CLIMATE SPECTATOR: Forget Kyoto, focus on China

Climate Spectator

The obsession with who has and hasn't signed-onto a continuation of the Kyoto Protocol and whether or not a country has a nationwide or economy-wide carbon price is a monumental distraction. What matters is whether countries are pulling their fingers out to help transform our energy supply.  

This may not necessarily mean they've abandoned coal or their emissions are going down tomorrow. But we definitely need to see a serious commitment to developing low carbon energy technologies and improving energy efficiency. In many cases these low carbon technologies have shown a capacity for exponential growth. So even if they are a small component of our energy system today, provided they are receiving serious attention and investment, there's a reasonable chance they could be scaled-up quickly a few years into the future.

There's a lot of focus on China as some kind of evil bogeyman of climate so let's take it as an example. The world's most populous country is now the largest carbon emitter on the planet and has been extremely keen on building coal-fired power stations. But there are reasons for optimism.

My own personal experience bears out the seriousness to which China has taken on the clean energy challenge. From 2005 to 2007 I attended quite a few solar conferences having worked for the main industry body at the time – the Business Council for Sustainable Energy (now the Clean Energy Council). The conference exhibitor halls were filled with companies from Germany, Japan, the US and even a few Australian manufacturers. But after leaving the Clean Energy Council I took a break from these conferences.

Then in 2010 I came along to the All Energy conference. The exhibitor hall was about four times the size of any conference I'd been to previously and it was wall-to-wall with Chinese solar PV manufacturers. In the space of just two years they'd taken over the market and completely transformed its scale and economics globally.  

Annual Solar Photovoltaics Production by Country, 1995-2011

Source: Earth Policy Institute and IEA PVPS

It's true that much of this solar production is reducing emissions in countries other than China. Yet it was the single-minded determination of its government in combination with private sector firms such as Suntech, Trina and Yingli that has given us good quality $1 per watt solar modules many years before anyone ever expected. In addition China's own ambitions for installation of solar have grown considerably as it has realised how cheap it can make it. At over 30 GW of annual production, solar PV is now an industrial grade power technology thanks in very large part to China.

In wind turbines China hasn't achieved the same global dominance, as explained in the Climate Spectator interview with the Vestas head of marketing. But it is already the largest market for wind power in the world, and based on Beijing's current five-year plan, the market will become even more important. And the entry of Chinese wind turbine companies has imposed a level of competitive discipline on producers that has forced down prices.

China is also threatening to transform the development of nuclear power plants, just as it has done to solar PV.

The reality is that China is now a major energy importer of oil, gas and even coal. China's interests are best served by being as energy-efficient as possible and having the renewable energy sector grow globally (which plays to its strengths in manufacturing). In many respects Japan provides the template here as it has done across the Chinese economy. In this respect China has huge room for improvement in energy efficiency based on what Japan already manages to achieve.

What's more China is simply too big to free ride in global efforts to address climate change. Something it appears to recognise based on its recent emission reduction pledges. The Chinese government has released projections that indicate that policies it has already implemented as well as planned will reduce its emissions in 2020 from 14.4 gigatonnes of CO2 to 9.9 gigatonnes. This is still way too high, yet the reduction of 4.5 gigatonnes from a no policy scenario is huge. It is equivalent to reducing the EU's entire annual emissions to less than zero.

China is a long way from perfect. It is expected to expand its use of fossil fuels over the next decade as explained last month in Climate Spectator. Also, it undermines its own economic productivity and emissions reductions through energy subsidies, in particular for aluminium smelting which defies rationality. If we're to contain the risks of climate change to some kind of manageable level they'll have to do an awful lot more. 

But so does Australia and Europe, who both have binding Kyoto pledges and mandatory carbon pricing in place. 

Let's put the blinkers away and recognise that there's more than one way to skin a cat.