Earlier this summer, Energy Innovation CEO Hal Harvey gave a presentation at the Equilibrium Capital Forum, an annual conference that brings together influential figures to discuss investment opportunities in clean energy, green real estate, and natural resource management.
Hal’s presentation, “What is China Doing About Climate Change?” began with an overview of China’s current energy and climate landscape. Within the last five years, China has surpassed the United States as the largest energy consumer and emitter of carbon dioxide, caused by China’s several-fold increase in coal consumption. The country, which once contributed less than one-tenth of the world’s greenhouse gas emissions, is now responsible for nearly 25 percent of emissions.
In addition to its contribution to global emissions, this increase in coal consumption has also led to crippling pollution levels in some of China’s cities, reaching levels several times above what the World Health Organization considers to be healthy.
As China becomes wealthier and its middle class continues to grow, the country must consider how it will invest for the future: will it make brown choices that continue to prioritize fossil fuels, or will it make green choices that support clean energy and investment in sustainable infrastructure? Hal refers to this as China’s horse race; the decisions the country makes today will strongly dictate the future direction of its economy and the quality of life for its citizens for decades to come.
Recent investments in energy demonstrate China’s push towards a cleaner future. Since 2005, solar and wind capacity has increased at rates that far exceed that of coal. This sounds like great news, however non-hydro renewables still barely make up two percent of China’s total electricity mix, while coal continues to make up 80 percent of the pie. So while renewables capacity growth has been charging ahead, it still must increase significantly before it moves the needle on reducing emissions from China’s power sector.
More and more, China’s government has been taking climate action to strengthen its economy and improve citizen quality-of-life. Goals outlined in the Third Plenary emphasize eco-civilization – the balanced relationship between humans and nature – which is achieved through proper protection and pricing for valuable natural resources and controlling pollution emissions across enterprises. As more Chinese citizens migrate into urban regions, building sustainable cities will be crucial as well. Hal discussed several best practices for urban sustainability, such as building mixed-use neighborhoods, encouraging walking and biking, establishing high-quality transit options that match housing density, and discouraging car use.
Hal’s presentation concluded with a discussion of investment challenges and opportunities within China. Advances in carbon mitigation need to be deployed in real projects and prove their value with real statistics. These projects can be supported through institutional policies as well as municipal practices. While a snapshot of China’s energy landscape today may still look dark, China’s ability to take swift policy action and deploy capital puts the country in a position to align economic growth with quality of life for its citizens.