Presentation by Manish Bapna, Executive Vice President, World Resources Institute at the Brookings Executive Education seminar on “The Impact of the Chinese and Indian Economic Booms on the
Presentation by Manish Bapna, Executive Vice President, World Resources Institute at the Brookings Executive Education seminar on “The Impact of the Chinese and Indian Economic Booms on the Environment” (part of 2-day program on Asia)
SHORT VERSIONThe World Resources Institute (WRI) is a global environmental and development think tank that goes beyond research to create practical ways to protect the Earth and improve people’s lives. STANDARD VERSIONThe World Resources Institute (WRI) is a global environmental and development think tank that goes beyond research to create practical ways to protect the Earth and improve people’s lives. We work with governments, companies, and civil society to build practical solutions to urgent environmental challenges. WRI’s transformative ideas protect the Earth and promote development because sustainability is essential to meeting human needs and fulfilling human aspirations for the future. COMPLETE VERSIONThe World Resources Institute (WRI) is a global environmental and development think tank that goes beyond research to create practical ways to protect the Earth and improve people’s lives. We work with governments, companies, and civil society to build solutions to urgent environmental challenges. WRI’s transformative ideas protect the Earth and promote development because sustainability is essential to meeting human needs and fulfilling human aspirations in the future. WRI spurs progress by providing practical strategies for change and effective tools to implement them. We measure our success in the form of new policies, products, and practices that shift the ways governments work, companies operate, and people act. We operate globally because today’s problems know no boundaries. We are avid communicators because people everywhere are inspired by ideas, empowered by knowledge, and moved to change by greater understanding. We provide innovative paths to a sustainable planet through work that is accurate, fair, and independent. WRI organizes its work around four key goals: People & Ecosystems: Reverse rapid degradation of ecosystems and assure their capacity to provide humans with needed goods and services. Governance: Empower people and strengthen institutions to foster environmentally sound and socially equitable decision-making. Climate Protection: Protect the global climate system from further harm due to emissions of greenhouse gases and help humanity and the natural world adapt to unavoidable climate change. Markets & Enterprise: Harness markets and enterprise to expand economic opportunity and protect the environment. In all its policy research and work with institutions, WRI tries to build bridges between ideas and action, meshing the insights of scientific research, economic and institutional analyses, and practical experience with the need for open and participatory decision-making.
WRI has four inter-connected core competencies, or building blocks, that are common throughout our work– all focused on how we achieve impact in the world. Focus on Results: We organize all of our work to produce powerful and practical solutions, strategies and tools, and policy proposals for the public and private sectors. We are very deliberate about what we hope to achieve (our objectives) and the strategies we adopt to achieve our objectives.Analytical Excellence: We identify problems, drivers, economic incentives, and consequences to arrive at comprehensive, incentive-based, practical solutions. WRI’s objective and rigorous analysis is the bedrock of our work. Partnerships: We work with scientists, governments, businesses, NGOs, and international institutions worldwide to create incentives and pressure for change. Communication: We foster change by disseminating our solutions and ideas to targeted audiences. Our multifaceted outreach contributes significantly to our outcomes.
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http://www.flickr.com/photos/10816734@N03/6893619011/Credit: World Bank Photo CollectionTianjin, China
China and India are doubling their per capita incomes every 12 and 16 years, respectively (10 times the speed of the UK during a similar period). Source: MGI, Resource Revolution p. 34.http://www.imf.org/external/pubs/ft/weo/2012/01/pdf/text.pdf, p. 195Projections (as of Jan 2013): http://www.imf.org/external/pubs/ft/survey/so/2013/new012313a.htm
Definition of middle class from HomiKharas/OECD cited in McKinsey Resource Revolution report: Daily per capita spending of $10 to $100 in purchasing parity terms.
Definition of middle class from HomiKharas/OECD cited in McKinsey Resource Revolution report: Daily per capita spending of $10 to $100 in purchasing parity terms.Source: Resource Revolution, McKinsey Global Institute, 2011.Photo credit: ben124/Flickrhttp://www.flickr.com/photos/ben124/6974444470/in/photostream/
China:China has 710 cities with populations over 200,000. It’s cities are expected to add another 400 million people between 2005 and 2025.India:India’s cities are expected to contribute 50% of India’s GDP growth to 2025 but are currently not as large as those in China.NOTE: growth projections for Indian cities are from 2010 and assumed an 8% growth rate over coming decades – now more like 6% projectedSource for GDP contributions: Dobbs et al., Urban World: Rise of the Consuming Class, McKinsey Global Institute, June 2012.Source for Population projections: Sankhe et al., India’s Urban Awakening: Building Inclusive Cities, sustainable urban growth. McKinsey Global institute, April 2010.
Economic growth + middle class + changing lifestyles = spike in commodity prices
Source: http://www.economist.com/blogs/buttonwood/2011/04/financial_markets_and_china GDP data for 2011: http://databank.worldbank.org/databank/download/GDP.pdf Look at BP energy outlook.
Chatham House has China at 43% for steel, India 5%Chatham house has China at 47% for coal, India 9%GDP data for 2011: http://databank.worldbank.org/databank/download/GDP.pdf
Though not included in this analysis, India plans to quantify the cost of environmental damage to the economy when reporting gross domestic product figures within five years – around 2015. China major debate today on this issue as well given the costs of resource degradation and air and water pollution.Source: http://www.bloomberg.com/news/2010-11-30/india-plans-to-include-environmental-costs-in-gdp-data-update1-.html) Source: World Bank 2012. Inclusive Green Growth: The pathway to Sustainable Development, p. 12. Available at: http://siteresources.worldbank.org/EXTSDNET/Resources/Inclusive_Green_Growth_May_2012.pdf
India and China account for 76% of new coal capacity anticipatedChina coal:70% of total energy mix in China;80% of electricity generation in ChinaChina’s coal consumption remains significant, but is expected to plateau by 2020 and renewable energy deployment continues to ramp up (IEA WEO 2012)
Why Beijing is concerned about coal?
