China’s Water Crisis

Posted on June 6, 2011. Filed under: News | Tags: , , , |

Chinese worker cleaning polluted river

Chinese history is filled with environmental disasters. This stems from a myriad of sources, one being that the country maximized its usage of arable land as early as 1800. Environmental problems have been such a major issue in China that one of the key indicators of the fall of a dynasty was the inability of the emperor and his dynasty to prevent famine. Once famine became rampant, an emperor was said to be losing the “mandate of heaven,” social unrest would ensue, and a revolution would most likely oust the existing from power. The leader of the revolution would assume the roll of the Emperor and obtain the “mandate of heaven” by making sure his people did not starve. To this day, uprisings have been the key method of regime change in China. For example, after the Tiananmen Square protests in 1989, the Chinese Communist Party (CCP) was completely  reshuffled. For this reason, there is nothing that those in power in the CCP fear more than social unrest.

Linfen, China

Astonishing economic growth has helped China become a leading player on the global level, but there has been dire consequences. Rampant pollution as a result of immense foreign direct investment has caused serious environmental problems. The most pressing environmental issue for the CCP at the moment is the Yellow River. The Yellow River is called the birthplace of Chinese Civilization, but it has become so polluted because of poor regulation of industrial standards that the water is no longer safe for drinking. The river also happens to be the main source of water for most of northern China. The Chinese Government, however,has come up with a solution. It plans to redirect one third of the water from China’s largest river, the Yangtze river, 800 miles to connect with the Yellow river to essentially save the 440 million people living in northern China from dying of thirst.

From Nytimes.com

The plan is elaborate, lucrative, and insanely expensive. However, the $62 billion dollar price tag (twice that of the Three Gorges Dam) does not come with a guarantee. The 800 mile canal that would have to be built would run through several industrial zones and some Beijing officials have voiced skepticism as to whether the water redirected from the Yangtze would be safe for drinking when it reached northern China anyway.

Along with these problems, several hundreds of thousands of people have begun to be displaced by the Government to build the canal. This has caused several protest and uprisings since the compensation received for the requisition of land by the CCP has been, more often than not, inadequate. However, the Chinese government hopes that these protests will be less severe than the millions that would most likely rise against the government if northern China does not find a rapid solution to its water crisis.

There are several things to be taken away from this situation. Most importantly, almost everything in life is based on incentives. Local officials have a motive to bring in foreign companies and allow them to pollute, even though there are strict standards set by the central government. This happens for several reasons; 1) local officials are not paid directly by the central government, 2) local officials are rarely ousted from power, and 3) up to 70% of a local officials income can comes from selling foreign companies land. To attract more foreign companies, a official will provide more slack in terms of pollution so the companies can cut more costs. China will have to change this incentive structure if they ever want to combat pollution that continues to be unregulated.

This system has allowed for incredible amounts of foreign direct investment and bolstered China to become an economic power that may soon rival the U.S., but the Chinese governments shortsightedness in terms of the environmental impact of its economic policies may very well be the CCP’s downfall. The short term economic value of something may, in the long term, be much more expensive as a social cost. As the Chinese government is finding out very quickly, social costs do add up, and they can become very expensive. Unfortunately the impact of some policies are measured not only in dollars or RMB, but also in lives.

Doing the right thing and paying more for something that adds social value can be much less expensive in the long term. Clean wind power is and example of a product that does not harm the environment through practices such as mountain top removal. To not end up like the Chinese in terms of pollution, we have to remember that the incentive to purchase a product or run a business a certain way has to have more than monetary value, it also has to take into account the social good.

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A Chinese Omnivore’s Dilemma

Posted on August 2, 2010. Filed under: News | Tags: , , , |

A Chinese Omnivore’s Dilemma with Global Consequences…

 
With the U.S. climate bill stalled indefinitely, and an international agreement even further on the back burner, China’s rapidly growing demand for pork is an ominous trend for global climate change.
 
According to the USDA, Chinese consumption of pork has increased 127 percent from 1990 to 2010- accounting for 50% of total pork consumption worldwide. Factory farms in China are unable to cover this growing demand, so much of it is imported from the US and other countries. 
  
