions path. Professor Lin Boqiang, of the Energy Research Institute at Xiamen University, says: "I don't want to, because it looks pretty bad."

But the Chinese Government, the World Bank, non-government organisations and Chinese scholars are nearly unanimous about the first priority. "If the rest of the world does not provide help to China right now, then what the rest of the developed world does from now on is insignificant," says Professor Lin.

John Garnaut is the Herald's Asia region economics correspondent.