Investment in coal-fired plants in 2011 was not even half of what was invested in 2005. About one-third of the proposed new coal–fired plants that have been approved are delaying the start of their construction, resulting in a big slowdown in newly added coal power capacity. In fact, based on the number of coal-firedplants completed in 2012, newly installed capacity is likely to be only half of what was installed in 2011.This dramatic decrease in new coal development is mainly a result of China’s economic slow-down and weaker demands for new energy. It is also a result of the long-standing electricity sales price freeze imposed by the Chinese government on the power sector.Another important trend not to be overlooked is the rising public concern over coal’s environmental and health impacts. In response to unprecedented deterioration of the environment, public awareness of environmental problems is rising rapidly. The number and scale of local social unrest incidents against pollution are mounting across the country, many of which are related to coal-fired plants. Some of these incidents have gotten international attention. In December 2011, for example, nearly 30,000 local residents protested against the expansion of a coal-fired power plant in Haimen, Guangdong Province. The project was quickly suspended after the protest turned violent.4This map shows areas with PM 2.5 concentrations that exceeded the WHO’s guidelines over a two-year period. PM 2.5 is correlated with lower birth weights, which then translate to a host of health problems later in life (source: http://www.ucsf.edu/news/2013/02/13487/maternal-exposure-air-pollution-linked-low-birth-weights-worldwide)Graph Source: http://eijournal.com/industry-insights-trends/most-unsafe-aerosol-pollutant-abundant-in-china
CHINAAlthough there is uncertainty in the extent of China’s shale gas resource estimates, they are significant (perhaps greater than US shale gas reserves). Availability of water for hydraulic fracturing is likely to be a key factor influencing and perhaps constraining shale gas development in China.By 2015, China aims to have natural gas contributing 8.3% of total primary energy - 990 shale gas wells drilled, producing 6.5 billion cubic meters (0.23 Tcf) of shale-sourced gas. China also imports LNG. According to a recent CSIS report, 4 LNG import terminals are operating today, 4 more are under construction, and many more are proposed.Csis.org/files/publication/120824_Nakano_ProspectsShaleGas_web.pdf.India and Shale Gas:India has 63 trillion cubic feet of technically recoverable shale reserves (wouldn’t be on this map normally)Natural gas provides about 7% of total energy in India (2009). Although the majority is producted domestically, there are two operational LNG terminals. Other terminals are proposed and pipeline imports are also being explored.India’s progress towards shale gas is at an early stage relative to China and any impact of shale gas production in India is not expected during this decade.Shale gas block auction was delayed by ministry of environment, pending results of a water study. Similar to China, water availability is expected to be a factor influencing the viability of shale gas development in India.India’s 12th five year plan planning documents include an emphasis on shale gas resource estimates, research and drilling 25 wells (shale gas and coalbed methane seem to be considered concurrently).http://www.financialexpress.com/news/shale-gas-blocks-auctions-put-off-by-a-yr/764129/0http://www.eia.gov/analysis/studies/worldshalegas/pdf/fullreport.pdf, p. 4
Methane emissions occur at every life cycle stage of U.S. natural gas systems, with cost-effective reduction technologies available for each of these stages. According to our research, reducing the life cycle methane leakage rate to less than 1% of total production is an achievable industry-wide goal that, if attained, would ensure that natural gas is a significantly lower net contributor to greenhouse gas (GHG) emissions than coal or oil. However, achieving this sensible goal will require additional policy actions at the state and federal level.
China has the most installed capacity of any country, and had the highest growth in capacity in the five years from 2006-2011 (92%). However, investment only increased by 1% in 2011. Figures have not yet been released for 2012. China adopted its first national feed in tariff for solar in 2011.Note: Renewable as defined by Pew includes: wind, small-hydro, biomass and waste-to-energy, solar, geothermal, marineAlthough behind China, India’s investment levels increased by 54% in 2011. (Pew – Who is winning the clean energy race). The share of renewables in India has increased from 2 percent in 2003-2004 to 12 percent in 2011-2012 (asking Bharath for source)Sources:http://www.pewenvironment.org/uploadedFiles/PEG/Publications/Report/FINAL_forweb_WhoIsWinningTheCleanEnergyRace-REPORT-2012.pdf(figures for 2011 – look for update)China has led global investment since 2009 (Pew), accounting for a fifth of global investment.Chart for 2011:http://fs-unep-centre.org/sites/default/files/publications/globaltrendsreport2012final.pdfChart for 2009-2011:http://unfccc.int/files/cooperation_support/financial_mechanism/long-term_finance/application/pdf/usher_9_july_2012.pdf(couldn’t find three-year data for Germany, Italy, and rest)Other:E&Y says China is the most renewable energy-friendly country in the world.http://www.ey.com/GL/en/Industries/Cleantech/Renewable-energy-country-attractiveness-indices_November-2012Global wind power capacity has grown at an average of 25 percent per year over year the past five years, and solar PV has grown at a rate of 50 percent.http://www.iea.org/aboutus/faqs/renewableenergy/The global market for renewables will be worth trillions over the coming decades. According to the IEA, 60% of the new installed capacity between now and 2035 will be from renewables.http://www.worldenergyoutlook.org/media/weowebsite/2012/factsheets.pdf, p.3China has led since 2009 -- http://green.blogs.nytimes.com/2010/03/29/china-leads-in-renewable-investments/, citing Pew
