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July 29, 2008 Source:  www.AsiaEcon.org The extreme measures Beijing has had to take in order to meet the World Health Organization's (WHO) air quality standards to host the 2008 Olympic Games ahs brought China's air pollution problem to center stage once again.


July 29, 2008

Source: www.AsiaEcon.org

The extreme measures Beijing has had to take in order to meet the World Health Organization’s (WHO) air quality standards to host the 2008 Olympic Games has brought China’s air pollution problem to center stage once again. China has taken a step in the right direction by investing in renewable energy sources, a move that may have a significant impact on the environment in the next 20 years.

During Beijing’s bid to host the 2008 summer Olympics, the International Olympic Committee verbalized concern that the city’s air would be unsafe for the athletes participating in outdoor events. When Beijing finally won the bid, Chinese officials pledged $12.2 billion into reducing air pollution. Since then, they have pushed for a reduction in atmospheric concentrations of sulfur dioxide, carbon monoxide, and nitrogen dioxide. This year, Beijing government officials have taken extreme measures to clean up the city’s air, including partial car bans. Half of the city’s 3.3 million cars are forced off the roads on alternate days depending on whether the vehicle’s license plate ends in an even or odd number. Emergency vehicles, taxis, and buses are exempt. In addition to partial car bans, Beijing has closed numerous heavy industries and construction sites.

Beijing’s push for cleaner air to meet WHO’s standard highlights China’s serious air pollution problem. According to WHO, about 750,000 Chinese people die prematurely due to respiratory problems. Sulfur dioxide emissions causes acid rain to fall on 30% of the country causing over $60 billion in damage each year. China’s polluted air is largely due to its heavy reliance on coal, the dirtiest fossil fuel, as a source of energy. 

With 13% of the world’s known coal reserves, China is the world’s leading producer of coal. Up until 2003, it was the second largest coal exporter in the world. Since then, however, China has reduced the amount of coal it exports by 50% due to a surge in domestic demand. China’s demand for coal has grown 12% every year since 2001, using over 2.4 billion tons in 2006. In 2007, China became a net importer of coal as Indonesia and Australia drastically increased their role in feeding the energy-hungry country. Today, over 69% of China’s total energy needs are met by coal, and about 75% of that coal is consumed from the power sector.

Recent efforts by the Chinese government to reduce air pollution have become increasingly more aggressive. China’s 11th Five Year Program calls for speedy development of renewable energy sources which will result in increased environmental protection. The program requires a 20% reduction in energy consumption per unit of GDP by 2010. Under China’s renewable energy law, which was implemented in 2006, 20% of its energy must come from renewable energy sources by 2020. Currently, renewable energy accounts for only 8.5% of China’s primary energy supply. In order to boost that number to 20% by 2020, the government has pledged to invest $180 billion in renewable energy.

One renewable energy source that is rapidly gaining popularity in China is biodiesel. China Clean Energy Inc. is a leading manufacturer of biodiesel fuels and specialty chemicals. The company utilizes vegetable oil feedstock sources to produce biodiesel fuels. What is unique about China Clean Energy is that it uses waste feedstock instead of raw grains to produce biodiesel. For example, rapeseed oil is produced by crushing the fibers of the rapeseed. The crushed fibers, known as waste feedstock, are usually discarded. However after the rapeseed has been pressed, the waste feedstock still contain some oils that are rich in fatty acid. China Clean Energy converts this remaining oil into biodiesel. Since rapeseed fibers are discarded after being pressed, using waste feedstock taps into a source of energy that would normally be completely wasted. As the world’s largest importer of grain based products, China has massive potential to produce biodiesel using waste feedstock. 

