China is pledging to cut the carbon intensity of its economy nearly in half by the end of the decade by becoming more energy efficient. Though this may sound promising, it doesn’t mean China will reduce its carbon emissions — in fact, quite the opposite.
“Carbon intensity is not an absolute measure, it’s a relative measure. It’s CO2 divided by GDP," Guan explains. "So there are two ways to reduce this figure: one way is to actually reduce CO2; the other way is to enlarge GDP.”
Reducing CO2 requires expensive technological improvements and takes a long time. So most of the provinces in China adopt the second way — enlarging GDP. One way to do this, for example, is to replace a small, inefficient coal power plant with a larger, more efficient modern plant. By doing this, they achieve energy efficiency improvements while boosting local GDP.
The problem, Guan says, is that the numbers can be misleading. The larger coal plant, while more efficient, produces more total emissions than the older, smaller plant. That means the province’s carbon intensity numbers improve even while its overall emissions rise.
From 2002 to 2009, Chinese electricity producers improved technology efficiency by 10 percent. During the same period, however, the size of the electricity sector increased about 10 times. “The overall economic carbon intensity [improvement] is largely offset by such carbon-intensive production,” Guan explains.
As often happens with pollution and climate change problems, the lack of progress is due to backward incentives. Many new, coal-burning facilities in China were built with loans from provincial banks who see them as a sure-fire investment. In addition, regional governments push the local banks to lend money to the developers of heavy industry because performance assessments for individual officials prioritize GDP growth when deciding whether that official is suitable for promotion or not.
Essentially, demand for products isn't affecting these decisions as much as the concern by local officials that they hit the numbers for GDP growth. Unless this changes, Guan says, carbon emissions will keep going up.
While overall emissions are a concern, China’s more pressing problems are air and water pollution, Guan says. Since reducing air pollution creates a “co-benefit” of CO2 reduction, Guan suggests that China would do better by applying stronger anti-pollution remedies, such as requiring an absolute cap on emissions in some regions and cities, instead of focusing on reducing carbon intensity.