In November 2013, China’s capital city hosted what the ruling Communist Party had hoped would be a historic meeting. The core purpose of the gathering? The new president, Xi Jinping, and his prime minister, Li Keqiang, were to unveil ambitious economic plans to jump-start a desperately needed new phase of development in the world’s second-largest economy.
Instead, the meeting became an embarrassment. Not because of anything the leadership said or did but because of what was going on outside. For days, during and after the gathering, Beijing was enveloped by dense smog. Hundreds of thousands of citizens wore face masks when they had to go outside, many refused to go outside, and 2013 became popularly known as the year of the “airpocalypse.” Even the state-owned propaganda organs had to acknowledge the truth: Pollution was “a nationwide scourge,” chided the China Daily newspaper. “Do we still think that it has nothing to do with us, when people can hardly see each other when they are standing within five meters of one another in some eastern cities? Do we still consider environmental protection something far removed from us when we have to wear a mask so we don’t develop respiratory problems?’’
At a dinner with friends in Beijing during that plenum, I sat chatting with a young man known as a “princeling”—the son of a senior leader in the party. The smog was all anyone could talk about. The young man, like so many other children of the elite, had gone to school in the West and now frequently traveled to the U.S. on business. He was seething. For the world media to be focused on the filthy shroud choking China’s capital, rather than what the party was doing, “was an absolute embarrassment. It has to get fixed.” I asked him whether he thought the children of the leaders were communicating that to their fathers. He gave me an “Are you kidding me?” look, which meant: You better believe they are.
Then came an interesting—and pointed—exchange. Another American at the gathering said, offhandedly, “Yeah, it really would be good if you guys could get a grip on climate change.”
The young Chinese man scoffed at her. “Climate change?” he said incredulously. “No one in China gives a damn about ‘climate change.’ We care about having air we can breathe and water we can drink.”
Starting November 30, the world’s political and environmental elite have gathered in Paris, under ferocious security, for the 21st session of the United Nations Conference of the Parties, which runs until December 11. Faced with what U.S. President Barack Obama and Secretary of State John Kerry have called the greatest threat to mankind, world leaders from every nation are expected to sign an agreement to reduce greenhouse gas emissions, the driver of climate change.
For years, China has been the world’s leading emitter of greenhouse gases and thus, in the eyes of some in the environmental community, public enemy No. 1. China chafes at the criticism and will sign whatever document emerges. But don't be fooled. Amid the outward signs of cooperation between developed and developing nations on climate change, China remains, at best, wary—and in the minds of many officials at home, deeply resentful—of the pressure the West has brought on Beijing to rein in CO 2 emissions.
Coal is the dirtiest of fuels, and China’s “airpocalypse” is intimately linked to its huge and politically powerful industry. China’s extraordinary economic rise over the past 40 years has relied on cheap and plentiful energy. Coal makes up 66 percent of overall energy use in China today. Its massive manufacturing sector relies largely on coal-fired power plants. In fact, the government’s statistical bureau confirmed in early November that it had underreported just how much coal China burns—by 17 percent. That’s 600 million tons of coal a year, or 70 percent of the United States’s total annual coal use. Last year, under Xi—who has promised China will begin to reduce its overall CO 2 emissions by “around 2030”—the government approved plans to build 155 coal-fired power plants by 2020. That’s just shy of three approvals per week last year.
In the United States, Obama is waging what his critics call “a war on coal.” He views climate change as one of his “legacy” issues, and his Environmental Protection Agency, under the guise of its Clean Power Plan, effectively refuses to sign off on new coal-fired electricity generation (something 24 states have filed suit against). China—along with several of its neighbors in Southeast Asia—believes the United States has tried to extend that war beyond its borders. Beijing, diplomats say, thinks the U.S. has put pressure on the World Bank and the Asia Development Bank to withhold financing from coal-fired power plant projects.
Some in Beijing suspect this was also partly behind Washington’s reluctance to back China’s drive to launch its so-called Asian Infrastructure Investment Bank. “We believe all the talk about lending standards and best practices and all of that—which the U.S. used to hold back its support—was only part of the story. You were concerned we’d finance coal-fired power, and we will,” says a member of a Chinese think tank who often advises Beijing’s powerful National Development and Reform Commission (NDRC). The Obama administration denies that fear of coal project financing has anything to do with its tepid support for the AIIB.