Total invested in 2011: $10.2 billionSource: http://www.pewenvironment.org/uploadedFiles/PEG/Publications/Report/FINAL_forweb_WhoIsWinningTheCleanEnergyRace-REPORT-2012.pdf
Total invested in 2011: $45.5 billionSource: http://www.pewenvironment.org/uploadedFiles/PEG/Publications/Report/FINAL_forweb_WhoIsWinningTheCleanEnergyRace-REPORT-2012.pdf
New data from the National Bureau of Statistics shows that as of 2012 China is looking good to meet its targets:Non-fossil fuels accounted for over 9% of total energy consumption in 2012 (up from 8.6% in 2010)Energy Intensity is falling. Power consumption grew by 5.5% in 2012– less than half what growth rate was in 2011.CO2 only increased by just over 3% in 2012 vs. 9% increase in 2011.[Source: Dr. Melanie Hart, Center for American Progress (http://www.chinafaqs.org/blog-posts/chinas-new-leadership-confronting-energy-climate-and-environmental-challenges)
India’s goals for 2012 are about 10% of China’s for 2020; Most investment in RE is being driven by the public sector – through the National Solar Mission, and the renewable portfolio obligations. The renewable portfolio obligations of the electric utilities are poorly implemented by state regulators, since most state utilities are bleeding money, and the RPOs are considered overly burdensome. Investment in the sector is active from both the public and private sphere:Public sector•Rs 800 Crores offered for 2013-14 as generation based incentives for wind sector •Rs 3000 Crores outlay, under 2013-14 budget for grid-connected projectsPrivate sector•In 2012, twelve private equity deals in renewables worth $325.1 million (~Rs.1,765.30 crore) have happened•FDI worth of $ 467.07 million during 2012-13 in Indian renewable energy scene.
One indicator we map is floods – not just where they happen, but where they have the greatest impactCoastal areas of India and China are particularly at risk, and these are where some of the two countries’ largest cities are located. Overextraction of groundwater and development on unstable or filled in land exacerbates the threat to coastal cities.Several things pop out in this map:Some flooding is driven by hurricanes and typhoons – like the east coast of the USSome flooding is driven by rivers that flood from snowmelt – like parts of EuropeSome flooding is monsoon driven – like south AsiaAll of these floods have the potential to create costly disruptions – some of the largest megacities in Asia are along the coast of India and China.
A third example layer is drought severity, looking at where droughts have historically threatened agriculture and other water-dependent activities worldwide.This map is current data, but future could be more extreme.
China’s per capita meat consumption may grow by 40% by 2030 (but would still be less than US per capita) – Resource Revolution (McKinsey).China is responsible for 27% of all meat consumption, 25% of soybeans, and 19% of cerealsRice accounts for 25-30% of freshwater withdrawals in each country.
India: Drop in wheat production by 4-5 million tones, with even a 1ºC rise in temperature estimated by Government of India’s National Communications (NATCOM) in 2004.China: Although the picture is mixed, global- and regional-scale studies considered here generally project decreases in the yield of China’s major crops: rice, wheat, and most markedly of maize, as a consequence of climate change.http://www.metoffice.gov.uk/media/pdf/4/p/China.pdfOriginal caption:Source: Mueller and others 2009.Note: The figure shows the projected percentage change in yields of 11 major crops (wheat, rice, maize, millet, field pea, sugar beet, sweet potato, soybean, groundnut, sunflower, and rapeseed) from 2046 to 2055, compared with 1996-2005. The values are the mean of three emission scenarios across five global climate models, assuming no CO2 fertilization (see note 54). Large negative yield impacts are projected in many areas that are highly dependent on agriculture.
China is one of the biggest global consumers of timber- importing 40-45 million cubic meters of annually, which is expected to double by 2020. Half of all timber traded in the world ends up in China. China is also likely the largest importer of wood products with illegal origin (at least 80% of imports from key tropical countries, including Brazil, Cambodia, Cameroon, Congo-Brazzaville, and Indonesia, are estimated to be illegal.)India is also a major driver of global demand for timber and forest products (overall timber demand is expected to grow from 58 million cubic meters in 2005 to 158 million cubic meters in 2020. As India’s own capacity to produce wood products is limited, there are concerns that this will result in a large import market of illegal timber. China and India need a market for sustainable wood and forest-based products, similar to the standards established in the U.S. by certification bodies like the FSC. They also need stronger laws and better enforcement to reduce the trade in illegal wood. Yingtan, Jingxi Province, China. Photo credit: Reuters http://blogs.wsj.com/photojournal/2009/06/29/pictures-of-the-day-208/
Potential extent of forests in AsiaThis slide shows the potential extent of forests in China and India, if climate and soil were the only constraints. This is a good proxy for historic forest conditions. As you can see, forests should be quite abundant in Eastern and Southern China, as well as Northeast India. Source: http://www.slideshare.net/WorldResources/forest-and-landscape-restoration-intro
Current extent of forests in AsiaHowever, China and India have lost much of their historic forests, and are not living up to their “forest potential”.Only 6 % of China’s forest area is primary forest and 23% of India’s.The rest is either naturally regenerated or planted – these have less biodiversity and a reduced ability to store carbon.
