October - November 2012 - Association of Dutch Businessmen

Business
Sustainability & Business: China
Text Petra Pronk
If you look out of your hotel room window, if you are lucky
enough to get one, the Red Dragon is bathed in different
shades of green and grey light in the early morning. As the
biggest coal economy in the world, this colour scheme is
not likely to change very quickly. At the same time China
is often mentioned in relationship to renewable energy,
sustainable growth, etc. As the second largest economy, it
would be a major win if China could take a lead towards a
sustainable and more responsible future. Is China ready to
take on that challenge?
Economy
China’s growth has been remarkable in many ways. During
the first 4 phases of modernisation, between 1980 and
2000, this Red Dragon succeeded in keeping growing
energy demands at half the pace of their economic growth.
Most developing countries have their economies grow
in a one-to-one correlation with energy consumption.
Currently, however, this trend has been reversed in China
and the growth in energy demand is 1.4 times the rate of
the economic growth. By 2020, China intends to quadruple
its economy, which means that it will be the size of 3 more
Chinas by the end of that year. Without major government
intervention, China’s energy sector will be increasingly
dominated by the cheapest and easily available resources,
coal and oil. They are only cheap if health, safety and
environmental costs are ignored.
Connecting the Dots
The biggest challenge for China to ensure sustainable
growth is to connect the dots between economy and
ecology; between economic growth and environmental
costs. China’s challenge encompasses more than solar
panels, hybrid cars, wind turbines, carbon trade and green
buildings. From the outside looking in, it seems like a
paradox. Reports on major health and safety issues such as
air pollution, dirty factories and man-made droughts and
floods are all too familiar. At the same time, it is a startling
realisation that world’s biggest carbon polluter has lifted
400 million people from poverty since the 1980s, has 690
million people living in cities and an economy that grows
by 7% each year.
The world expects China to continue its growth in a
sustainable way. We are depending on China to get it right
the first time!
Coal Using Nation
One of the biggest challenges lies in the fact that China is
the world’s most coal dependent economy. It uses more
than the USA, Europe and Japan combined. As it sits on
the world’s third largest coal reserve, it is very attractive to
continue to use coal. However, this would be disastrous for
China, but also for the rest of the world. Although China’s
focus is on economic growth, the government has come to
the realisation that it needs to link the dots between the
economic growth and the environmental challenges.
With coal providing over 2/3rds of China’s electricity
needs, power stations have been opening at a rate of one
a week. They recently opened their first self-developed,
Integrated Gasification Combined Cycle (IGCC) power
station. This is a far cleaner and more efficient way to
use coal, as it produces only 1/10th of the usual carbon
emissions. In this facility in Tianjin, tonnes of CO2
production is being sold, at a profit, to a local beverage
company to make fizzy drinks. However, the majority of
the CO2 produced is planned to be used to sequester in
off shore oil wells to help oil recovery. China may lead in
carbon capture technology in some areas of the country,
but this doesn’t mean that CO2 is always put to good use.
At a new facility in Shanghai, production far exceeds the
needs of other industries, so the rest of the CO2 is simply
released into the atmosphere.
This dualistic approach to dealing with coal dependency
and its effects is also in evidence at that world’s largest
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