Companies like China Clean Energy have caused the Chinese government to seriously consider biodiesel as an alternative energy source because the use of waste feedstock provides answers to the two most common criticisms of the production of biofuels. The first widespread criticism of biofuel production is that it disposes valuable food resources, causing a surge in global food prices. Many believe it is a mistake to convert food products like corn and sugar cane into biofuels, especially in light of the current food price crisis. However, most of these criticisms have been directed at conventional raw grain-based biofuel production. Waste feedstock, on the other hand, is a non-food resource.

The production of biofuel has also been criticized for having a net loss in energy. Many believe the energy cost of producing biodiesel, which includes the energy used by mechanized farm tools to harvest the grain and the energy used to transport the grain, is more than or just less than to the amount of energy produced. Using waste feedstock has a higher energy payoff than using raw grains as long as the right waste products are used. To further reduce the cost of transportation, China Clean Energy buys its supply of feedstock and sells its biodiesel product in the local market. China Clean Energy operates profitably after launching its biodiesel operations just three years ago.

China Clean Energy has the capacity to produce 11,000 tons of biodiesel per year. In January, the company received $15 million in financing that will be used to increase production to 100,000 tons per year by 2009. Although biodiesel will see an increase in production in the next few years, it barely puts a dent into China’s energy needs. Currently, biodiesel account for less than 1% of China’s total energy supply. Since the government did not seriously looked to biodiesel until around 2005, biodiesel technology is still in its infant stage. Thus, China cannot look to biodiesel to have any significant impact on its massive energy needs in the next decade or two.

Another alternative to fossil fuel is hydropower, a source of energy in which China’s government has already begun to invest. China may look to rely heavily on hydropower in the near future because the technology is already developed. About 16% of China’s electricity is generated from hydroelectric sources. China contains 22,000 of the world’s 45,000 large-scale dams. These dams have the capacity to produce 117 GW. Most China’s total hydroelectric capacity is in the southwest region of the country. China’s 11th Five Year Plan calls for the rapid development of additional dams in rivers in Yunnan, Sichuan, and the Gansu Province. 

China is already home of the largest hydroelectric power station in the world, the Three Gorges Dam located on the Yangtze River east of Chongqing The Three Gorges Dam has a generating capacity of 16.9 GW, and more generators are being installed. Currently, 24 main generators are in operation, each designed to produce at least 700 MW, enough to power a large city. When complete, the project will have cost 180 billion yuan.

Hydropower has met heavy political resistance because it has displaced over 23 million people and has caused a further decline in the country’s already depleting water resources. The displacement of people can lead to impoverishment, especially in rural areas. Another criticism of hydropower is that it may contribute to global warming because it emits methane. Methane, which is produced by rotting plants and animals under water, traps in even more heat than carbon dioxide. Hydro facilities may also damage vegetation, increase the region’s risk of disasters, and affect the local climate.

The upcoming Olympic Games have given China a jolt in its production of solar energy. Beijing’s National Indoor Stadium, which was constructed for the Games, has 1,100 solar panels installed and is capable of generating 100 kW of power. The seven main Olympic stadiums contain solar generators that have a combined capacity of 480 kW. The streetlights outside the stadiums and the hot water used will also be 90% solar-powered.

The main drawback of solar power is its high cost. Although price of production has been steadily falling, it is still about seven times more expensive than power produced from coal. Despite its high price, the Chinese government is still investing heavily in it because China has several natural advantages in solar power development. First of all, China’s land area receives more sunlight than most other regions of similar latitude. China also has a huge domestic market for solar power. Third, China has become the world leader in photovoltaic (PV) cell production. In 2006, China had an annual output of 300 MW. China is already the world’s biggest solar water heater producer and consumer, producing and consuming more than half of the world’s solar water heaters. China sells more than ten times as many solar water heaters as Europe. 

With many investments in renewable energy sources, it is clear that China has gone on the offensive against its air pollution problem. Some have claimed that the goals set by China’s renewable energy law and the 11th Five Year Program are unrealistic, but the combination of solar, biodiesel, and hydropower may prove to be the way for China to meet these goals. 

Source: www.AsiaEcon.org

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