But both China and India have extensive opportunities for restoration and reforestation.India has ambitious reforestation and restoration plans, and has long-running afforestation programs. From 1980-2005, India afforested 34 mha of land in total. In the next decade, India plans to afforest another 20 mha. China as embarked on a series of extensive reforestation and restoration programs. Since 2000, China annual increased its forest cover by 11,500 square miles.One program began as an effort to stabilize soil and control erosion after mudslides and floods in 1998 killed 4,000 people and displaced 18 million. The 10-year Sloping Land Conversion Program (SLCP) seeks to restore 37 million acres of farmland into forest or grasslands on slopes in the Yangtze and Yellow River Basins. This $40 billion program has been praised by many (see PNAS study from Stanford). Some reforestation programs have been criticized for replacing diverse forests with monocultures and tree plantations, or planting non-native species that are ill-adapted to China’s climate. Source: http://www.wri.org/map/global-map-forest-landscape-restoration-opportunities
Air pollution is the fifth leading cause of death in India, with 620,000 premature deaths in 2010. This is up from 100,000 in 2000 – a six-fold increaseGlobally, air pollution-related deaths have increased by 300 per cent since 2000. About 65 per cent of these deaths occur in AsiaSource: http://www.cseindia.org/content/air-pollution-now-fifth-largest-killer-india-says-newly-released-findings-global-burden-dise
Ambient PM pollution in China is the fourth leading cause of death – linked to 15% of deaths in total (Source: http://viz.healthmetricsandevaluation.org/gbd-compare/) Global Disease Burden StudyCould this be China’s Silent Spring? Source: http://blogs.wsj.com/chinarealtime/2013/02/01/beijings-murky-air-pollution-measures/ US AQI: In the United States, concentrations are converted to the “Air Quality Index” using breakpoints defined in the CFR. 199 is one point shy of ‘very unhealthy”. Anything above 300 is considered hazardous.Air pollution indicator dashboard?Beijing average vs. world - http://www.flickr.com/photos/michaelhenley/1072393454/
“The estimated emissions gap in 2020 for a “likely” chance of being on track to stay below the 2oC target is 8 to 13 GtCO2e (depending on how emission reduction pledges are implemented), This is up from 6 to 11 GtCO2e in last years’ Bridging the Emissions Gap Report. The gap is larger because of higher than expected economic growth and the inclusion of “double counting” of emission offsets in the calculations.
New data from the National Bureau of Statistics shows that as of 2012 China is looking good to meet its targets:Energy Intensity is falling. Power consumption grew by 5.5% in 2012– less than half what growth rate was in 2011.Non-fossil fuels accounted for over 9% of total energy consumption in 2012 (up from 8.6% in 2010)CO2 only increased by just over 3% in 2012 vs. 9% increase in 2011.[Source: Dr. Melanie Hart, Center for American Progress (http://www.chinafaqs.org/blog-posts/chinas-new-leadership-confronting-energy-climate-and-environmental-challenges) ]China’s coal consumption remains significant, but is expected to plateau by 2020 and renewable energy deployment continues to ramp up (IEA WEO 2012)China is considering4 major measures that may help reign in coal:New steps on a Resource tax on coal production12th 5YP on Energy Development provides for a cap or“expected target” on national coal production Carbon trading (pilots expected to be operational this year, which may lead to a national system)New steps in Grid modernization (such as providing easier access for distributedrenewable energy projects)Tangible interests are driving continued progress:Economic Competitiveness (the 12th Five Year Plan identifies 7 “Strategic Emerging Industries”, 5 of which are clean tech- related)Energy securityEnvironmental Protection (Air Quality crises, growing civil unrest, and awareness of climate impacts)Climate change negotiations (China desires to be seen as a leader internationally, especially as regards developing countries) Renewables targets were increased to the levels in this chart after the initial release of the 12th Five Year Plan “Stock Volume” refers to the above-stump volume of living trees measured from the bark up to the treetops. China has just adopted new air quality standards on SOx, NOx, PM2.5, and Mercury (new ChinaFAQs fact sheet forthcoming) Total energy consumption from 2010 was 70% coal, about 18% oil, and the remaining his hydro, gas, with very small amount of nuclear and renewables.Sources for renewables targets: http://www.reuters.com/article/2011/12/15/us-china-renewables-idUSTRE7BE0H320111215 (solar)http://www.theclimategroup.org/our-news/news/2011/9/1/china-amps-up-clean-energy-targets/
Carbon Trading Pilots in 7 Provinces & Cities:Beijing, Tianjin, Chongqing, Shenzhen, Shanghai, Guandong, Hubei Low-carbon plans for designated provinces and cities Allocated Energy Intensity Reduction Targets for all provinces and municipalities Official “Barometer” for progress on regional energy goalsOn Carbon Trading, each regional pilot will likely explore different approaches in order to learn best practices. Source identifying which regions are participating was a ChinaDaily article citing an anonymous NDRC official (http://www.chinadaily.com.cn/bizchina/2011-11/23/content_14145909.htm)The private sector is also joining inA fortunate 500 company, Baosteel ranks as the fourth largest iron and steel company in the world. The company has invested heavily on product life cycle assessment in order to strategize its product offerings. Putting together a team that are made up of 18 departments to work on the product life cycle assessment, Baosteel is able to identify strategic products to help mitigate climate change. As of 2011, Baosteel is offering 17 specialized steel products that will reduce downstream GHG emissions in car, beverage, home appliance, power, construction and other industries. Source: People’s Daily (http://english.peopledaily.com.cn/90001/90778/90862/7110049.html)Also see Wang Ke on WRI Insights: NDRC launched the National Pilot Program on Low-Carbon Provinces and Cities. The program directs five provinces- Guangdong, Liaoning, Hubei, Shaanxi and Yunnan , and 8 cities- Tianjin, Chongqing, Shenzhen, Xiamen, Hangzhou, Nanchang, Guiyang and Baoding, to formulate supporting policies in their respective provincial/municipal five-year plans with regard to low carbon development. (http://insights.wri.org/open-climate-network/2011/09/role-cities-meeting-chinas-carbon-intensity-goal) China’s National Development and Reform Commission (NDRC) recently released a “barometer” to show regional progress toward energy conservation goals in the first half of 2011. (It is unclear whether this barometer will be updated going forward)
The action plan established eight national missions running through 2017. The eight national missions are the National Solar Mission, National Water Mission, National Mission on Sustaining Himalayan Eco-system, National Mission on Enhanced Energy Efficiency, National Mission on Strategic Knowledge for Climate Change, National Mission for a Green India, and National Mission on Sustainable Habitat.The government has recently released a new 5-year target of 30,000 GW of renewable energy (across all sectors) installed by 2017.Source: http://www.indiaclimatemissions.org/detailreport.php?mid=2&tabId=0
One study shows that a 10% intensification of the current 1-in-100-year storm surge combined with a prescribed 1m SLR could affect around 7.6 million people in India. Source: http://www.metoffice.gov.uk/media/pdf/7/i/India.pdfTake Mumbai – with 12 million inhabitants and set on islands and reclaimed land, one study put the cost of one meter of SLR at $71 billion. Floods have already threatened the subway system. (Source: http://www.eastwestcenter.org/fileadmin/stored/pdfs/api096.pdf)Source for slide notes: IPCCMelting Glaciers and permafrost: May provide more water initially but over time means less freshwater is available.
