Green China?

This commentary from the Financial Times looks at how China can achieve its goal of greener growth:

A prescription to advance China’s green ambitions, by Chandran Nair, Commentary, Financial Times: China’s struggle to cope with the environmental consequences of breakneck economic development attracts much attention. Less well understood are the efforts of the country’s leaders to pursue a greener future. After the recent benzene slick at Jilin, President Hu Jintao and Wen Jiabao, prime minister, publicly admonished those responsible. The environment minister was, in effect, sacked.

This reflects new thinking in the communist party’s leadership, which endorsed Mr Hu’s ... push towards “green” gross domestic product at its annual plenum. Ten provinces are already trying to measure and report on “green GDP”, which is at the heart of China’s latest five-year plan... Admittedly, the government hopes to maintain some of the pace of growth; and the National People’s Congress still has to approve the plan next March. But, this is the first time the leader of any large economy has openly placed sustainable development at the head of its agenda. ...

It is estimated that China uses three times as much energy per unit of GDP as the US and nine times as much as Japan. Beijing wants to cut energy intensity by 20 per cent over five years – not easy ... Some worry that, in spite of the pledges, China will still sacrifice all to maintain its growth rate... So how can China achieve its ambitions?

First, ... China should consider implementing the requirements of Kyoto, even though as a non-Annex I country it is under no obligation. By doing this, China would acknowledge its responsibility as the world’s second-biggest carbon dioxide polluter – more important perhaps than revaluing the renminbi – and that these steps were essential for self-survival. Experts ... say [China] has already projected its energy options for the next 50 years, accounting for carbon emission restrictions equivalent to ... the Kyoto formula. ...

Second, China’s leaders could create an internal emissions trading scheme, run according to its own rules. Piloted in the Pearl River Delta and Hong Kong, it could become the world’s biggest within a decade.

Third, China must leap into the hybrid age and then the hydrogen era for car engines. Its staggering projected growth in vehicles perhaps makes it the only country that can make these technologies economically viable...

Fourth, China should link all these through technologies that become integral to its economy and way of life. The China Council for International Co-operation on the Environment and Development has shown that technology can cut China’s carbon emissions while limiting its oil and gas imports to 30 per cent of consumption. .... Focusing on alternatives and in particular clean coal, including gasification, coupled with carbon capture and storage would help achieve both. ...

It will be interesting to see how much China relies on traditional "command and control" policies to achieve its environmental goals as opposed to market based incentive schemes such as tradable permits.