The Third Revolution by Elizabeth C. Economy

Author:Elizabeth C. Economy
Language: eng
Format: epub
Publisher: Oxford University Press
Published: 2018-02-21T16:00:00+00:00

The Campaign for Clean Air

Much like the leadership’s effort to address corruption or to develop the electric car market, its plans for tackling air pollution include short- and long-term campaigns. In advance of the G20 summit in September 2016 in Hangzhou, which brought together all the leaders of the G20 countries, for example, local officials declared a week-long holiday, provided free travel vouchers worth $1.5 billion, and focused their energy on sweeping out any sign of pollution. They closed and relocated factories, stopped all construction, and removed diesel-consuming buses from the road. Powerhouse SOEs, including Baoshan Iron and Steel and Sinopec’s Shanghai Petrochemical, either closed down for the duration or had production cut by 50 percent. Similar tactics were adopted in advance of the seventieth anniversary of the World War II Victory Parade in September 2015 and the APEC Summit in November 2014. For the parade, in addition to closing down factories and constructions sites, Beijing closed down nearly every steel mill, accounting for nearly 6.6 million tons in lost production.

Environmental experts are concerned that these short-term campaigns may take the place of more sustained efforts to address the air quality challenge. Polluting industries in Hebei, for example, were ordered to close down for forty-five days in fall 2016, likely contributing to a much improved PM2.5 average concentration for neighboring Beijing that year. The Chinese Academy of Engineering estimated that such short-term measures accounted for about 20 percent of the improvement in Beijing’s air quality.119 Plans are also in the works for provinces such as Henan, Shanxi, and Shandong to close as much as 30 percent of their aluminum-smelting capacity during November through March to reduce the smog around Beijing.

Forced factory closures in one province to benefit another, however, may contribute to political tensions. In March 2016 at the annual legislative session of the NPC, a number of officials complained about the pressures of a slowing economy and paying for environmental protection. Officials in Hebei, for example, reported that the effort to fight overcapacity in sectors such as steel and cement coupled with addressing pollution had cost the government $1.8 billion and 200,000 jobs.120

China’s undeniable progress in advancing clean energy production and consumption may also face some headwinds in a campaign environment, in which impressive timetables and targets are often set without consideration for the actual conditions on the ground. Already, 40 percent of the world’s new renewable power plants are in China,121 and in 2016 China invested $78.3 billion in renewable energy—exceeding both Europe ($59.8 billion) and the United States ($46.5 billion).122 Deputy Governor of the People’s Bank of China Yi Gang has said that China must make between 2 and 4 trillion RMB ($300 to $600 billion) in “green investments” over the next five years, but the government can only cover 15 percent of that. So the private sector, he suggests, will have to do most of the financing.123 Private sector interest, however, will depend heavily on whether China has put in place market incentives that make it financially worthwhile for the companies to invest.

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