China’s rapacious coal plant building is neither moral nor sustainable, as discussed in Part I. Yet many supply-side alternatives, like nuclear and hydro, are problemmatic for the country.
What should China do to satisfy its insatiable thirst for energy? Go back to their amazing energy efficiency policies of the 1980s and early 1990s.
China’s energy history can be divided into several phases, as we learn from Dr. Mark Levine, co-founder of the Beijing Energy Efficiency Center (see terrific video here).
The first phase (1949-1980) was a “Soviet Style” energy policy during which there were subsidized energy prices, no concern for the environment, and an energy use that rose faster than economic growth (GDP).
The second phase (1981 to 1999) was “California on steroids,” when the country embraced an aggressive push on energy management and energy efficiency, surpassing the efficiency efforts California achieved since the mid-1970s. This came about as a result of Deng Xiaoping heeding the advice of a group of leading academic experts who suggested a new approach to energy. Chinese strategies included:
- factory energy consumption quotas and energy conservation monitoring
- efficient technology promotion and closing of inefficient facilities
- controls on oil use
- low interest rates for efficiency project loans
- reduced taxes on efficient product purchases
- incentives to develop new efficient products
- monetary awards to efficient enterprises
- strategic technology development and demonstration
- national, local, and industry-specific efficiency technical service and training centers
During the mid-1990s, China also began dramatic energy price reforms, which led to higher prices for coal, oil, and electricity. China’s policies kept energy growth to a modest level during a time of explosive economic growth. For instance, from 1990 to 2000, their economy more than doubled, but carbon dioxide emissions rose by only one fourth. Remarkably, during the 1990s, the United States actually increased its annual emissions of carbon dioxide more than China did.
Unfortunately, toward the end of the last decade, China scaled back or eliminated many of its efficiency efforts, leading to the third phase of the country’s energy history (2000 to present), “Energy Crisis.” China’s energy demand growth began soaring again, rising much more rapidly than GDP. As of 2005, China was burning twice as much coal as the United States. China now consumes more than twice as much steel as the United States, and produces nearly as much cement as the rest of the world.
They need to bring back a serious efficiency effort, while aggressively pursuing low-carbon or zero-carbon supply options. Or we can kiss a livable climate goodbye.