The problem is not just the increased import of U.S. finished pork product, but starts much earlier in the food chain.  Corn, a highly resource and carbon intensive crop, is the primary source of feed for livestock in the industrial process.  While the U.S. is the number one producer of corn worldwide, it is dedicating more corn to ethanol production and will not be able to meet growing Chinese demand. Chinese corn will likely come from countries such as Argentina and Brazil, where they will have to convert forests and grasslands into cornfields, eliminating their ability to sequester carbon.
 
Without a comprehensive international climate agreement that could cover issues including chemical manufacturing, land use, agriculture, and trade, this kind of unsustainable growth remains unchecked, leaving the environment to suffer the consequences. And that’s a real omnivore’s dilemma!
Check out this Grist article for more on the issue.
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China’s New Solar City

Posted on May 24, 2010. Filed under: News, Recommendations, Uncategorized | Tags: , , , |

Many solar panel companies have developed in both Europe and United States, and now more developing countries wanted to want to lower their carbon footprint as well, using solar panels. China has invested 34 billion dollars on both solar panels and wind turbines, double the amount of money as the United States.

In Dezhou, a city located in northern China, was acknowledged for raising poultry, and however now is known as ‘China’s Solar City.’  Huang Ming (president of Himin Solar Energy) has created the Himin Solar Energy Group, which is now currently ‘the biggest solar energy production base in the whole world.’ Some of the company’s products include solar lights, PV lighting products, solar panels, solar water heaters, and solar collectors. Huang Ming also created a low carbon five star hotel and now working on eco friendly apartment complexes. He mentions, in an interview at his corporate head quarters, “renewable energy doesn’t mean people have to be uncomfortable.”

At first, Huang Ming was an oil industry engineer, working at a petroleum research institute; however, he did not feel right about the impact oil had on the environment.  Thus, he created this company as a kind of ‘experiment’ to see if it would be successful in China. His heating devices and solar panels became quite popular in the city of Dezhou. Many villagers, especially farmers can now use hot water for showers regularly, rather than using communal bathrooms a couple times a month.

Some argue, that solar panels will help the economy minimally and decrease China’s carbon footprint to a certain extent. They believe that China will still rely heavily on fossil fuels for a lot of their energy. Huang Ming admits this argument, but later says “solar energy a drop in the ocean,” but has big plans for the future!

See article here

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And China Takes the Lead . . .

Posted on February 17, 2010. Filed under: News | Tags: , , , , , , , |

China has overtaken erstwhile leaders Denmark, Germany, Spain and the United States to become the world’s largest maker of wind turbines.  China is already the world’s largest manufacturer of solar panels. 

This news comes just after President Obama’s public edict proclaiming the need for America to lead in the clean energy revolution.  President Obama said “We can put Americans to work today building the infrastructure of tomorrow.  From the first railroads to the Interstate Highway System, our nation has always been built to compete. There’s no reason Europe or China should have the fastest trains, or the new factories that manufacture clean energy products.  The nation that leads the clean energy economy will be the nation that leads the global economy.  And America must be that nation.”

Yet many Western and Chinese executives expect China to prevail in the energy-technology race.  China enjoys several advantages that are enabling its meteoric rise in clean energy.  The government of China has been investing heavily in upgrading its electricity grid, state-owned banks provide generous financing to incentivize clean energy, regulators have set mandates for power generation to use more renewable energy,  and the state provides subsidies for consumers who invest in clean energy.  In addition, China’s low labor costs and artificially undervalued currency are a big advantage in energy equipment manufacturing.  But China’s biggest advantage may be its soaring domestic demand for electricity as more of its citizens adopt a power hungry lifestyle.  This means that Chinese energy producers enjoy enormous efficiencies from large-scale production.

In response to complaints from the West about China’s unfair advantages, Ma Lingjuan, deputy managing director of China’s renewable energy association says “Every country wants low cost renewable energy.  Now China has reached that level, but it gets criticized by the rest of the world.”

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More US Jobs from Proposed Texas Wind Farm?

