One of the key challenges in 2014 for China’s Central Government will be how it addresses pollution.
In the local China press and social media, two terms were commonly used to describe the situation in 2013, “airpocalyse” and “Beijing cough”.
Official data suggests that 2013 had the largest number of smoggy days for at least 52 years.
And this week a team of Chinese and American researchers reported the results of study which showed pollution from China travels in large quantities across the Pacific Ocean to the United States.
The National Australia Bank’s latest China Economic Update Report says there’s little doubt the energy sector is a major factor despite disagreements regarding the sectors contributing to the country’s pollution problems.
NAB Economist Gerard Burg:
“The composition of China’s fuel mix is one of the key factors contributing to the air pollution problem – particularly the exceptionally high reliance on coal. Coal is by far the dominant energy source in China – accounting for around 68% of total primary energy consumption in 2012 (BP). In contrast, coal provided 30% of global energy in 2012, and only 20% in advanced economies.”
This chart show’s how important coal is to China:
China’s energy consumption has risen significantly over the past fifteen years, the period of dramatic industrialisation for the country. In 2000, China accounted for around 10.5% of global primary energy consumption. Rapid growth in energy consumption since this time pushed this share to almost 22% of the global total in 2012. In 2010, China overtook the United States to become the world’s largest energy consumer.
Gerard Burg says China’s State Council plans to spend 1.75 trillion Yuan (around USD 277 billion) between 2013 and 2017 to combat air pollution.
Under the plan, around 37 per cent of funding would be directed towards cleaning up industry and a further 28 per cent on cleaner energy sources.
Addressing the air pollution problem will require long term changes to China’s energy policy, both in terms of the composition of different fuel sources in the country’s energy mix as well as energy efficiency.
Gerard Burg says any changes would have important implications for Australia’s economy, as Australia is a major energy exporter to China.