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AnonymousInactiveA Big, Dirty Growth Engine
Pollution still chokes China, but green technology is starting to emerge
The 2008 Beijing Olympics don’t look like much today. At most of the
sites around the city, ground has barely been broken. But look a little
closer and you’ll find that the games have already had a dramatic
impact in the form of a thorough pollution clean-up.China’s leadership knows the Olympics may define the country’s
international image for decades. So officials have spared nothing in
their efforts to show how green they can be. On clear days it’s now
possible to look down Changan Avenue and see the peaks of the Western
Hills, which had been obscured for years. Most homes and businesses
have converted from coal heat to natural gas, many diesel-belching
tractors and trucks have been banned from city streets, and 58% of
sewage is treated. Beijing has moved nearly 130 factories out of the
city and is building cleaner, gas-fueled power stations while
installing scrubbers in older ones. It’s even putting up wind turbines
to help power the Olympic village. When the Games start three years
from now, the city and its residents will have spent $13 billion on the
transformation. By the time the Olympic torch is passed, a sparkling
Beijing may well wow the world.And the world will be misled. The reality is that despite all the
effort spent on cleaning up the capital and a handful of other big
cities, China is at best at a standstill in its fight against
environmental degradation. For all its efforts, China’s unrestrained
growth makes it one of the world’s worst polluters. Most of the nation
is still reeling from the devastation wrought by three decades of
communist industrial development and the subsequent 25 years of
quasi-capitalism. In 2025, China will consume 14.2% of the world’s
energy, compared with 9.8% in 2001. Because most of China’s electricity
comes from power plants that burn high-sulphur coal but lack effective
emissions controls, acid rain falls on one-third of the country. And
70% of its lakes and rivers are heavily polluted, largely because more
than 80% of China’s sewage flows untreated into waterways. Six of the
world’s 10 most-polluted cities are in China, according to the World
Bank, which estimates that pollution costs China more than $54 billion
a year in environmental damage and health problems.China’s soaring energy use and resulting pollution are a serious threat
to the country’s continued prosperity and growth, not to mention the
well-being of its citizens. China has spent more than $85 billion on
environmental cleanup in the last five years and could shell out $380
billion — 4% of gross domestic product — between now and 2010. But
even those outlays aren’t enough to offset the pollution generated by
the country’s annual growth rate of more than 8%. The problems are
compounded by China’s inefficient use of electricity, oil, and coal.
China consumes nearly five times as much energy as the U.S. to produce
each dollar of GDP — and almost 12 times as much as Japan. Alarmingly,
the nation is getting less efficient, not more. After making steady
progress in energy efficiency for two decades, China has been consuming
energy at a rate faster than its GDP since 2002.
PAINFULLY UNDERSTAFFED
IN most of the country, enforcement of environmental regulations is
lax. The State Environmental Protection Administration (SEPA), which
oversees the environment nationally, is woefully understaffed, with a
workforce of just 300 in Beijing and only 100 more for the rest of the
country. That means monitoring and enforcement generally fall to local
officials, or even factory managers — whose first priority is to
create jobs, whatever the environmental cost. A chromium factory was
ordered to close in May, 2004, after dumping toxins into a river for
five years. But just two months later the local environmental
protection bureau let the plant begin producing again even though no
new environmental protection measures had been installed, the
state-controlled China Youth Daily reported. “The environmental bureaus
of local governments would rather develop GDP than perform their role”
as pollution watchdog, says Zhao Jian Ping, senior energy specialist at
the World Bank in Beijing.What’s more, even where waste-treatment gear is installed, some Chinese
companies opt to pay fines rather than operate expensive equipment. The
cost of cleaning up wastewater from a yeast plant can reach $610 per
1,000 cubic meters, while the penalties are just $490 per 1,000 cubic
meters. Furthermore, noncompliance is preferred by local officials,
since fines shore up budgets. SEPA says that while most major
industrial plants have water-treatment facilities, one-third don’t
operate them at all and another third only use them occasionally.
CHEAP AND SOOTY
Coal may be the biggest culprit. China has tens of thousands of small
mines that pay scant attention to environmental concerns or safety.
Such neglect helps keep costs down, making coal the preferred source of
energy. Even though the price of Chinese coal has jumped 29% in the
past three years, that’s far below the 79% increase globally. So
coal-based electricity generation costs a fraction of alternative
energy sources. In Inner Mongolia, for example, wind power costs about
6 cents per kilowatt hour, more than twice the price of coal power.The good news is that plenty of companies selling green technology are
sensing an opportunity in China. Chinese enterprises are buying
everything from scrubbers for coal-fired power plants to alternative
power sources such as wind turbines and methane gas from decomposing
solid waste. China will invest $61 billion in city wastewater treatment
facilities between now and 2010. Scrubber sales could reach $1 billion
a year. “China is at a crossroads, shifting from a focus on buildup of
capacity to more environment-friendly and energy-conserving
technologies,” says Steven Fludder, chief executive of GE Power China,
which has sold more than $1 billion worth of natural gas and wind
turbines to the country since 2003.GE isn’t the only foreigner helping out. Some 400 non-Chinese companies
now sell pollution-control equipment in the country. A joint venture
between Westport Innovations of Vancouver, B.C., and Cummins Inc. has
equipped more than 2,500 buses in Beijing with engines powered by
natural gas at a total cost of $26 million. Veolia Environnement of
France has invested $800 million in 10 water-treatment projects — some
under contracts that stretch to 20 and 50 years and offer a 12% rate of
return — and two facilities that generate power with methane gas
released from solid waste. Sweden’s Purac Environmental System has sold
equipment to dozens of companies in China. Its biggest customer,
state-owned Huatai Paper in Shandong Province, has spent nearly $7
million to clean up effluent that looked like “thick, cloudy Guinness
beer” flowing into the river, says Purac China chief Lennart Huss.Those foreigners are facing increased local competition. Beijing
Monitor Environment Technology Co. last year saw revenues of $3.1
million selling emissions-monitoring equipment to power and
petrochemical plants. Beijing-based Golden State Environment Corp. had
sales of $60 million last year and has worked on more than 2,000
water-treatment plants and landfills in some 250 cities. And Anhui
Guozhen Environmental Protection Science & Technology Co. says it
has won five contracts worth $13 million annually to build and operate
water-treatment plants for cities around the country.One promising development occurred on Feb. 1, when the Kyoto Protocol
on greenhouse gases took effect. The accord allows companies in
developed countries to purchase gas emission “credits” from enterprises
in developing nations. Effectively, corporations in Japan and the West
buy the right to keep emitting carbon dioxide pollution. But under the
terms of the protocol, the companies that sell their emission credits
then have to reduce their pollution levels, the cost of which is
presumably covered by the proceeds of the trade.Such deals in essence subsidize the sale of pollution-control equipment
in the developing world, where it’s often cheaper to make bigger gains
in emissions reduction. Three Chinese projects are benefiting from the
trade in credits: a wind farm on the grasslands of Inner Mongolia, a
power station fueled by methane released during coal mining in Shanxi
Province, and a power-generation project using methane produced by
solid waste in Anding, south of Beijing. “This is the beginning of a
market that has vast potential,” says Andres Liebenthal, head of
environment and social development for China at the World Bank’s
Beijing office. Clean air is a commodity China desperately needs. -
AuthorAugust 31, 2005 at 10:21 AM
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