Gal Luft
By Gal Luft
Many of us have nostalgic memories of waking up on winter mornings to welcome news of a snow day, allowing us to skip school or stay under the blanket for a few more precious hours. As temperatures drop in the Chinese mainland, schoolchildren there have become acquainted with their own version of a snow day: The smog day, which occurs when schools and workplaces shut down due to hazardous levels of pollution and heavy haze. But you can’t make smog angels. Indeed, citizen discontent at China’s off-the-charts environmental degradation is quickly growing into a potential menace to the ruling Communist regime. Issues like unmet demand for political rights are no longer the party’s only existential threat.
In one symptom of China’s growing environmental menace, city-wide shutdowns are becoming the new normal. In January, a thick blanket of soot descended on Beijing, bringing life to a near halt. In October, the level of pollution in Harbin, a city of 10 million in northeast China, exceeded the level acceptable to the World Health Organization by a factor of 40; schools, roads and airports were forced to close. In early December, an entire swath of central and eastern China — Jiangsu, Zhejiang, Anhui and Henan provinces — suffered a bout of heavy and dangerous pollution.
In Nanjing, a city of eight million, schools, ferries, highways and airports shut down. And in Shanghai, China’s financial hub, visibility was reduced to a several feet for much of early December, as many covered their faces with masks and authorities issued warnings for children and the elderly to stay indoors until the air cleared.
The all-engulfing environmental crisis China faces is not about melting ice and rising temperatures -- in fact, it is the unusually cold winter that is driving up energy use and hence pollution. (In China, coal is king, which is why winters are particularly polluted times.) Rather, Chinese citizens are angry about much more pressing and existential needs: to breathe clean air, for example, and to escape cancer and other pollution-related afflictions.
Lung cancer rates in China are skyrocketing, and not only due to smoking. Skin cancer, on the other hand, is much less widespread. US rates are over 50 times China’s -- melanoma grows far less frequently where the sun is blocked by tiny airborne particles.
No one should doubt the sincerity of Chinese leaders’ desire to address the problem -- they are aware that deteriorating air quality could be a chronic source of social discontent.
Some Chinese responded furiously on microblogs, venting their anger at the regime’s apathy. But a close read of the statements coming out of the party’s Third Plenum, a high-level meeting to discuss China’s political and economic future which took place in November, reveals that the leadership is deeply worried about the new menace.
They know that their response can no longer be limited to symbolic measures like cracking down on outdoor barbecue stalls, anti-smoking campaigns, restricting car use or even throwing money at the problem. But what — if anything — can be done? China will not be able to address its pollution problem without substantial reduction in the air pollution resulting from electricity generation.
China now uses roughly as much coal as the rest of the world combined, and the commodity occupies 65 percent of China’s electricity mix, with fully half of the country’s rail traffic dedicated to transporting it. Rejiggering this massive imbalance would entail either replacing China’s current fleet of coal plants with super clean, yet expensive, technology like Integrated Gasification Combined Cycle (IGCC), which turns coal into gas while removing impurities before combustion, or the slow shift in power generation away from coal and toward natural gas, nuclear power and renewables.
Each alternative to coal presents its own complications. Natural gas use could be vastly expanded if China cracked the secrets to exploiting its shale gas reserves, the largest in the world. But this is no simple task: China’s shale deposits lie twice as deep as those in the US, and the country lacks ample supplies of water, a resource necessary for fracking. Hydroelectricity is more promising, but that too poses environmental and power transmission problems, not to mention political issues with downstream countries that share these rivers.
Meanwhile, the oil-dominated transportation sector, a major contributor to air pollution, will also take many years to clean up.
While local authorities are getting serious about capping the number of new vehicles allowed on the road, China’s automobile market — the largest in the world — is still growing at a blistering pace: the most recent numbers, for November, show 14.9 percent year-on-year growth. Many provinces are experimenting with deploying vehicles fuelled by natural gas or methanol, which in China is made from coal in a clean process. But the air quality gains accomplished by the shift to alternative fuels are not even close to offsetting the vast increase in emissions driven by China’s growing demand for cars.
Making matters worse, China’s energy prices are heavily subsidised, meaning they are far too cheap to incentivise energy efficiency. The price of a kilowatt hour of electricity in China is 8 cents.
In the US, where cheap natural gas and coal are abundant, the average is 12 cents; in Japan the average is 26 cents; and in northern Europe, it’s over 30 cents. Due to price caps, gasoline prices are also relatively low for a country that just became the world’s largest oil importer: 30 percent cheaper than in Japan, and just over half the average price across Europe.
Allowing energy prices to rise to market levels by eliminating subsidies and price controls could curb energy demand while making clean coal combustion technologies more competitive. But a policy of de-subsidisation would come at a cost: It would drive manufacturing capacity out of China, slow economic growth, breed social discontent, and hinder the very same reforms aimed at bringing President Xi Jinping’s so-called Chinese Dream to the masses.
This is the hard truth with which China’s leadership — not to mention the rest of the world — is starting to contend. China is caught between the desire to grow and the need to breathe. Ten percent annual increases in industrial output may elicit cheers from financial markets, but such a growth rate may come at a cost of national suffocation.
