Foreign Affairs

China’s ‘business of greening’, and what it means for the world

As a country with massive energy requirements and a top-down approach to action, China is in a unique position on the issue of climate change - and the motivations behind its shift to renewable energy will benefit the rest of the world, one expert says.

In many ways, China seems a paradox when it comes to climate change.

As both the world's largest consumer of coal and the biggest manufacturer of solar panels, it is simultaneously a major threat to future generations and a potential source of their climate salvation.

Without the democratic dimensions of the climate debate that have slowed action in some nations, the CCP has been able to push ahead with change - for reasons of self-interest as much as moral values, but change that may nevertheless benefit a number of other countries.

China's work on climate action, and what it means for the rest of the world, was at the centre of a conference this week run by Victoria University of Wellington's New Zealand Contemporary China Research Centre.

John Mathews, a professor of strategic management at Macquarie University, said China’s move to a green growth economy was driven more by its scale, which made the use of renewable energy and a circular economy “an inescapable choice”.

“It’s moving to green its economy not so much because of a moral or ethical imperative, but because of an energy security and resource security imperative.”

Mathews said China’s rise as a manufacturing power came later than other nations in history, which opened up new opportunities for the country as the industry grew.

John Mathews says China's "special aptitude" for manufacturing is driving much of its decisions around renewable energy sources. Photo: Sam Sachdeva.

“If China were to attempt to industrialise in the same way as other wealthy countries today...then it would run up against impossible geopolitical limits, and instead to evade those limits we see China actually moving to renewable energies in place of fossil fuels, circular flows of materials.”

A fossil fuel dependency would “spell ruin for China”, widening the gap between its production and consumption making it reliant on supply from countries that were increasingly unstable.

Renewable energy sources were a logical choice for the country not because they were low carbon but because they were a product of manufacturing, where it had “a special aptitude” and could therefore control its supply domestically.

While China had secured energy from “the burning of coal on a colossal scale”, its size meant that was untenable in the long term, and there had been a dramatic reduction in consumption in recent years.

The country was doubling its wind power capacity every two to three years, with energy generation from water, wind and solar sources responsible for more than a quarter of its electricity generation.

“These are historic dimensions...this is the green face of China, not the black face that people focus on.”

China was still outpacing the OECD in the use of natural resources and had a long way to go before it caught up to advanced countries, but had already found that “urban mining” of valuable materials like copper from recycled material was more cost-effective than the virgin mining of resources from Africa or South America.

Pan Jinhua said China hoped to peak in CO2 emissions before its Paris commitment of 2030. Photo: Sam Sachdeva.

Mathews said China’s use of green bonds to finance environmentally beneficial projects was also notable, as it became increasingly clear that capital markets, rather than public funding, would drive a transition to a green economy.

“The OECD looked at the scale of the capital markets and you see over $70 trillion under management in the capital markets, sovereign wealth funds, insurance companies, and the rest, so that's how we can finance this great transition."

Pan Jinhua, the director general of the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences, said China had been “very proactive” on the issue of renewable energy with encouraging results at an early stage.

“We do it ourselves for our own benefit.”

Pan said the country had included climate targets in its recent five-year plans, and had hopes of doing better than its Paris climate deal pledge to peak its CO2 emissions by 2030.

It had been a coal-dominated economy, but was reducing its coal consumption at a faster rate than anywhere else in the world.

China had also benefited from the steep “learning curve” attached to renewable energy technologies, with costs dropping quickly as uptake increased.

* Victoria University of Wellington is a supporter and sponsor of Newsroom.

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