In the policy tug of war between trying to avoid a further slowdown of economic growth and at the same time cutting emissions, the Chinese government will likely stay away from making a clear choice between the two.
Figures help illustrate the situation. A circular of the State Council, or the Cabinet of China, showed in August that more than $370 billion would be invested to cut pollution by reducing the use of 300 million tons of standard coal by 2015.
Undermining the impact of the $370 billion national expenditure is another string of numbers.
According to a recent report from the environmental group Greenpeace, the Chinese government will construct 16 coal power plants, mostly in the western part of the country, in the next three years. By 2015, the country plans to increase its coal production by 2.2 billion tons a year.
The total number of coal production centers that would be developed during China's 12th five-year plan, from 2011 to 2015, is, in fact, higher than during the previous five-year plan (2006 to 2010), when 13 of the emission sources were built.
In order to connect the country, railroads are needed. Transporting coal, which is a lucrative business alongside the high demand, motivates provincial governments and companies to build capital-intensive infrastructure.
"Investing in infrastructure is the safest way to boost economy," said Kevin Jianjun Tu, a senior associate at the Carnegie Endowment for International Peace, based in Washington, D.C., where he leads the China energy and climate program. "And the transportation of coal accounts for more than 50 percent in the overall freight business."
Building more railroads
Shenhua Group, one of the largest state-owned coal producers in China, will invest about $1.6 billion to develop six coal railway transportation lines in Inner Mongolia. Other coal producers, such as China Coal and Shaanxi Coal and Chemical Industry Group, are also reportedly placing more rail tracks in western Inner Mongolia this year.
Other provincial governments that are joining in include the autonomous Xinjiang region in the southwest. An official city government website revealed that the Xinjiang government plans to pour as much as $2 billion into constructing railways this year alone.
Yongxuan Wang, deputy chief of the Transport Department of the Xinjiang Uygur Autonomous Region, said the Xinjiang government aims to export 50 million tons of coal to the eastern part of the country by 2015. That's almost seven times higher than in 2010.
In the past, Shanxi, a province located in the north, produced 25 percent of total coal mined in China. Because its resources are running out, the output from Inner Mongolia has outpaced this once-key mining center in recent years. On the same note, the Chinese government discovered a rich coal reserve in Xinjiang.
"The Chinese government didn't explore the coal resources in the west previously because consumption was mainly concentrated on the [wealthier] east coast and the transportation costs were high," said Qingwei Sun, climate and energy campaigner at Greenpeace in Beijing. "Now, the coal resources in the east are depleted, and the government has got to think of a way to broaden the supply."
Renewable energy goals shrink
Since the beginning of 2000, when China was preparing to host the Olympics, the Chinese government has been exploring alternative resources to make sure the country's air quality meets the international standard.
However, the bumpy road of scouting for alternative energy options suggests an aggressive shift from coal to something else is easier said than done.
In fact, production capacities for both photovoltaic modules, which are used to assemble solar panels, and wind turbines have recorded impressive growth over the past four years. But only about 5 percent of the products are used domestically, and the rest are exported to Europe and America.
"China does develop alternative energy," Tu said. "But the supply scale [in the country] has not yet formed."
The expansion of renewable energy in China is the classic chicken and egg problem. Some would say the supply spectrum is not big enough to create demand, while others would argue the current minimal demand in the country couldn't lure suppliers to pay more attention to the domestic market.
The Chinese government learned a lesson during the 11th five-year plan after a relatively ambitious target was set for renewable energy: 10 percent of total consumption. It turned out the actual share of renewables was 7.9 percent.
Therefore, China's National Energy Administration has quietly lowered the bar for the subsequent period of 2011 to 2015. According to the official figure, the goal is for new energy to account for 9.5 percent of overall consumption.
While the clock is ticking to clear the air, China has high expectations for shale gas, a type of natural gas, in the 12th five-year period, although it is 15 to 20 years away from achieving the pace set by the United States.
Yet the country's government has not determined an official figure for the total reserve. Other thorny issues, such as mining rights, underground water pollution, technology standards, pipeline construction and chemical use, will take a long time to be resolved.
Having factored in the uncertainties of using shale gas, the Chinese government has placed its hope on controversial nuclear energy. A report from the state newspaper China Daily in March of last year said the government would have planned to endorse the construction of 10 nuclear power projects, which would raise capacity to about 43 gigawatts by 2015.
But policymakers are concerned by the nuclear crisis in Japan after its magnitude-9 earthquake last year. KPMG, a global consulting firm, quoted industry experts in its commentary as saying the pace of developing nuclear projects would be slowed even though the Chinese government would resume its approval for such investment.
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