WP-BLOOMBERGBy Gal Luft
Many of us have nostalgic memories of waking up on winter mornings to welcome news of a snow day, allowing us to skip school or stay under the blanket for a few more precious hours. As temperatures drop in the Chinese mainland, schoolchildren there have become acquainted with their own version of a snow day: The smog day, which occurs when schools and workplaces shut down due to hazardous levels of pollution and heavy haze. But you can’t make smog angels. Indeed, citizen discontent at China’s off-the-charts environmental degradation is quickly growing into a potential menace to the ruling Communist regime. Issues like unmet demand for political rights are no longer the party’s only existential threat.
In one symptom of China’s growing environmental menace, city-wide shutdowns are becoming the new normal. In January, a thick blanket of soot descended on Beijing, bringing life to a near halt. In October, the level of pollution in Harbin, a city of 10 million in northeast China, exceeded the level acceptable to the World Health Organization by a factor of 40; schools, roads and airports were forced to close. In early December, an entire swath of central and eastern China — Jiangsu, Zhejiang, Anhui and Henan provinces — suffered a bout of heavy and dangerous pollution.
In Nanjing, a city of eight million, schools, ferries, highways and airports shut down. And in Shanghai, China’s financial hub, visibility was reduced to a several feet for much of early December, as many covered their faces with masks and authorities issued warnings for children and the elderly to stay indoors until the air cleared.
The all-engulfing environmental crisis China faces is not about melting ice and rising temperatures -- in fact, it is the unusually cold winter that is driving up energy use and hence pollution. (In China, coal is king, which is why winters are particularly polluted times.) Rather, Chinese citizens are angry about much more pressing and existential needs: to breathe clean air, for example, and to escape cancer and other pollution-related afflictions.
Lung cancer rates in China are skyrocketing, and not only due to smoking. Skin cancer, on the other hand, is much less widespread. US rates are over 50 times China’s -- melanoma grows far less frequently where the sun is blocked by tiny airborne particles.
No one should doubt the sincerity of Chinese leaders’ desire to address the problem -- they are aware that deteriorating air quality could be a chronic source of social discontent.
Some Chinese responded furiously on microblogs, venting their anger at the regime’s apathy. But a close read of the statements coming out of the party’s Third Plenum, a high-level meeting to discuss China’s political and economic future which took place in November, reveals that the leadership is deeply worried about the new menace.
They know that their response can no longer be limited to symbolic measures like cracking down on outdoor barbecue stalls, anti-smoking campaigns, restricting car use or even throwing money at the problem. But what — if anything — can be done? China will not be able to address its pollution problem without substantial reduction in the air pollution resulting from electricity generation.
China now uses roughly as much coal as the rest of the world combined, and the commodity occupies 65 percent of China’s electricity mix, with fully half of the country’s rail traffic dedicated to transporting it. Rejiggering this massive imbalance would entail either replacing China’s current fleet of coal plants with super clean, yet expensive, technology like Integrated Gasification Combined Cycle (IGCC), which turns coal into gas while removing impurities before combustion, or the slow shift in power generation away from coal and toward natural gas, nuclear power and renewables.
Each alternative to coal presents its own complications. Natural gas use could be vastly expanded if China cracked the secrets to exploiting its shale gas reserves, the largest in the world. But this is no simple task: China’s shale deposits lie twice as deep as those in the US, and the country lacks ample supplies of water, a resource necessary for fracking. Hydroelectricity is more promising, but that too poses environmental and power transmission problems, not to mention political issues with downstream countries that share these rivers.
Meanwhile, the oil-dominated transportation sector, a major contributor to air pollution, will also take many years to clean up.
While local authorities are getting serious about capping the number of new vehicles allowed on the road, China’s automobile market — the largest in the world — is still growing at a blistering pace: the most recent numbers, for November, show 14.9 percent year-on-year growth. Many provinces are experimenting with deploying vehicles fuelled by natural gas or methanol, which in China is made from coal in a clean process. But the air quality gains accomplished by the shift to alternative fuels are not even close to offsetting the vast increase in emissions driven by China’s growing demand for cars.
Making matters worse, China’s energy prices are heavily subsidised, meaning they are far too cheap to incentivise energy efficiency. The price of a kilowatt hour of electricity in China is 8 cents.
In the US, where cheap natural gas and coal are abundant, the average is 12 cents; in Japan the average is 26 cents; and in northern Europe, it’s over 30 cents. Due to price caps, gasoline prices are also relatively low for a country that just became the world’s largest oil importer: 30 percent cheaper than in Japan, and just over half the average price across Europe.
Allowing energy prices to rise to market levels by eliminating subsidies and price controls could curb energy demand while making clean coal combustion technologies more competitive. But a policy of de-subsidisation would come at a cost: It would drive manufacturing capacity out of China, slow economic growth, breed social discontent, and hinder the very same reforms aimed at bringing President Xi Jinping’s so-called Chinese Dream to the masses.
This is the hard truth with which China’s leadership — not to mention the rest of the world — is starting to contend. China is caught between the desire to grow and the need to breathe. Ten percent annual increases in industrial output may elicit cheers from financial markets, but such a growth rate may come at a cost of national suffocation.
WP-BLOOMBERG
