China’s Energy Future: Coal, Gas, & A Gargantuan Climate Policy Challenge

With about a fifth of the world’s population, China plays a crucial role in the world’s energy and climate futures.  Right now, the developed world comprises an outsized portion of global energy use and greenhouse gas emissions compared to its population, (http://bit.ly/1bDyIIp), but per capita energy use in developing countries like China will gradually converge with levels in the developed world because of 1) catch-up growth in the developing world, 2) climate and efficiency regulations in the developed world, and 3) movement of heavy industry from the developed world to the developing world.  So one way of thinking about global energy futures is that Chinese policy may some day be of comparable importance to the policies of North and South America, Western Europe, and Australia combined.   (Or maybe “US policy is to China’s policy as Turkey’s policy is to US policy.”)

 

china-pop-map.jpg

Map of the world divided into five regions, each with the same population as China.

 
So China’s climate policy is crucial.  And it is currently in flux.  Many years of rapid growth in coal-fired power have produced acute particulate matter air pollution problems in China:  a recent study estimated that this air pollution reduced the life expectancy in northern China by 5.5 years.  http://bit.ly/19aFY91.  As a result, China has been seeking to develop alternative power sources such as natural gas and renewable power.  Some hope that this will help slow China’s rapidly rising greenhouse gas emissions.  Citi Research recently put out a report with the hopeful title, “The Unimaginable: Peak Coal in China” (http://citi.us/1cpecdP), and Bloomberg New Energy Finance published one titled “The Future of China’s Power Sector: From Centralized and Coal-Powered to Distributed and Renewable?”  Two recent analyses, however, show why China’s energy policy remains a daunting challenge.
 
The first analysis, from Armond Cohen and Kexin Liu at the Clean Air Task Force, http://bit.ly/16tPtlf, offers a bracing reality check by simply digging into the Bloomberg and Citi studies.  What they find is that China’s coal-fired plants will be a climate challenge for decades to come.  As a result of the recent boom China now has 750 GW of coal-fired capacity, and even as construction slows, it is due to add 343-450 GW of new coal-fired plants by 2030.  By comparison, the U.S., which until 2008 was the world’s biggest emitter of greenhouse gases, has only 300 GW of coal-fired capacity.  So, China will soon have 3.5-4 times the coal-fired capacity of the United States.  And unlike, the United States where most coal plants are aging, Chinese plants will still be in their prime, and may continue to operate for decades.
 
The second analysis, published in Nature Climate Change, analyzes China’s plans to produce synthetic natural gas (SNG) from coal at over 40 massive plants.  http://bit.ly/1a675Ru.  Burning SNG instead of coal would lower particulate matter pollution in China’s cities, but SNG takes large amounts of energy to produce, which means that, all things considered, it leads to even more greenhouse gas emissions than coal.  (SNG has roughly seven-times the greenhouse gas impact of regular natural gas, and 136-182% the impact of coal-fired plants.)  Thus, if coal is replaced with SNG, it will just make the world’s climate problems worse.
 
The Clean Air Task Force analysis suggests that carbon capture & storage may be the only viable option to control greenhouse gas emissions from China’s burgeoning coal plants.  And the SNG paper suggests that shale gas might be a viable alternative to SNG within China.  Both potential solutions have detractors.  What is clear, however, is that Chinese energy policy will be a crucial and daunting challenge for decades to come.
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