Ross Garnaut didn’t call climate change a “diabolical policy problem” for nothing. When he launched his supplementary draft report at the National Press Club last Friday he delivered the good news about China’s efforts to suppress its fossil fuel emissions. Problem is, it’s also bad news.

In the Q&A session I suggested that China, India and the other G77 developing nations would not join an effective global agreement to reduce global emissions at the post-Kyoto negotiations in Copenhagen next year. I asked him, as a former Ambassador to China, how he assessed the prospects.

“China’s better than just a chance,” he began.

It’s worth quoting his answer at length because it is a concise sketch of what China is doing from an informed source:

The week before last, China announced a 15% export tax on aluminium. In a series of measures over the last few years, it’s raised the cost of energy to energy-intensive industries, it’s discouraged investment in the energy-intensive industries.

China has, by far, the world’s biggest program for promotion of low emissions energy sources of many kinds; biomass, biofuels, hydroelectric, wind, nuclear. In every one of these, it has the world’s biggest program. And solar — a huge program putting solar on roofs — run in the private sector by a bright young graduate of the University of New South Wales who’s made himself a very rich man doing it.

The trouble is, China is growing so strongly, its energy demands are growing so strongly that it can be putting in place half of all of the nuclear capacity going on in the world in the next dozen years. It can be putting in place a wind program so big that it has driven up the price of the clever high intellectual property parts of the wind generators so that they become more expensive for everyone in the world, putting in so much hydro capacity on the Yangtze that we’re all worried about the environmental consequences.

It’s promoting biomass and biofuel at a village level right through the country. It’s doing all of that but it’s still accounting for more than half of the world’s growth in coal consumption. The numbers are truly daunting. China has set itself the goal of reducing the energy intensity of GDP by four percentage points per annum. The President and the Premier both made reference to it. For a couple of years, they weren’t making much progress. I was concerned that the high-level policy wasn’t biting.

We got figures last week through Xinhua for the statistical office of China on energy intensity last year. It fell by 3.7 per cent last year, so 2007 is the first year of concrete progress. The progress on energy intensity, the progress on low emissions energy, all of the low-emission energies that I spoke of, together with other things that they’re doing, hold out the prospect of China being able to hold emissions growth to about half the growth of GDP.

What I propose in the Supplementary Draft Report is that China accept a binding commitment to deliver that: half the growth of GDP until its per capita levels of emissions have reached the falling values of the developed countries, and then that it accepts the same decline to a low point of the other developed countries. I don’t think this is pie in the sky. I don’t think it’s easy. I’ve talked it over with relevant people in China. I’d characterise it as achievable but difficult.

That left the audience feeling a bit hopeful, as everyone wants to feel. Until they do the maths to discover that it’s really bad news that should make people feel despondent.

Assuming China’s GDP keeps growing at up to 10% a year, that means the “achieveable but difficult” outcome — if it is able to continue to reduce its energy intensity — will see its CO2 emissions grow by up to 5% a year.

That growth will come off a high base – the highest in the world — estimated at 6.2 billion tonnes in 2006. A 5% increase would be 310 million tonnes, 2.5% around 150Mt. Compare that with Garnaut’s recommendation that by 2020 Australia should aim to reduce its emissions by 10% compared to 2000 when we put out about 550Mt.

Opinion polls show that Australians will accept an emissions trading system to achieve that goal because they want to save the Great Barrier Reef, Kakadu, and the Murray Darling. But even if we actually achieve the 10% targeted reduction of 55Mt by 2020, the annual increases in China’s emissions will be at least triple that figure. And that’s Garnaut’s best case scenario.

Climate change is indeed a “diabolical policy problem”.

Simon Grose is Canberra Correspondent for Science Media.

Peter Fray

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