Green China set to dominate renewable energy boom

Age
Thursday 15/10/2009 Page: 1

Penny Wong could learn much from China's policies writes Mathew Murphy.

CHINA has long been labelled a global climate change villain - unwilling to commit to a firm emissions reduction target and reluctant to reduce its carbon footprint to the same level as developed countries despite being the world's largest emitter of carbon dioxide. This picture ignores the rapid progress China is making in clean energy development. In fact, in many aspects, China leads the world in the fight against climate change.

As Australian Climate Change Minister Penny Wong arrives in Beijing for high-level talks with China's climate-change policymakers, The Climate Group's recent report, China's Clean Revolution II, highlights what the Asian powerhouse is doing, not just for the sake of the climate, but for its own sake. Changhua Wit, the China director for The Climate Group, said the country's climate change image was undergoing a makeover.

"We are definitely a good guy now," she said. "Where have people been? For a long time China was painted as a bad guy. Countries like China and India have been in that category, but starting this year, with more and more information being disclosed to the international community, they are starting to recognise the contribution that China has been making."

China's top leadership had decided to take an alternative paradigm for the sake of the country, Wit said. "Renewable energy is now considered as a strategic element in the country's future competitiveness internationally." One of the first signs that China has chosen a greener path was its 4 trillion yuan ($A646 billion) stimulus package, with almost 40% directed towards green initiatives. That compared with the United States' injection of $US787 billion ($A867 billion), where 12% ($US94billion) was aimed at renewables, building efficiency and low carbon vehicles, a study by HSBC found.

Australia's commitment falls further back, with $US26.7 billion being spent across the country but only 9% committed to climate change investment. That figure was due mainly to the Government's pink-batt policy to insulate 2.7 million Australian homes. South Korea, the 10th-largest emitter of greenhouse gases, has pledged 80% of its $US38 billion recovery package to clean up the country. UN climate chief Yvo de Boer said China's stimulus package would position it as a world leader in fighting global warming, and well ahead of the US in dealing with climate change.

While China eclipsed the US as the largest national emitter of greenhouse gas in 2007, its 1.3 billion citizens are responsible for less per capita than the US and European Union, and below the global average. To help bring that figure down, further energy efficiency is "the number one priority of the Chinese Government", according to Wu. "China's energy efficiency has improved dramatically but still, if you compare energy efficiency levels to other countries, China is still lagging behind," she said.

The Chinese Government has adopted a multifaceted approach to climate change. Its attention to renewable energy has cone about because it has found a market to sell into. The Climate Group report shows that 44% of the world's solar photovoltaic technology last year was produced by China. "With the global financial crisis, the international solar market almost disappeared, so that had a major impact on the industry," Wit said. "About 70% of the industry in China was consolidated by larger companies like SunTech. What is left in the market are only the leading solar companies." In fact, what is happening in China is affecting Australian solar.

Last month, Solar Systems went into receivership. Its planned 154-MW solar PV power station destined for Victoria's northwest has been mothballed, priced out by a country that is manufacturing solar products at a staggering rate and very cheaply. Growth in installed wind turbines is faster in China than in any other country. Wind power in 2008 topped 12 GWs - a figure that is doubling every year. The country has committed to a renewable energy target of 15% by 2020.

This week China Daily reported a senior energy official as saying China would have 100 GWs of wind-power capacity by 2020 - more than three times the 30 GWs target the Government has proposed. China wants to increase its wind energy capacity to 20 GWs by next year, suggesting it will smash the 2020 target. As the road leads to Copenhagen, and potentially a new global climate change deal, China is in an interesting position. If the world signs up to a post-Kyoto emissions reduction target, then China will assist in bringing down the world's emissions with a big role in manufacturing.

With said the Copenhagen deal needed to offer technology transfer agreements, more robustly than in Kyoto, to get China on board. "China is far behind in developing the low-carbon technology, but has a very strong capability in manufacturing the products for the rest of the world," she said. "The Clean Development Mechanism was to enable technology transfer from developed countries to developing countries. But for the last few years it has become clear that the technology transfer has not been significant at all. "Therefore the CDM has not been playing its role and that was the incentive for the Chinese Government to sign up to Kyoto."

Commentators expect a tough fight to get China over the line at Copenhagen but Chinese President Hu Jintao appears to be listening. Last month he vowed to reduce China's greenhouse gases by a "notable margin' by 2020 but warned that his country's economic growth would not be sacrificed and that cuts would be measured in units of gross domestic product. He would not lock in a commitment on how much China would cut emissions by.

Senator Wong today will meet China's key climate change policymaker, National Development and Reform Commission vice-chairman Xie Zhenhua, to discuss the country's strategy leading to Copenhagen. She will also try to sell the proposal she put forward in the US last month for developing countries, such as China, to commit to their own binding set of measures to reduce emissions but be free from internationally determined targets.