What About Chinese Energy?

Western cynics often claim that China won’t cut its carbon-intensive coal- and oil-burning, but will stubbornly insist on repeating the same inefficient old technologies that the West once used.

How implausible. How unimaginative. How patronizing.

State Council (Cabinet) member Professor Ma Hong taught me many years ago that without using energy and resources very efficiently, China can’t afford to develop, because supply-side investments will eat the budget, much as coal-hauling already clogs China’s railways. That’s why, in 2005, China’s leaders made energy efficiency China’s top strategic priority—not because some treaty forced them to, but because they wanted and needed to for pure self-interest.

China is building so much new stuff, and making it efficient the first time is so much easier and cheaper than fixing it later, that China could plausibly raise its energy productivity even faster than its economy grows—just as the U.S., already far more built-up and more energy-efficient, did in 2006 without trying or noticing. China already has shining examples in green buildings and efficient factories; they just need wide and rapid emulation.

Exception to the Rule – The Iron & Steel Sector 

Of course this isn’t easy. During 2001–05, energy intensity fell 8% in the United States and 11% in India without a specific government directive to do so, while it rose 7% in China despite one. This stalling and slight reversal of the previous quarter-century’s extraordinary energy-saving progress was only slightly due to new cars and air conditioners. Its main cause was actually the hugely expanded production of energy-intensive materials. Rosen & Houser lucidly explain how China’s iron and steel sector came to use three-fifths more energy than the residential sector, chemicals more than the commercial sector, and aluminum more than the transport sector. But the same societal dynamism that created this problem can also solve it if the fundamental causes of recent structural distortions are recognized and reversed. China can’t afford not to do that, the sooner the better.

The Nuclear Myth

China is already making impressive progress with more benign energy supplies. We hear much about China’s ambitious and implausible plan to quadruple its nuclear power to 30 GW (billion watts) by 2020. The nuclear industry ballyhoos this dream of some central planners (the only folks who buy nukes these days) because it’s by far the biggest nuclear ambition anywhere— enough to offset a tenth of the industry’s worldwide decline as old plants retire. (Global nuclear capacity is slated to fade away—it fell slightly in 2006—as retirements outpace additions.)

Growing Use of Renewable Energy

Yet China has already installed a world-leading 49 GW of decentralized renewable power plants and added another 6 GW in 2006, not counting its 85 GW of big hydro dams (up 7 GW in 2006). In other words, China has seven times as much distributed renewable as nuclear power capacity, and is adding seven times more of it every year—even before its 30 wind-turbine-makers hit their stride. A trillion-watt Chinese wind sector a few decades hence is plausible, given China’s world-class wind resources—enough to meet national electric needs many times over—and strength in cheap manufacturing.

What’s Behind Those New Coal Plants?

What about those new coal plants that China has lately been building every week? Most are shortage-inspired bootleg projects unauthorized by Beijing. But since China’s traditional energy supply is centrally planned while energy demand is largely market-set, China’s institutions are hard-wired to produce excess supply. They have and they will again, including in electricity. Add negawatts to micropower, on top of those new coal plants and giant dams, and China looks headed for a costly power glut.

Why assume, then, that we in the West have all the answers and China has none? It may be the other way around, and if we don’t lead China, China may lead us.

China Poised to Win Green Race?

Last year, in the concluding talk to a China/U.S. Climate Summit, I told our Chinese guests: “Your culture has five millennia longer experience than mine. Your country has five times as many brains as my country—quite possibly better ones. About 90% of the technologies that underlay the Western Industrial Revolution were invented in China. China is the only nation on earth to have cut its energy intensity 5–8% a year for 25 years (through 2001). China is the only nation on earth to have made energy efficiency its first priority for national development. To be sure, implementa­tion is still at an early stage and presents many big challenges; heaven is high and the emperor is far away. But you have a better policy founda­tion for energy efficiency than we do in America, you have more capable paramount leaders, you’re more highly motivated, and you work harder. For all these reasons, I think we can rely on China to lead the world out of the climate mess.”

Why not? Wouldn’t such leadership by the Green China that New York Times columnist Thomas Friedman sees emerging be really cool? And shouldn’t we Americans be competing to do it first, because it makes sense, makes money, and helps these two great nations inspire each other? 

Stay tuned for more solutions!

Amory B. Lovins, Chairman and Chief Scientist, Rocky Mountain Institute