How will growing economies like China respond to Climate change during energy crises?

Global warming, Climate change, Greenhouse gases, The Paris agreement,…likely the words we have been listening to a lot these days. As rightly said by James Hansen, “Global warming is not a prediction; it’s happening now.” None of us needs proof of that, right!

Despite all the headlines the catastrophic effects of climate change made in the last couple of years, not much can be expected in the future. Economies are on their way back to normalization. That said, the harmful gas emissions dropped due to inactivity are likely to reach their pre-pandemic levels or even surpass those levels. What also made to headlines recently is the global shortage of electricity, especially in Europe. India and China are almost dried out of their coal reserves, and so are many other countries. While the demand for power post-pandemic shot up, supply seemed below expected, making it difficult for governments to cope with their unfolding economies. Not to mention, series of extreme weather conditions have made the situation worse.

Basics of Greenhouse gases

Greenhouse gases are vital for us as it makes our planet livable by holding onto some of the earth’s heat energy and letting the Sun’s heat enter the earth’s atmosphere. Too little greenhouse gas makes earth cold and inhabitable; too much makes it warm and inhabitable. A balance needs to be in place to keep our planet livable and sustainable.

Current standing

Due to the pandemic, many important issues got side-tracked; Climate change is one of them. Time and again, nature in its own way has manifested- it’s time to act. Since 1970, CO2 emissions have increased by about 90%. Human activities are responsible for all the increases in greenhouse gases in the atmosphere. We have been burning fossil fuels for electricity, industry and transportation.

Deforestation and other land-use changes are the second largest cause of emissions accounting for 24% of the total emissions. The current shortage of power in many parts of the world is pushing the prices up and driving countries to favour coal, the cheapest source of energy, thus also impacting the higher levels of emissions of CO2.

Source: EPA.gov(Causes of greenhouse gas emissions)

40% of the world’s energy comes from coal, and 23% comes from Natural gas. 35% comes from other sources like oil. Endless talks and debates have been done on whether Natural gas could be the world’s energy saviour. The price of Natural gas is around 25% higher than that of coal. The gas emissions in the energy generation process are said to be lesser compared to Coal usage. Experts argue that there are reasons why Natural gas is not a feasible answer:

1. Considerable investment is needed to build the infrastructure, pipelines for transportation…cost will not be paid back for several years.
2. The actual cost is higher than expected, making investors cautious regarding new investments in LNG plants and exports.
3. The price of natural gas depends on highly volatile oil prices, again making it less desirable.
4. Though natural gas burns cleaner fuels in power generation, a lot of gas emission during the process is unaccounted bringing to closer to coal emissions.

High-income countries like the US can switch to energy sources like Natural gas to meet their demand. In the last couple of decades, the US has notably decreased its dependence on coal to meet its energy needs. The use of Natural gas for power generation has increased.

Situation in China 

Emerging countries like China are responsible for 70% of the total greenhouse gases in the atmosphere. Its yearly consumption of coal is around 4.4 billion tons(2016), and it is one of the largest producers of Coal. China is also investing heavily in coal-fired power plants as part of its belt and road initiative. As of 2021, there were 1,082 operational coal power plants in the country. This was nearly four times the number of such power stations in India, which ranked second. China accounts for over 50 percent of the total global coal electricity generation. It is planning to 43 new coal-fired power plants and 18 new blast furnaces- equivalent to adding 1.5% to its current annual emissions. It is building more than three times as many coal-power plants as all the other countries combined.

 “China will step up support for other developing countries in developing green and low-carbon energy, and will not build new coal-fired power projects abroad,” Xi stated in a pre-recorded message at the UN meeting. The world’s largest polluter pledged that its emissions will peak before 2030, and the country will be carbon neutral by 2060.

China is making efforts at home to reach the net-zero level but financing projects abroad as part of its belt and road initiative. Because of that, China has been under heavy diplomatic pressure to put an end to its coal financing overseas. South Korea and Japan also followed the announcements under pressure. The three countries collectively account for 95% of the foreign funding of coal projects.

China is responsible for 70% of the total financing abroad for coal power projects; the question is, if China is sticking to its climate change commitment and cut its funding, what does that mean for coal ambitions in those countries?

Source: Enerdata(Greenhouse gas emissions in last 30 years)

Energy Crises

Today, even after all the reserves and production levels, 2/3rd of the Chinese provinces are having rolling blackouts. These blackouts have highlighted the vulnerabilities of china’s power sector. As the economy has started to grow after lockdown, the energy demand skyrocketed, and so did the prices of Coal. Overreliance on coal and overemphasis on growth coincided with rising coal prices this year, creating shortages.

It’s not just the increase in demand that caused the crises. The supply shortage has also contributed. Many mines were shut down due to accidents. China has also been closing inefficient and under-capacity coal mines. It reduced its stockpiles of coal when China stopped importing coal from Australia as retaliation for Australia supporting investigations for origins of Corona virus.

Above all is now its commitment to climate change and call for blue skies. China has always prioritized money- history is evidence. All the eyes are on China. The world is waiting to see how China will respond to its energy needs and fast-growing economy while keeping its smog under check.

“Only when the last tree has died and last river has been poisoned and the last fish been caught, will we realize we cannot eat money”.

– Indian Proverb