China Pledges Energy Curbs

Government promises slower growth to fight smog.
An analysis by Michael Lelyveld
2013-02-11
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A worker loads a truck with coal at a coalyard in Chongqing, Jan. 28, 2013.
ImagineChina

As China seeks relief from its air quality crisis, the government is promising to control energy consumption, electricity and high-polluting coal.

On Jan. 30, the State Council approved a series of targets that would cut energy growth rates during the current five-year period through 2015, the official Xinhua news agency reported.

Under the planned limits, China's total energy use would be allowed to rise at an average rate of 4.3 percent a year, far less than the 6.6-percent annual increases in 2006-2010.

The figures imply a 35-percent drop in energy growth rates, which could help curb the emissions released into the air.

Consumption increases would also be considerably lower than last year's 7.8-percent growth in gross domestic product (GDP), suggesting measures to boost efficiency and reduce energy waste.

The limits are "part of the country's efforts to correct overuse and foster greener growth," Xinhua said.

But analysts see a series of problems with the government's promises.

For starters, much of the current five-year period has already passed with few signs of conservation gains.

Officials have yet to release figures for last year, but energy use soared 7 percent in 2011, according to National Bureau of Statistics (NBS) data.

The stimulus-driven surge in consumption was the biggest since 2007, Bloomberg News said.

Partial results for 2012 suggest slower but still substantial growth that will make it hard to meet the low average annual target. Power consumption rose 5.5 percent last year, the National Energy Administration (NEA) reported.

Goal in danger

The rates suggest that consumption growth would have to be cut more drastically in 2013-2015 to reach the five-year goal.

"That's why I personally believe it would be extremely difficult for China to meet such targets now," said Kevin Jianjun Tu, senior associate in the energy and climate program at the Carnegie Endowment for International Peace in Washington.

Tu said the targets are likely to have little effect until the government can control consumption of coal, which accounts for some 70 percent of China's primary energy mix.

Statistical reports on coal are so unreliable that energy growth rates are impossible to track accurately.

"The government needs to fix this issue first before they can seriously talk about any control targets," Tu said.

In an article for the industry publication China Oil Trader last month, Tu argued that caps on coal consumption have failed to halt growth and that "command and control policy no longer functions effectively in an increasingly market-oriented Chinese economy."

National caps "are guidelines instead of legally binding targets," he said.

Last year, production was supposed to be limited to 3.65 billion metric tons under the 12th Five-Year Plan for Coal Development. But industry reports found that coal producing provinces exceeded their assigned caps by as much as 18 percent, Tu said.

Consumption is supposed to be set at 3.9 billion tons in 2015, but the figures for output and imports suggest that consumption of nearly 4 billion tons was already reached last year.

Last month, the China National Coal Association reported domestic production of 3.66 billion tons rose 4 percent from a year earlier, while record imports of 289 million tons jumped 58 percent, the Platts newswire said.

Coal and emissions

Unless China can curb its insatiable hunger for coal, citizens can expect little relief from the smog-causing emissions of fine soot particles, known as PM2.5.

Despite years of effort to promote alternate fuels like cleaner-burning natural gas, coal-fired power plants still account for 71.6 percent of China's installed generating capacity, according to Xinhua.

The government would allow electricity use to grow at an average annual rate of 7.4 percent over the coming three years, slightly less than the projected GDP target, based on State Council figures.

That would imply a turnaround in efficiency, if it could be achieved.

In 2010, for example, electricity use climbed over 14.5 percent, far more than GDP growth of 10.4 percent for that year, according to the China Electricity Council.

Such gains are technically possible, but only with major changes in energy and economic policies, said Philip Andrews-Speed, principal fellow in the East Asia program at the National University of Singapore's Energy Studies Institute.

"In the short term, changes in energy policy are unlikely to be sufficient to meet this goal, but if the government was ready to accept a lower rate of economic growth and resist the temptation to boost infrastructure spending, then the target might be attainable," Andrews-Speed said.