In a report published Wednesday, Li Wei, the director of the State Council’s Development Research Center, addresses China’s growing dependence on coal and oil. According to the report, China will consume 800 million tons of oil a year by 2030, a 60 percent increase from 2013. Of that 800 million tons, China will import about 75 percent of its oil from the Middle East–China is set to surpass the United States to become the world’s leading importer of oil this year. With the United States attempting to move towards greener forms of energy and energy independence, Li Wei warns against the instability that the United States’ withdrawal from the international energy market might cause.
While China’s oil consumption is great, its coal consumption is even greater (Coal makes up about 2/3 of China’s energy consumption, while oil only accounts for 1/5 of it). As Bloomer touched on in his post [and Austin Miller in an earlier post], China has taken measures to clean up some of its major cities. While Shanghai and Beijing face bans on new coal power plant construction, over 363 new coal power plants have been proposed in the poor central and western regions of the country. The effect of the pollution these power plants cause is evident, with life expectancy rates almost five years lower in areas where coal use is abundant. It will be interesting to see what steps, if any, the Chinese government takes to curb its energy dependence, and the effect they may or may not have on the global economy.
It should be noted that China is roughly 3 times the size of the U.S. so a per capita measure would be a better basis than simple total consumption. Also China is in the midst of major industrialization right now so the quantities of energy needed to build infrastructure are high. Finally it is a mistake to wonder about China’s investment in green energies because China is out investing the U.S. in sources of renewable energy (link below). That being said coal is a terrible source of fuel in terms of environmental effects and one can only wonder when governments will place taxes on coal in response to its negative externalities.
http://money.cnn.com/2013/04/17/news/economy/china-green-energy/
Regrading coal consumption in China, take a look at: https://econ274.academic.wlu.edu/2014/01/coal-in-china/
While I agree with the idea that China must take actions regarding its pollution problems, I cannot blame China only. As Paul said, China is going through industrialization. Developed countries like USA and European countries already went through the process. China’s argument would be: why are you blaming us when you already polluted the environment?
The government is trying to lower its coal consumption with 5-year policy.
At the same time, however, it needs to consume large amount of oil and coal for its economy to grow. It is a dilemma that no one really knows the answer to.
1. It’s good to see a cross-reference to another post in your post (and in the comment by “G” Jeong). I added the link to the one by Tate Bloomer and an earlier, nearly identical one by Austin Miller (Tate didn’t do his homwork!).
2. As economists, can we speak of “energy independence”? – isn’t it interdependence? I claim that if prices go up for us, they go up for Beijing – and vice-versa, and that if you’re willing to pay the price, you have access (short-term infrastructure limitations aside).
3. A few posts touch upon public health issues in China, many of which are a direct by-product [pardon the contradiction in terms!] of energy utilization. So is China using a lot of energy for its sized economy, thus improving efficiency and lowering emissions entail no conflict? (Note: the answer is not one of “yes” or “no”.)
China can’t be completely let off of the hook for their pollution solely because they are industrializing and other countries have already gone through this process. The environmental effects are much more researched and understood now than they previously were (not to say that the US is in the clear either). China is also much larger than the US was when they industrialized and therefore are doing much more damage to the environment. And finally the classic “two wrongs don’t make a right”.