The China Paradox

I am not a fan of China. Its leadership has proven untrustworthy. And whether it’s the pilfering of intellectual property, a lack of economic transparency, or its support of rogue nations, it has repeatedly demonstrated that they have no intention of being good global citizens.

Nonetheless, they must be given credit for their efforts to execute a transition to clean energy. Yet even here, China’s action are a paradox.

China has passed the U.S. as the world’s biggest polluter. However, that is as a much a function of its large population as it is the use of fossil fuels. A better measure is per capita emissions.

By that standard among countries with a population of at least 10 million people, Canada tops the list followed by Australia, Saudi Arabia, and the U.S.

Still – big is big, and when it comes to emissions, quantity matters.

Conversely, China produces more electricity from solar and wind than any other country. According to the Energy Institute China produces over 700 terawatt hours of solar power and over 400 terawatt hours of wind power. Both amounts are almost twice that of the U.S. and the EU.

It committed to double its utility-scale solar and wind power capacity and achieve 1.2 terawatts by 2030. And this is one commitment that the Chinese have not only kept but have exceeded. It is projected that they will hit the target five years ahead of schedule. That is impressive.

China also leads in the manufacturing and deployment of electric vehicles. According to the International Energy Agency 29% of all vehicles sold in China are EVs. Contrast that with 21% for the EU and 8% in the U.S.

But China remains heavily reliant on fossil fuels. Worse yet, in the past five years it has significantly ramped its use of coal. And by the end of last year, it accounted for two-thirds of the world’s proposed new coal-fired power.  

What are we to make of these contradictory actions?

I believe China’s commitment to clean energy is genuine for two reasons. They recognize it as a significant market opportunity, and they want to be a dominant player. And two, they know they have an air quality problem that needs to be addressed. By the particulate matter scale China has the eighth worst air quality in the world - over four times that of the U.S.

On the flip side, the Chinese are driven to be the world’s dominant economy and in some way they are pragmatic. Transitioning such a large population without creating economic disruptions undoubtedly requires the continued use of fossil fuels including coal.  And face it: the people of China are in no position to raise objections.