As the Paris conference drew nearer, the U.S. publicly heaped praise on China for the targets it has set to reduce CO 2 emissions—reducing their growth and then moving to outright cuts around 2030. “This is the political breakthrough we've been waiting for,” cheered Timothy Wirth, a former U.S. undersecretary of state for global affairs and now vice chairman of the United Nations Foundation, when Xi first made his promise to Obama to limit emissions. In private, there is far more skepticism—and for good reason. In truth, the commitment Beijing made was far less dramatic than it seemed. The peak date for emissions was in line with forecasts already made by several state-backed think tanks: The China Academy of Social Sciences said in a 2014 study that slowing rates of urbanization would likely mean industrial CO 2 emissions would peak around 2025 to 2030 and start to fall by 2040.
Furthermore, China has made it clear that it won’t be legally bound by whatever comes out of the Paris summit. “The time line China has committed to is not a binding target,” says Li Junfeng, an influential Chinese climate policy adviser linked to the NDRC. In mid-November, Kerry confirmed that the so-called COP21 agreement in Paris will not be a treaty and thus not legally binding on the signatories.
There are several reasons for that. For years now, ever since the West—the United States in particular—began to obsess about “climate change,” suspicions were rampant in China. At a climate conference I attended nearly a decade ago, one Chinese delegate took to the floor to rant about “outside forces” trying to keep China down by changing the global energy rules overnight: “You got to build your economies on cheap energy—coal and oil—but now that we’re growing fast, you’re not supposed to use coal and oil anymore.” This, he said, was “ladder-up economics.” Just as China began to rapidly climb up the ladder, economically speaking, the West was trying to yank it up.
Despite increasing evidence that climate change is wreaking havoc globally, not much has changed. Gal Luft, co-director of the Institute for the Analysis of Global Security, a Washington-based think tank focused on energy security, spends about half his time in China. He says the phrase often heard behind closed doors in Beijing nowadays is “environmental imperialism”—a desire for the West to impose its environmental and energy use standards on the developing world.
In this line of thinking, China gets little or no international credit for the strides it has made in reducing what could easily have been a far larger carbon footprint. Its massive buildup of hydroelectric power—there are 47,000 hydro-dams in China—as well as its aggressive nuclear power program (29 new plants are under construction or have been approved—units that will more than double Beijing’s nuclear capacity by 2020) together reduce more than 10 times the emissions that the CAFE standards in the U.S. and Europe combined cut. (CAFE, or Corporate Average Fuel Economy, refers to fuel-efficiency standards for automobiles.)
“I don’t think the rest of the world understands how aggressive China has already been in diversifying its [fuel mix],” says Luft, “or how much worse the situation would be had they not.”
China’s Energy War
Last year, the Pew Research Center surveyed public opinion to gauge what issues were most pressing to the Chinese people. First was corruption. Second was pollution. Climate change? It didn’t make the list.
Xi has launched an aggressive and unprecedented campaign against corrupt officials, even going after some who were formerly considered untouchable. Most notably, former head of internal security and Politburo member Zhou Yongkang was arrested last year and hasn't been heard from since.
Some believe the anti-corruption campaign is also targeted at powerful vested interests in China that stand in the way of changes Xi wants: economic reform, enhanced energy efficiency, a healthier environment and, yes, reduced carbon emissions. Among the targets in this corruption purge have been energy industry heads who have most resolutely resisted reforms that could lead to greater efficiency and, ultimately, less pollution in China. While Zhou’s last job was security czar, most Chinese citizens know that he grew up in the oil industry, where he had (and still has) a vast patronage network. His arrest “sent a pretty clear signal that it couldn't be business as usual in the oil sector anymore,” notes Damien Ma, a fellow at the Paulson Institute, a think tank started by former U.S. Treasury Secretary Hank Paulson that is dedicated to working with China on climate and other environmental issues.
The number of cars on China’s streets is surging: 20 million new ones sold last year. That growth has made transportation the country’s second-largest contributor to both air pollution and CO 2 emissions. For years now, China’s environmental protection agency has been insisting on improvements to the fuel quality standards at the nation's largest refining companies—China National Petroleum Corp. and Sinopec. The ministry tried to bring pressure, and laws were passed by the National People’s Congress, which generally does little more than rubber-stamp the Communist Party’s policies. The two state-owned oil giants—CNPC alone employs 1½ million people—simply refused.
After “airpocalypse,” the central government could not let that kind of intransigence stand. It finally insisted the refiners comply, and, for good measure, Keqiang recently gave renowned pollution fighter Pan Yue a senior position in the environmental protection ministry.
Pan earned a reputation as an effective fighter within that ministry. In 2005, he halted 30 large infrastructure projects run by state-owned enterprises and in the process made himself a lot of enemies. In 2008, he resigned. He is now head of assessments at the ministry, with a broad mandate that, if he is backed up by those at the top, gives him significant authority to again crack down on polluters.