In Copenhagen, we saw the creation of the BASIC alliance – Brazil, South Africa, India, and China. How these four act in the lead up to 2015 will have a huge impact on whether the world sees a global deal on climate change.
China and India both positioning themselves as “developing” countries who should be allowed to continue on their growth trajectories and be recipients of climate finance. This has implications for how and http://unfccc.int/files/documentation/submissions_from_parties/adp/application/pdf/adp_china_workstream_2_20130305.pdf
South-South financial flows are changing the nature of development finance and assistance. Between 2009 and 2010, two Chinese state-owned banks lent more money to other developing countries than the World Bank.Source: CDB and China Exim “signed loans of at least $110bn (£70bn) to other developing country governments and companies in 2009 and 2010, according to Financial Times research. The equivalent arms of the World Bank [IBRD and IFC, not IDA] made loan commitments of $100.3bn from mid-2008 to mid-2010, itself a record amount of lending in response to the financial crisis.” Dyer, Geoff, JamilAnderlini, and Henny Sender, “China’s lending hits new heights,” Financial Times, January 17, 2010. See also, http://www.bbc.co.uk/news/world-asia-pacific-12212936. ↩
Coal exported to China?http://www.eia.gov/coal/review/coal_consumption.cfmandhttp://www.eia.gov/coal/review/coal_exports_imports.cfm
All told, the United States and China exchanged more than $8.5 billion worth of clean energy goods and services in 2011- compared to a total trade relationship of over 1 trillionData source: Pew (http://www.pewenvironment.org/news-room/reports/advantage-america-the-us-china-clean-energy-technology-trade-relationship-in-2011-85899456253)
The Department of Commerce decided to impose tariffs on most solar panels imported from China (October 2012)Wind towers imported from China also face tariffs.Based on findings of dumping and subsidies.These trade disputes should be viewed in perspective.China also has trade complaints against the USTrade disputes among all trading nations are not uncommon, for example, the US and the EU regularly have trade disputesThe U.S. actually had a 1.63 billion clean energy trade surplus with China in 2011Trade in solar products continues with other countriesThere are indications that other countries without tariffs have increased production to fill the gap in imports from China(http://www.eenews.net/tv/transcript/1650)Image: http://www.flickr.com/photos/41864721@N00/3451530961/Suggested reading:DoC Fact Sheet: 23rd U.S.-China Joint Commission on Commerce and Tradehttp://www.commerce.gov/news/fact-sheets/2012/12/19/fact-sheet-23rd-us-china-joint-commission-commerce-and-trade Sources:Commerce fact sheet on Solar PV dumping (http://ia.ita.doc.gov/download/factsheets/factsheet_prc-solar-cells-ad-cvd-finals-20121010.pdf) NYTimes (http://www.nytimes.com/2012/10/11/business/global/us-sets-tariffs-on-chinese-solar-panels.html?_r=0)Renewable Energy World (http://www.renewableenergyworld.com/rea/news/article/2012/12/u-s-boosts-duties-on-china-wind-energy-as-trade-talks-open)Tech transfer for market access (http://www.commerce.gov/news/fact-sheets/2012/12/19/fact-sheet-23rd-us-china-joint-commission-commerce-and-trade)
Trade issues are perennially discussed between US and Chinese government trade officials. Areas of Progress:China has addressed some US concerns bilaterally:China agreed to drop local content requirements for wind turbine manufacturers in 2009 at the US-China Joint Commission on Commerce and TradeChina also reaffirmed in 2012 requiring technology transfer in exchange for market access is not allowed Clean Energy Research Center (CERC) Intellectual Property Agreement:The US and Chinese CERC participants jointly developed a framework for progress on protecting Intellectual Property in the CERCThis framework has buy-in from CERC industrial partners (Major US corporations like Duke Energy, Dow, and others)Application of the framework requires both parties to work out the detailsOne feature that is most promising is that both governments are involved, which raises confidence in the agreementAPEC:In late 2011, all parties, includingChina and the U.S., reached an agreement on a list of environmental goods on which to cut tariffs to 5 percent or less by 2015.Image: APEC (http://farm9.staticflickr.com/8177/7977268706_a8e4936966_b.jpg)Image: CERC (http://www.us-china-cerc.org/about.html)
Success in cleantech depends on things beyond the trade realm, such as encouraging innovation to develop the next generation of competitive cleantech productsCreating markets for low-carbon powerFinancing companies and projectsCompanies with new technologies require financing for growth and scaling-upCreating New KnowledgePre-commercial research is badly under-funded in the USProviding clear regulation based on consistent, long-term policiesClear regulation and permitting can lower risks for companiesEnsuring grid-connection for new RE projectsFurther reading: see Letha Tawney’sChinaFAQs blog (http://www.chinafaqs.org/blog-posts/getting-our-act-together-solar-%E2%80%93-elements-winning-strategy)Image: (http://www3.law.harvard.edu/journals/elr/files/2011/11/innovation1.jpg)
