Wealthy Nations Daily Update - China Pollution

In June 2014, Chinese Premier, Li Keqiang, declared a “war on pollution” and announced a 5 year plan to intensify efforts to reduce pollution in the world’s largest economy (on a purchasing power parity basis). China is the world’s largest emitter of greenhouse gases and part of the plan is to increase both wind and solar power, as well as cut its reliance on coal. Zhou Dadi, the Vice Chairman of the State Energy Expert Advisory Committee said the aim was to bring 20 gigawatts of wind power and 10 gigawatts of solar into operation each year. In the 3 years leading up to 2014, wind installations nearly doubled to 110 gigawatts whilst solar had a 10 fold increase to approximately 33 gigawatts. Overall China wants to get 20% of its energy from renewables and nuclear by 2030; almost doubling current levels.

In the last 5 year plan, China reduced its energy intensity (energy consumption per unit of GDP) by over 19%. As well as the renewable goal, China wants to expand on previous policies in addition to implementing new ones and aiming to encourage companies to use energy efficient best practices and best available technologies. According to The Global Status Report, in 2013 alone China spent a total of USD 56.3bn on wind, solar and other renewable projects. In that year China accounted for 61% of the total investment in renewables by developing countries, this was also more than the whole of Europe combined.

In last year’s Report on the Work of the Government, Li stated that pollution is ‘‘nature’s red-light warning against the model of inefficient and blind development” adding ‘‘Fostering a sound ecological environment is vital for people’s lives and the future of our nation.” These comments reflect a growing unease by the Chinese public over the levels of pollution and the possible impact on health. However in a word of caution, the Environment Minister Zhou Shengxian said it would be a “prolonged battle” and that there was a need to be patient.

Also of interest yesterday was a policy speech made by President Xi Jinping at the start of his visit to the US, he once again pledged to not weaken the Chinese currency in order to boost exports and reiterated his opposition to currency wars. He also added that China and the United States must conclude a high-quality bilateral investment treaty as soon as possible. This agreement would give American companies better opportunities to expand in China; whose middle class population will soon be larger than the entire population of the United States.

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