Xi has also used his anti-corruption campaign to shake up the coal industry. In Shanxi province, the heart of China’s coal country, more than a dozen officials have been charged in anti-corruption probes, and rumors are rampant that there are more to come. To understand how significant that was in China, consider this: The first family of the power generation sector in China is hugely influential. The governor of the Shanxi province is Li Xiaopeng, former CEO of one of the country’s largest electric utilities. Li’s father is Li Peng, who was Deng Xiaoping’s premier and the hard-liner who infamously advocated most vociferously for the crackdown in Tiananmen Square in 1989. Until now, few had had the stomach to take on China’s coal lobby, because few wanted to mess with the Li clan.
Xi’s attack on coal interests has sent a sharp signal that change needs to come to a hugely corrupt and environmentally damaging industry. Environmental activists in China have been heartened. But it’s important to remember that the Chinese government’s goals do not jibe completely with the anti-coal desires of the climate change movement.
According to industry sources, consultants and representatives of nongovernmental organizations (NGO), Beijing seeks to make the coal-fired power plant industry more efficient—and in the process, cleaner. And it is succeeding. The 155 plants approved in 2014 will generate significantly more power per unit of coal used than plants built 20 years ago, and are far less polluting. And last year, China “prewashed” more than twice as much coal as it did the previous year before burning it, a key step in reducing particulate emissions. But the power plants still emit significant amounts of CO 2 . Thus, as Luft says, “coal is still the elephant in the room, and you're not going to wean China off of it as fast as a lot of people would like. That’s simply a fact.”
Change You Can Believe In...Eventually
Fossil fuel use is not the only area in which change is not coming as quickly as many in the West would like. For over a decade now, environmentalists have waxed rhapsodic about how, because of its population size, China would be able to scale any number of new, environmentally critical technologies—from renewable energy like wind and solar to millions and millions of electric cars. To date, renewable energy plus nuclear (including hydro) accounts for just 10 percent of China’s overall electricity generation. By 2020, it plans to raise that to 15 percent. And of the new cars sold last year in traffic-clogged China, less than 1 percent were electric.
The problem: Renewable energy and electric cars need a new electricity grid, a so-called smart grid that can store energy when it’s not needed and have it ready when it is. China’s grid, for the most part, is 20 years old. It’s reliable and brings electricity to the entire country (unlike, for example, India, the second most populous nation in the world, where 400 million go without electricity). But it is a dumb grid, and it will take a long time to change that. China, most analysts believe, will get there. But it is likely to take two decades or more. “People still need to be patient, and understand where we are in our development cycle,’’ says the academic consultant to the NDRC.
After a decade and a half of investment-led growth, which fouled the air and the water, that development cycle is now changing. The economy is slowing and will not go back to the 10-percent-a-year days. Consumption is now starting to supplant investment as the engine of growth, which will benefit the environment. And the waning investment boom leaves in its wake a much more energy-efficient industrial base.
Consider Dongfeng Motor Corp., a legendary state-owned auto company. In 2002, I visited one of its first factories, outside of Wuhan in central China. The plant had been built way up in the mountains during the Mao Zedong era. It was a location rooted in security, not commerce. (“Dig deep and love the motherland’’ was a slogan of the time.) The factory belched out smoke, and there was no industrial robot to be seen—only thousands of workers toiling on an assembly line that looked like Detroit circa 1950. Today, the old plant is long gone; in its place is a modern facility that employs 5,000 fewer workers but churns out twice as many cars a year as it used to. And, the company says, it consumes much less energy doing so.
There is still powerful resistance to economic and environmental change. What was true in Pittsburgh, Germany’s Ruhr Valley or the environmental catastrophe that was the Soviet Union is now true throughout China: Powerful economic interests dig in their heels. At a recent daylong seminar on energy policy and the environment, the NDRC—the key economic-planning agency in China—outlined priorities for creating a more efficient, cleaner and more sustainable energy sector. It laid out goals for boosting natural gas use instead of coal in electric power plants, for example, and explained its ideas for moving China more rapidly to a smart grid.
NGO representatives had been invited to the meeting, as were many constituents whose industries would be affected by such reforms. When the floor was open for responses, an executive from State Grid Corporation of China, the organization that oversees all of China’s electric utilities, methodically picked apart the NDRC presentation. This isn’t possible, at least not now, he said of one proposal. This can't happen either. The smart grid will take a lot of time and is very expensive. And so on.
“It was,’’ says an NGO rep who was present, “amazing—and discouraging.” Here was one of the country’s most powerful vested interests in effect saying, “Slow down here, folks. We’re not with the program.’’
As the world toasts with champagne glasses raised in Paris, celebrating progress in the climate wars, remember that scene. In the nation that emits the most greenhouse gases in the world—and confronts more dire environmental problems than anyone else—nothing is going to come easily.