Posted on November 19, 2009. Filed under: News | Tags: , , , , , |

In a follow up to the recent controversy around the proposed Texas wind farm. The issue was that a Chinese company (A-Power Generation Service)would manufacture the turbines in China, creating thousands of clean jobs in that country. That in itself was not an issue, but what did prove to be controversial was the fact that stimulus funds would go to fund the project and the number of jobs created in the US was not nearly at the same level (300 for construction and only about 20 permanent).

Green Inc. reports that US Renewable Energy Group and A-Power announced on Tuesday that the plan had been revised to inlcude

“A new production and assembly plant in the United States that will supply highly advanced wind energy turbines to renewable energy projects throughout North and South America.”

This announcement came after Senator Schumer (D-NY) said he would oppose stimulus funding of the project if the wind turbines were produced in China.

Still, as the Green Inc. post points out, there are a lot of uncertainties about the details of the plan, the big one being whether this new proposed plant will be used to supply to the turbines for this specific project or if it will be a separate effort.

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Stimulus Funds Huge West Texas Wind Farm Joint-Venture with Chinese Company

Posted on November 2, 2009. Filed under: News | Tags: , , , , , , , , |

Last week, Green Inc announced a planned 600 MW wind farm to begin construction by 2010 in West Texas. The project is a joint venture involving A-Power Energy Generation Services, a Chinese wind turbine manufacturer; Renewable Energy Group,  a US Investment firm; and the Texas based Cielo Wind Power. With the support of US government stimulus incentives including cash grants and loan guarantees, Chinese banks will finance a large percentage of the $1.5 billion project.

The 240 wind turbines required for the farm will be made in Shenyang, China in the first example of Chinese exporting turbines to the United States. John Lin, CEO of A- Power Energy Generation Systems,

“This wind farm project came about thanks to the openness of the United States for investments in the field of renewable energy”

Interestingly, a follow up from Green Inc. yesterday showed that not everyone in the US is that open to Chinese involvement in this project. Many readers and observers were unhappy to see US stimulus money going to Chinese companies. Though, the project would create 300 construction jobs in the US, only 30 of these would be permanent. And, this pales in comparison to the 2,000 Chinese jobs created by the project.

“Why are U.S. stimulus funds being used to subsidize manufacturing jobs in China?”

Asked a reader that was perplexed by how US government officials could keep making statements about the threat of US losing its competitiveness in the clean energy field to Chinese companies, and at the time is making a huge stimulus investment that seems to benefit these same companies.

According to a recent study by the Investigative Reporting Project at American University School of Communication,

“84 percent of the $1.05 billion in clean-energy grants distributed by the government since Sept. 1 has gone to foreign renewable energy companies — specifically, wind companies”

Russ Choma, an author of the study explains that much of the investment for wind power has gone to European companies, because the American wind energy manufacturing base lags far behind that of Europe.

Several other factors account for the negative reaction to Chinese investment in the West Texas wind project. First, China’s is know for practicing “green protectionism” by enforcing local content provisions on clean technologies to boost domestic production. At a recent US-China summit, the China agreed to lift the restrictions on wind turbines.

Second, China is already dominating the solar industry and exports 95% of its products to the US and Europe, giving US producers a run for their money as they try to compete with the low Chinese solar panel prices.

Finally, China tends to make Americans (or at least a subset of them) nervous. In many industries, Chinese manufacturers are the toughest competitors. And don’t forget about that huge bilateral trade deficit. So the strong reaction to this latest announcement is no surprise.

And there are some difficult questions posed for even the biggest China fans. Should US stimulus money really be spent to create jobs in China? How will the US stay competitive in the future without making significant domestic  investments in new industries like wind turbine manufacturing? Still, US-China cooperation is key to crafting a global climate change treaty and plan, and though it may be a leap of faith, isn’t a joint venture like this a useful way to get the ball rolling?

Here’s a follow up post from Green Inc, with comments from US Renewable Energy Group’s, CEO Cappy McGarr (is that a great name or what?) He argues that the project’s positive impact on US jobs will be much larger than originally outlined.

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