The US is specifically challenging India’s national solar policy, which was launched in January 2010, requiring developers of solar projects to use modules and cells manufactured in India. India may expand the program to include thin film technologies – represent a large portion of solar-related US exports to India .China had similar requirements for wind that were later dropped in negotiationsSource: http://www.ft.com/intl/cms/s/0/56451546-7087-11e2-a2cf-00144feab49a.html#axzz2NuBv8uSWVolune of trade: http://www.census.gov/foreign-trade/balance/c5330.html
Photo Credit: LluisRibes Portillo
This transition is different from the last transition. In 2001, China was just ramping up for a period of intense economic growth. In 2011, shortcomingsof this model are now recognized by the leadership, including severe pollution resulting from dependence on coal.Because China is midway through its 12th Five Year Plan, it will likely “stay the course” on its climate and energy policies in 2013The current Five Year Plan is dedicated to ensuring that China’s economy moves toward low-carbon(the 12th Five Year Plan identifies 7 “Strategic Emerging Industries”, 5 of which are clean tech- related)http://www.flickr.com/photos/remkotanis/8165950984/http://news.xinhuanet.com/english/special/18cpcnc/2012-11/08/c_131959814.htm
Despite India’s international public postures, internally SD is top of the agenda, reflected for example by the title of the 12th Five Year Plan is titled as “Faster, More Inclusive and Sustainable Growth” There is a dedicated section on SD that covers key priority areas including water, energy, livelihoods etc wherein environmental imperatives are articulated in tandem with developmentSome useful quotes from the Plan So the discourse is right and ambitiousCo-benefits framework set to play an important role in India’s response to SD, particularly climate changeIt is interesting to note on social and economic agenda, the political parties are deeply divided. But when it comes to environment/SD, there is not much divide; in fact on climate change the moral argument of ‘equity’, historical responsibility resonate across political parties. So on sustainable development as a macro concept, it is the government at that point of that time decides India’s positionAnother interesting positive example is the ‘direct cash’ transfer that Jairam Ramesh so passionately pursuing that set to change the way service delivery in India done now (this is the by way is a classic example of south-south learning as the Indian experiment is directly from Brazil “BolsaFamilia’ scheme that President Lula so popular in that country; he was in India recently and talked a lot about India’s new scheme)“Faster, More Inclusive, and Sustainable Growth” – title of the 12th five year plan. The 12th Five year plan (2012 – 2017) includes the following priorities:1. Advanced Coal Technologies2. National Wind Energy Mission3. National Solar Mission4. Technology Improvement in Iron and Steel Industry5. Technology Improvement in Cement Industry6. Energy Efficiency Programmes in the Industry7. Vehicle Fuel Efficiency Programme8. Improving the Efficiency of Freight Transport9. Better Urban Public and Non-motorized Transport10. Lighting, Labelling and Super-efficient EquipmentProgramme11. Faster Adoption of Green Building Codes12. Improving the Stock of Forest and Tree CoverSource: http://planningcommission.gov.in/plans/planrel/12thplan/pdf/vol_1.pdf
On climate:I don’t see this as a priority in the elections. It will be about corruption, nepotism, economy, budgets, FDI, aamadmi etc.If anything rural electrification can come up – but considering it hasn’t come up ever in the past, I don’t know if it will make a big dent. Nothing on CC. except if some climate disaster strikes between now and elections On EnergyThere is definitely a big push towards nuclear and RE. we can expect that to continue. Not so much about EE. Especially with BEE in a mess now.Sustainable transport, housing, water, urban infrastructure etc. will all be serious issues. I see state level work continuing as a big focus. Land and WaterFrom a resource perspective water will be a growing problem. Not just for agriculture, but also for cities.The impact of floods and droughts will also be serious – especially from the food security perspective.And land acquisition will continue to pose challenges, as industry and infrastructure needs will come in conflict with decentralized and local needs. The absence of a transparent and accountable governance mechanism that people trust doesn’t help situations.Photo credit:
GDP data for 2011: http://databank.worldbank.org/databank/download/GDP.pdf Co2 Data for 2011: http://edgar.jrc.ec.europa.eu/overview.php?v=CO2ts1990-2011 Steel, coal, timber, palm oil, fish: Chatham House Resources Futures http://www.resourcesfutures.org/#!/more-more-and-more Ranking?
1. IMPACT OF CHINESE AND INDIANECONOMIC BOOMS ON THEENVIRONMENT Manish Bapna Executive Vice President, WRI (Photo: Andreas/Flickr)
2. AGENDA1. WRI Overview2. China and India’s Rising Economic Power3. Resource Snapshots4. Deep Dives5. Politics Going Forward
3. WRI’S MISSION | To move humansociety to live in ways that protectEarths environment and its capacityto provide for the needs and aspirationsof current and future generations.
4. WRI’S WORK | We work withgovernments, companies, and civil societyto build solutions to urgent environmentaland development challenges.
