How will China’s growth affect carbon strategy?

China is a gigantic wild card with the potential to substantially extend the growth of carbon emissions world wide, even if developed nations get their emissions under control.  China is unlikely to control its emissions without dramatic assistance or heavy economic pressure from developed nations.

To be fair, China’s per capita emissions are small on a per capita basis and concentrated in heavy industry as opposed to the consumer sector.  Much of China’s emissions (and other forms of pollution) were, in effect, transferred to China from developed countries along with manufacturing jobs.  Asian leaders have accused those expressing concern about China’s growth of green imperialism and hypocrisy.  See the China Post of June 25, 2007.

The Chinese government has “indefinitely delayed” the release of its climate action plan, according to the Financial Times of April 27, 2007.  On September 3, 2007,  FT reported that China had “added another front to its flailing campaign to cut energy use and pollution” describing calls for energy conservation while noting that in the second quarter, China’s economy had expanded 12 per cent and power production had expanded an astonishing 16 per cent, mostly from dirty coal.  FT reported on April 26 that a Chinese official disputed international estimates of China’s carbon emissions and felt that it was being unfairly pressured by developed countries that bear primary responsibility for the problem. 

” ‘The ramifications of limiting the development of developing countries would be even more serious than those from climate change,’ said Ma Kai, director of the National Development and Reform Commission, which steers climate change policy”, according to the China Post of June 5, 2007.  Both China and India assert a right to develop and increase energy consumption — hard to dispute, given their modest current and historical consumption.  See FT analysis of February 27.

Given the relatively tiny per capita incomes of people in China and India ($4,966 and $2,731 as compared to the United States at $35,373 in 2003 according to the World Resources Institute), and the prospect of rapid GNP growth in these dynamic economies, it is unfortunately very reasonable for them to assert the possibility of outgrowing the impact of climate change.  

While China’s current galloping growth rates may be unsustainable for any number of reasons, it is not unreasonable to foresee them doubling GNP per capita several times over the next century.  However, even a fairly grim assessment of the impact of climate change places losses in the vicinity of  20% of GNP by 2100 (see Chapter 6 of the UK Treasury’s Stern Review see also, the new IPCC working group two report, chapter 10), so the choice to prioritize development may be irresistible — even if the loss from climate change is several fold greater than estimated, it appears small compared to the gains they expect from development.  The choice is especially irresistible given that within those rapidly developing economies the governing elites benefiting most greatly from development are probably not those bearing the direct impacts of climate change in the form of flooding, etc.

In summary, it seems clear that we can only expect the rapidly rising economies to focus on reducing emissions if developed nations offer them great incentives to do so — their internal incentives are insufficient.  Of course, this could change if cost-effective clean energy technologies become available.

What are the climate consequences of continued rapid development if China is able to achieve it and does so with existing technology?

Currently, it is roughly accurate to think of green house gas emissions divided as follows:  The United States accounts for roughly one fifth, all other developed nations account for one fifth and China accounts for one fifth, with the balance of two fifths spread across all of the other less developed nations of the world. 

China’s emissions more than tripled 1980 to 2004, while the United States’ emissions increased 24.3%.  See Energy Information Administration statistics. In 2004, U.S. emissions were still 25% higher than China’s, but recent estimates including cement production indicate that China overtook and passed the United States in total emissions in 2006.  All together, developed nations including the United States — so called “Annex 1” nations — account for a little over 40% all GHG emissions.  See CAIT – Yearly Emissions.mht.  (This last statistic includes land use change and also includes GHG’s other than carbon dioxide.  This pushes up the developing nation share; on the other hand, it is a 2000 statistic and so excludes the rapid growth in China’s emissions.)

On a per capita basis, still using round numbers, with the United States as an index of 100, (approximately 20 tons of carbon dioxide per person annually), China is at a relative index of 20, and developed nations excluding the United States average about 40.  China has about 20% of the population of the world, the United States about 5% and other Annex I nations about 15%.  (TheWorld Resources Institute provides convenient access to this data.) 

If China raises per capita emissions to current U.S. per capita levels (a five fold increase), it could lead almost to a doubling of world emissions — as opposed to the cuts that are necessary to control climate change.  On the other hand, resource constraints may prevent this expansion.  If developed nations bring their emissions down and China reaches parity with Annex I nations average at a reduced level, the increase could be accomodated in an agressive reduction strategy. 

In summary, it seems likely that world development will extend climate change and that leadership to control climate change must likely come from the developed countries — by showing the way to greater efficiency and direcly supporting efficiency investments in developing countries.  It may also be necessary to develop a carbon taxation approach in developed countries which factors in the carbon inefficiency of manufactured goods from developing countries — macro environmental concerns ultimately converge with the concerns of labor and business for fair trade.

Compare Paul Krugman’s comments in the New York Times.