Dec '09/Jan '10

Green growth opportunities in China

A new era in China means environmental expectations, says economist

By J. Borsato

Without question, China has emerged as a global leader in economic growth. Less certain are how the nation of 1.6 billion people will respond to the impact of its industrialization on the environment and how Canada, its long-time partner, will support that response.

Members of the Canadian business community got a preview of China’s environmental goals for the coming decade from a Chinese economist who is helping to shape that policy, and a glimpse of how Canada’s innovative industrial processes can play a role in China’s move towards environmental sustainability.

Professor Fan Gang, an economist and director of China’s National Economic Research Institute, addressed a packed house of Canadian business women and men in October to relate the challenges that country faces in moving towards environmental solutions essential to its future. The event was held in Toronto by the Canada China Business Council, a non-profit organization dedicated to promoting trade between the two countries.

Chief among their policy goals is energy security via diversification, explained Fan, who is also advisor to the country’s Ministry of Labour and Social Security. With over 30 per cent of its total energy consumption in the form of crude oil, China hopes to expand nuclear and bio-fuel development as a way to reduce its dependence on foreign oil. The reduction of local pollution was an emerging theme in China’s domestic political life. 

Focusing on carbon emissions and industrial impacts, Fan insisted these challenges are not confined to China but confront the global community as a whole.  He acknowledged that, as the world’s largest emitter of carbon dioxide, China is responsible for reducing emissions, but also pointed out that approximately 90 per cent of all existing emissions accumulated prior to the industrialization of China and India.  Nevertheless, Fan said that China’s goal was to reduce emissions by acting in favour of innovations which enhance existing industrial processes and create efficiencies in energy consumption. He noted that China’s emerging middle class was more aware than ever of the need for local changes to industrial emissions standards to protect and preserve the environment.

The widespread use of coal to meet China’s energy needs presented the largest challenge in developing the plan to reduce carbon emissions.  While ruling out a carbon tax in the short term, China’s strategy would emphasize increasing the capacity of nuclear energy to reduce coal use going forward. Fan acknowledged that some business leaders who view coal as vital not just to China’s energy demands, but also to its industrial infrastructure, are reluctant to take this course and confront the enormous cost of modernizing the country’s coal burning facilities.

Fan suggested that Canada could provide more than just raw materials to China’s future development, as it possesses the technology and skills needed to improve efficiency across the board within China’s economy. 

He also pointed to the role that other developing nations can play in affecting carbon emissions. With the help of initial investments in alternative energy, wealthy nations could help create a sustainable foundation for a green business approach, which otherwise would be too expensive for developing nations. As evidence of action in sustainable development, Fan highlighted projects such as public transit and rail line expansion that address not only efficiency but also the basic needs of a growing urban population. 

In a short time, China has emerged as a leader in industrial development. Fan said he hopes China will also become a leader in green energy and sustainable development — with Canada included in the process and the outcome — for the benefit of
the world.

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