5. WRI’S APPROACH Managing for Results Scaling IMPACT Analysis Partnerships
6. WRI GLOBAL PRESENCE Institutional Project staff on ground, deep partnership, and/or project office At least one partner
7. AGENDA1. WRI Overview2. China and India’s Rising Economic Power3. Resource Snapshots4. Deep Dives5. Politics Going Forward (Photo: World Bank Photo Collection/Flickr)
8. GDP GROWTH: WHERE NEXT? 16 14 12 China 2013 (8.2%)GDP growth (%) 10 8 6 India 4 2013 (5.9%) 2 0 1994-2003 2005 2007 2009 2011 2013(IMF, 2012)
9. SHIFTING POWERS
10. EXPLOSION OF THE MIDDLE CLASS
11. EXPLOSION OF THE MIDDLE CLASS 3 billion added by 2030 90% of growth in Asia – mostly India and China (Photo: ben124/Flickr)
12. CHINESE CITIES GROWING QUICKLY530 Million people living in cities in 2005 78% urban930 Million people living in cities in 2025 contribution to GDPINDIAN CITIES SLOWER315 Million people living in cities in 2008 39% Urban contribution to530 Million people living in cities in 2025 GDP(McKinsey Global Institute 2012, )
13. ARE WE RUNNING OUT?Price trends of major commodity bundles (real 2005 dollars) 250 Food Energy Timber 200 Fertilizers Metals and Minerals Price in real 2005 dollars 150 100 50 1960 1970 1980 1990 2000 2010(WRI chart using World Bank data, 2012)
14. CHINA DRIVES GLOBAL CONSUMPTIONShare of the world total 53% 47% 48% 45% 28% Iron Ore Cement Steel10% Coal CO2 GDP
15. AND INDIA IS A SIGNIFICANT PLAYERShare of the world total 8% 6% 5% 4% 3% Coal CO2 Steel GDP Oil
16. CHINA’S ENVIRONMENTAL DEGRADATIONIS MASSIVELY COSTLY 10Cost of environmental degradation as 9.2% OF GDP 8 % of GDP equivalent 6 4 2 0(World Bank reports, 2005-2012)
17. AGENDA1. WRI Overview2. China and India’s Rising Economic Power3. Resource Snapshots4. Deep Dives5. Politics Going Forward
18. COAL | PROPOSED NEW COAL POWER CAPACITY(WRI, 2012)
19. COAL | PROPOSED NEW COAL POWER CAPACITY INDIA(WRI, 2012)
20. COAL | PROPOSED NEW COAL POWER CAPACITY CHINA INDIA(WRI, 2012)
21. COAL | COAL DEVELOPMENT AND WATER RISK
22. COAL | NEGATIVE HEALTH IMPACTS Average PM 2.5 Concentrations 2008 - 2010
23. NATURAL GAS | SHALE GAS PUTS DOWNWARDPRESSURE ON NATURAL GAS PRICES 10 2009Average Henry Hub spot price ($) 8 6 4 2 0 1990 1995 2000 2005 2010 2015 2020 2025 2030(EIA, 2009-2012)
24. NATURAL GAS | SHALE GAS PUTS DOWNWARDPRESSURE ON NATURAL GAS PRICES 10 2009 2010Average Henry Hub spot price ($) 8 6 4 2 0 1990 1995 2000 2005 2010 2015 2020 2025 2030(EIA, 2009-2012)
25. NATURAL GAS | SHALE GAS PUTS DOWNWARDPRESSURE ON NATURAL GAS PRICES 10 2009 2010Average Henry Hub spot price ($) 8 2011 6 4 2 0 1990 1995 2000 2005 2010 2015 2020 2025 2030(EIA, 2009-2012)
26. NATURAL GAS | SHALE GAS PUTS DOWNWARDPRESSURE ON NATURAL GAS PRICES 10 2009 2010Average Henry Hub spot price ($) 8 2011 6 2012 4 2 0 1990 1995 2000 2005 2010 2015 2020 2025 2030(EIA, 2009-2012)
27. NATURAL GAS | SHALE GAS RESERVES 100 – 500 trillion ft3 500- 1000 trillion ft3 1,000 + trillion ft3 N.B. Estimates for Russia and the Middle East are not included(EIA, 2011)
28. RENEWABLE ENERGY | CHINA LEADSRenewable energy installed capacity 140 120 100 Gigawatts 80 60 40 20 0 China China United Germany Spain U.S. Germany Spain ItalyItaly Japan Japan India India France France Brazil Brazil States(Pew, 2012)
29. RENEWABLE ENERGY | INDIATotal Invested in 2011: $10.2 billionDistribution by Sector, 2005 – 2011 15% 2% Wind Solar Biofuels 52% Other Renewables 31%
30. RENEWABLE ENERGY | CHINATotal invested in 2011: $45.5 billionDistribution by Sector, 2005 – 2011 3% 1% 13% Wind Solar 14% Other Renewables Biofuels 69% Efficiency & low carbon Tech/services
31. RENEWABLE ENERGY | CHINA’S GOALS FOR 2020 160 120 GW of Energy Installed capacity 80 Target 40 0 Wind Biomass Solar(Pew, 2012)
32. RENEWABLE ENERGY | INDIA’S GOALS FOR 2012 20 16 GW of Energy 12 Installed capacity 8 Target 4 0 Wind Biomass Solar(Pew, 2012)
33. WATER | BASELINE WATER STRESS
34. WATER | WHERE FLOOD RISK IS GREATEST
35. WATER | WHERE DROUGHT THREATENS
36. FOOD | WATER FOR AGRICULTURE IN 2025
37. FOOD | CROP YIELDS UNDER THREAT (World Bank, World Development Report 2010)
38. FORESTS | DEMAND DRIVES GLOBAL DEFORESTATION
39. FORESTS | POTENTIAL EXTENT Potential Extent of Forests and Woodlands Where forests would grow if climate and soils were the only constraint
40. FORESTS | CURRENT EXTENT Current Extent of Forests and Woodlands Where they are today
41. FORESTS | RESTORATION OPPORTUNITIES
