China: From growth to ‘quality of growth’

China houses 21% of the world’s people. Keep that ratio in mind. To provide its people with their current living standard, China has the following resources to call on: 7% of the world’s freshwater reserves, 11% of the world’s primary energy supply, 7% of the world’s arable land, 6% of the world’s roads and 2% of the world’s passenger cars. China also produces 14% of world’s carbon-dioxide emissions.

The only way to avoid the logic of this arithmetic is to achieve a rapid leap up the energy-efficiency curve. The official targets for improved energy efficiency, reaffirmed at the NPC, are highly ambitious. Highlighting the difficulties, the interim target for 2006 was missed by a large margin. The strong price signal that would encourage energy savings sits uneasily with the harmonious-society doctrine.
The “environmental Kuznets curve” is a well-known theoretical construct. This curve is an upside-down “U” shape in income per capita and energy per output unit space. Research shows that the Chinese experience accords with the basic tenets of the theory. It also shows that China is still some way from the perceived turning point of the parabola. In other words, it is on the left of the curve, at a level of development when energy use per unit of output is intensifying.

This “developmental gravity” highlights the difficulty of increasing energy efficiency at this moment. Indeed, China might rationally argue that it needs to pollute more now to pollute less in the future – or, more correctly, keep expanding income per capita rapidly to get to the emissions turning point faster.

To China’s credit, efforts are being made to clamp down on overtly polluting activities such as small-scale coal-based generation and ferrous-metals processing. Yet Beijing’s ability to conduct such matters centrally is questionable, with provincial officials seemingly mired deep in a “quantum growth” mindset.

Asia Times