Financial crisis could propel China's fight against climate change
Hepeng Jia/Beijing, China
The global financial crisis could boost China’s efforts to tackle climate change, if the country invests money set aside to deal with a decline in exports on new energy technology.
The Chinese government has vowed to spend 4 trillion yuan (US$588.2 billion) by 2010 to stimulate internal demand for Chinese goods, as a way of offsetting the decline in exports caused by the global credit crunch. Tang Yuan, a senior official at the research office of the State Council, China’s cabinet, says that measures to stimulate demand within China should focus on clean energy development, such as large-scale biogas projects in rural areas, clean coal investment, and massive seawater pumping and desalination projects, rather than pouring money into conventional industries. ’In this way, both the economy and the climate can be saved,’ Tang says.
This attitude reflects international feeling that new and renewable technologies could boost the real economy, as Danish prime minister Anders Fogh Rasmussen emphasised at a China-Denmark climate change conference in Beijing on 23 October.
But the credit crunch has also moved climate change down the political priority list, warns Yang Fuqiang, China representative of the US-based Energy Foundation. ’This is true for both Hu Jintao and Barack Obama,’ he says. Private sustainable energy projects have already been hit by the financial crisis. According to Fuqiang, many clean technology projects supported by Wall Street investment banks have now been halted. To make matters worse, the declining oil price is putting pressure on development of the more expensive clean energy technologies.
In the short term, the economic slowdown has reduced China’s energy consumption. In 2006, the Chinese government promised to reduce consumption (per unit GDP) by 20 per cent by 2010, compared with 2005 levels. So far, the rapid expansion of heavy industry means a hoped-for average 4 per cent annual reduction hasn’t been met. But the goal could be achieved this year because of the massive closure of steel and rare metal industries, says Yang Ping, chief executive of the think tank Sun Yefang Foundation.