Chinese Economic Growth and Atmospheric Pollution: An Overview

Transcription

1 Chinese Economic Growth and Atmospheric Pollution: An Overview Jie He CERDI, Clermont-Ferrand David Roland-Holst UC Berkeley

2 Motivation Why we should care about this: 1. Chinese GHG emissions are already a significant regional externality and could be decisive on a global basis. 2. China s energy demand is rocking the tanker. 3. Because of its status as a populous DC, what happens in China in terms of sustainable living is of special significance. 2

3 Aerosol Optical Depth : April 21 NASA-TERRA Satellite; MODIS Inst Source: Y. Kaufman: 21, NASA-GSFC AOD (Unitless) 3

4 Source: Novakov, Ramanathan, Hansen,.. Sathaye, GRL, 22 4

5 Three Focal Points 1. Where is China along the path of energy dependence? 2. How might energy prices and policies influence its course? 3. How can we decompose the ensuing environmental effects? 5

6 Energy and GHG Trends in China Two contending perspectives: 1. Optimists point to falling coal intensity in the late 199s and massive technology infusion across the economy. 2. Others see resurgence of coal and overwhelming demand shifts in recent years, driven mainly by final consumption and completion of the process of modernization. 6

7 Reported Growth Rates of GDP and Commercial Energy Use in China Source: Logan:21 7

8 Chinese Steel: An Optimistic View 8

9 Chinese Steel: Reality Now below average, growing fast, and headed much higher Per capita consumption up 2.5 times in last decade Likely to more than double again in coming decade Even 15% annual growth would still be less than Korea in 1992 Annual Kilograms Per Capita Steel Production Oil Consumption Country China Korea Japan France United States

10 Industrialization may be energyintensive, but affluence is much more so. Per Capita Steel and Energy (Chinese levels = 1) 1 Normalized Quantity Hill Mountain 2 1 China Korea Japan France United States Countries Steel Oil 1

11 China: The Worlds 3 rd Largest Car Market by 21 11

12 Demographics of Vehicle Demand 12

13 Coal at the Foundaton, Oil at the Margin: Energy Composition by Type A. Energy preduction structure B. Total energy consumption Ton of equivalent coal Year Ton of equivalent coal Year hydropow er natural gas crude oil coal 13

14 Tipping the Trade Balance: Energy Demand and Supply Composition total export MTEC total import total consumption total production -3 Year 14

15 Macro Efficiency Determinants Energy production Energy consumption GDPPC industrial GDPPC SO2 emission Per capita energy consumption and production (kg equivalent oil/person) GDPPC and industrial GDPPC (1995 USD) Per capita SO2 emission (g/person) Year 15

16 China: Per Capita Waste Gas Emissions (1, cubic meters) Source: Aufhammer et al: 23 16

17 Projections to 225 We use a recursive dynamic CGE model to forecast trends for China over the next two decades. Around a calibrated baseline of consensus GDP growth, we evaluate the effects of rising oil prices. 17

18 Sectoral Output Composition 1% 8% Percentage 6% 4% 2% Service Construction Manufacture Agriculture % Year 18

19 Inverted Kuznets Curve? Real GDP and SO2 Emission Trends SO2 Real GDP SO2 intensity Real GDP (1^9 USD) SO2 emission (1^4 Tons) SO2 emission intensity (kg/1usd) Year 19

20 CO2 as the Hidden Dragon: Final Consumption Trends 1% 8% Percentage 6% 4% 2% Service Construcution Manufacture Agriculture % Year 2

21 Ills of Affluence 6 Emission intensity (Kg/1 USD) Agriculture Manufacture Construction Service Year Mfg reverses course because of electricity production. Services are about transportation. 21

22 Real Sources Of Emission Intensity Year C o al in ten sity (T C E/m illo n U SD ) Petrol and coke intensity (TCE/millon USD) O il in ten sity (T C E/m illo n U SD ) Year Agriculture Manufacture Construction Service Year 22

23 Composition of Environmental Incidence: Primary Drivers and the Pollution Troika Economic sources of pollution can be decomposed into three parts: 1. Growth effects expanding the envelope of economic activity. China s successes here are now legendary, and becoming almost surreal. 2. Composition effects shifting patterns of supply and demand around the surface of the envelope. Things will get much worse before they get better. 3. Technological change efficiency gains, bending the envelope. Here is the only unequivocally good news, driven mainly by coal use/distribution constraints and technology transfer. 23

24 Divisia Decomposition Results SO2 emission variation during Scale effect Composition effect Technique effect agricult ure Manufacturing Construction Services -5 agricult ure Manufacturing Construction Services

25 Divisia Decomposition SO2 emission changes for some manufactures Composition effect Oil Petrol and coke Electricity Textiles Wearing apparel Leather products Chem. Prod Other mineral prods Ferrous metals Motor vehicles Other trans. equips Electronic equipment Other mach & equip. Land transport Sea transport Air transport -2 Sectors 25

26 Crude Oil Absorption Trends Oil consumption and import (1^6 USD) oil import total oil consumption import ratio in total consumption ratio of import (percentage) Year 26

27 Conclusions China s economy has attained levels of growth and modernization that seemed beyond imagining only a generation ago. Along with its many successes in improving material living standards, however, have come new risks to sustainability and environmental quality. Without more effective emission control policies, China s economic growth will give rise to very significant SO 2 emission problems, especially in the period of After a period of industrialization, structural transformation induces rapid expansions of energy-intensive final demand, mainly private electricity, heating, and transport services. To meet the needs of a consumer society, SO 2 emissions shift from the other manufacturing and service sectors into intermediate energy generation (electricity generation and petrol and coke sectors), and petroleum refining. Coal will be significantly replaced by relatively cleaner intermediate energy sources such as electricity, oil products and natural gas in manufacturing. Higher crude oil price may slow or even reverse this trend. Even these pessimistic results understate the the problem, since final consumption emissions are not even considered. What is to be done? A very good question. 27

28 Quo Vadis? 28