The Paulson Institute’s recently published Rebalancing China’s energy strategy, penned by fellow Damien Ba, provides a high-level overview of China’s energy strategies, policies, choices and trade-offs to 2020.
China’s government has, in recent years, placed greater emphasis on energy policy, explicitly linking energy with economic development.
Last year President Xi Jinping discussed long-term energy policy at China’s top finance and economics council. In so doing, the government highlighted its understanding that managing resource and emission costs must be done within the scope of continued economic growth.
The Paulson Institute report argues that China will seek to exploit technology, smart policies and market incentives to shift China’s energy mix.
The report highlights that up to 70% of China’s total energy consumption comes from coal and
It suggests that despite diversification strategies, reduction in coal consumption will occur over many decades.
China is projected to add a total of 88 gigawatts of additional capacity a year through to 2030.
Ma, who co-authored the book In line behind a billion people: how scarcity will define China’s ascent in the next decade, argues in the Paulson Institute report that the centrality of coal will not diminish, projecting that at least 60% of China’s future energy mix will be coal based even as other sources such as renewables, gas and nuclear grow.
Ma suggests that the recent bi-lateral agreement by China and the US to curb emissions was an important development which provided a degree of insight into future international policy, particularly for the upcoming COP 21 UN conference in Paris.
“The clouds of pollution dust that are now periodically found on the US West Coast, having blown over from Chinese factories manufacturing products for the global market, is just one of many illustrations of how China’s energy and environmental challenge is no longer just China’s problem,” Ma said.
Like the US, China’s position on climate change will reflect its domestic economic, energy and environmental priorities, according to Ma, who is also an adjunct lecturer at the Kellogg School of Management at Northwestern University, Illinois.
“The bottom line is this: China will have to determine how to keep growing while simultaneously reducing environmental and resource costs and emissions,” Ma said.
“That is because the latter will undermine the former, if left unattended. But no silver bullet exists for such a monumental task.
“It will take a variety of solutions – among them technology, smart policies, and various market incentives, to shift China’s energy profile in a meaningful way.”