42. CITIES | INDIA’S AIR POLLUTION Thousand premature 630,000 deaths from air pollution in 2010 78% Of Indian cities exceeding PM10 limits(Institute for Health Metrics and Evaluation 2012, )
43. CITIES | CHINA’S AIR POLLUTION Days in January 14 with AQI “very unhealthy” or “hazardous” January’s average199 PM 2.5 air quality index – “unhealthy”
44. AGENDA1. WRI Overview2. China and India’s Rising Economic Power3. Resource Snapshots4. Deep Dives • Climate Change • Resource Consumption • Clean Energy Trade War5. Politics Going Forward
45. CLIMATE CHANGE | TOTAL & PER CAPITA EMISSIONS 12,000 30 10,000 25 MT CO2e per Capita 8,000 20MT CO2e Total 6,000 15 4,000 10 2,000 5 0 0
46. THEY MUST ACT AND THEY AREAmbition in China’s 12th Five Year Plan ↓16% ↓17% Energy intensity Carbon intensity 11% ↑1.25 M Non-fossil fuel hectare increase in energy domestic forest coverSources: Deborah Seligsohn on ChinaFAQs; The Climate Group; Reuters
47. CHINA’S CARBON TRADING PILOTS Carbon Trading Pilots Low-Carbon Provinces & Cities
48. THEY MUST ACT AND THEY AREIndia’s National Action Plan for Climate Change ↓20-25% Emissions intensity reduction by 2020 under 2005 levels20 GW 98 MTSolar Power CO2-eq. savings byinstalled by 2022 2015 from energy efficiency by 2020
49. THEY MUST ACT AND THEY ARE - TBCIndia’s National Action Plan for Climate Change• PAT Scheme• Carbon Tax on coal (about $1 per ton)• Feed in Tariffs (FITs) for Solar and Wind
50. THEY WILL BE HURT Weather: Typhoons and heat waves have increased in frequency and intensity Sea-Level Rise: projected increases would inundate thousands of kilometers Water: increase flooding and drought expected associated with melting glaciers and permafrost(Photo: Bert van Dijk/Flickr)
51. SHIFTING POLITICS - BASIC
52. SHIFTING POLITICS “Any attempts to… recategorize developed and developing countries would delay progress…with nothing to come at the end.” – China submission to UNFCCC Process, March 2013
53. AGENDA1. WRI Overview2. China and India’s Rising Economic Power3. Resource Snapshots4. Deep Dives • Climate Change • Resource Consumption • Clean Energy Trade War5. Politics Going Forward
54. INCREASING OVERSEAS INVESTMENT
55. 50% foreign direct investment going to extractive industries $16bn 2011 Chinese investments in Africa (Photo: ENOUGH Project/Flickr)
58. AGENDA1. WRI Overview2. China and India’s Rising Economic Power3. Resource Snapshots4. Deep Dives • Climate Change • Resource Consumption • Clean Energy Trade War5. Politics Going Forward
59. CLEAN ENERGY TRADE WITH CHINA The size of U.S.-China TradeImports from China Imports from China Total Exports to China Other Exports to China Solar 0 100 200 300 400 500 Wind Billions of US dollars 0 100 200 300 400 500 (Pew Research Center 2012)
60. CLEANTECHTRADE WITH CHINAAreas of DisputeU.S. tariffs on solar panelsand wind towers importedfrom ChinaChinese conducting an anti-dumping and subsidyinvestigation on importedpolysilicon from the US,EU and S. Korea
61. CLEAN ENERGY TRADE WITH CHINAAreas of Progress Areas of Progress on Trade (all is not bleak)
62. CLEAN ENERGY TRADE WITH CHINAGoing ForwardCompetitiveness in clean tech depend significantly on factors outsidetrade • Creating markets for low-carbon power • Financing companies • Creating new knowledge • Providing clear regulation
63. CLEAN ENERGY TRADE WITH INDIAHiccups Ahead?US Challenging Local-Content Requirements in the National Solar Mission
64. AGENDA1. WRI Overview2. China and India’s Rising Economic Power3. Resource Snapshots4. Deep Dives5. Politics Going Forward
65. 18TH NATIONAL CONGRESSOF THE COMMUNIST PARTYOF CHINA, NOVEMBER 2012“We must fully implement theoverall plan for promotingeconomic, political, cultural, social and ecological progress.”- PRESIDENT HU (Photo: Remko Tanis/Flickr)
66. THEY MUST ACT AND THEY ARE“Faster, More Inclusive, and Sustainable Growth” “No development process can afford to neglect the environmental consequences of economic activity, or allow unsustainable depletion and deterioration of natural resources” - Indian Planning Commission’s 12th Five Year Plan
67. GEARING UP FOR NEXT ELECTIONS IN 2014 What role for the environment?(Photo: Al Jazeera English/Flickr)
68. IMPACT OF CHINESE AND INDIANECONOMIC BOOMS ON THEENVIRONMENT Manish Bapna Executive Vice President, WRI (Photo: Andreas/Flickr)
69. DRIVING GLOBAL CONSUMPTIONShare of the world total 50% 40% 30% India China 20% 10% 0% GDP CO2 Steel Coal Timber Palm Oil Fish(World Bank reports, 2005-2012)