Hello, and welcome to this latest edition of From a Climate Correspondent, a newsletter exploring the climate crisis around the globe.
Every week we share insights on the fight against climate change from our adoptive countries – and this week features a guest dispatch from China Dialogue's Tom Baxter in Beijing.
Thanks for reading and stay safe,
From a Climate Correspondent team - India, Jocelyn, Lou and Mat
As China's jump-starts its economy, will its recovery be green?
No.18 by Tom Baxter
The spring blossoms are out in Beijing and the sun is shining. Yet even while the rest of China begins to loosen its Covid-19 quarantine and travel restrictions, the capital city remains strictly managed: temperature checks can happen over eight times per day, even if you only leave the house once or twice. Anyone returning from outside of the city must go through 14 days of self quarantine, while foreigners are all but barred from entry.
I am lucky enough to live in an area where the housing committee is not being over zealous, but local administrators’ interpretation of the rules from up high is the order of the day. I’ve heard stories from friends of apartments having to re-quarantine for 14 days every time a flatmate comes back to the city and of housing committees who simply won’t allow people to move in.
Foreign Ministry spokesperson Hua Chunying promised via her first tweet back in February that a Spring would eventually arrive despite the long winter. Is this it? And if so, when will summer begin?
Last week Wuhan, the city at the outbreak's epicentre, significantly loosened its city-wide quarantine, with citizens who have been stuck inside for 76 harrowing days finally able to visit relatives, go back to their hometowns, or -- for those stuck outside the city -- return.
Yet it is expected that Beijing will not begin to relax regulations until after it has hosted the postponed annual plenary meeting of government, the Two Sessions -- no date for which has yet been announced.
Post-COVID 19 Stimulus
The media debate here, meanwhile, has moved onto the “what next” stage. Of prime importance to that question is the economy. Beijing has so far insisted that the annual GDP target of “around 6%” still stands - though some commentators are arguing that it should be lowered or deprioritised.
The central government has been promoting the idea in recent weeks that much of the proposed stimulus - as much as USD 394 billion in bonds for infrastructure, according to Reuters - will go towards so-called “new infrastructure”, including ultra high voltage transmission lines, electric vehicle charging points, and 5G.
The theory is that this approach would give the economy a nudge toward a more modern foundation, less focused on traditional heavy industry. But the definition of what infrastructure is to be included is proving not so clear.
As early as 11 March, influential economist and adviser to the People’s Bank of China, Ma Jun, warned in an opinion piece for Caixin:
“I strongly recommend that ‘new infrastructure’ does not include any high carbon, fossil fuel-based projects. If we push ahead with ‘new infrastructure’, it must involve clean energy and energy-saving technologies. This is the opportunity for us to accelerate the green transition of China’s energy structure.”
The world needs to hope that his warnings are taken onboard. China’s post financial crisis stimulus massively boosted heavy industry, coal consumption, air pollution and emissions from the world’s second largest economy.
The signs are not good, however. Ratings agency Fitch expects that the majority of infrastructure pushed as part of the recovery is likely to be traditional rather than new.
Recent analyses of new projects in China’s energy sector bear that out. According to Global Energy Monitor, between 1 and 18 March more coal fired power capacity was approved for construction than in all of 2019. A recent analysis of local governments’ “priority projects” for 2020 also revealed 17GW worth of new coal power plant proposals.
Overheated
All these rumblings of coal power expansion come just as the warning signs for coal’s profitability in China burn redder than ever before. A report by Carbon Tracker Initiative noted that 59% of China’s existing coal power capacity operates at an underlying loss, a stat which will only get worse if more capacity is added. Last year China saw a number of coal power plant bankruptcies as a result of low utilisation rates and years of loss making.
One respected researcher on the country’s power sector, Professor Yuan Jiahai of the North China Electric Power University said:
“Continuing to build coal power plants will inevitably further drag down power plant utilisation rates, which will lead the current situation of financial losses into an abyss of losses for the whole industry.”
In short, traditional infrastructure, such as coal power, as a means to repair the economy after Covid may be a way to meet the prized annual GDP target, but it is not good news for coal plant operators, workers, the future of China’s economy or, needless to say, global climate objectives.
Tom Baxter is a strategic comms and research officer with China Dialogue, based in Beijing
Must reads from the region
Stimulating the economy sustainably after coronavirus, Yao Zhe & Wu Yixiu, China Dialogue
Two of my colleagues at China Dialogue (disclaimer, my employer) write about the urgent need for China’s economic recovery package to push sustainability rather than big infrastructure and the heavy industry sectors.
Half of Coal Power Generation Doesn’t Make Money, Report Says, Matthew Walsh, Caixin Global
A look at the underlying economics of coal power in China.
Coronavirus: fears mount that China’s transition to a greener economy may be shelved amid recovery, Harry Pearl, South China Morning Post
Will the focus on economic recovery lead to a retreat on environmental regulations?
World watches China conservation battle as rare green peacock wins first round, Laura Zhou, South China Morning Post
In what was to be the year of biodiversity for China, a group of Chinese NGOs have won the first stage of their legal battle against a USD 500,000 dam in southwest China which threatens a key habitat for one of China’s most endangered animals, the green peacock. The court in Kunming, Yunnan, ordered an immediate halt to the dam’s construction until further environmental impact assessments have been conducted.
What else I've been reading
Reporters’ Notebook: Our 76 Days Locked Down in Wuhan, Gao Yu, Xiao Hui, Ding Gang & Bao Zhiming, Caixin
A group of four reporters from Caixin, a Chinese media outlet renowned for its fearless reporting, ended up stuck in Wuhan after the lock down came into force suddenly on 23 January. Last week, after 76 days, they were able to return to Beijing. Here’s their story.
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Who we are
Lou Del Bello is an energy and climate journalist based in Delhi, India.
Jocelyn Timperley is a freelance climate journalist based in San José, Costa Rica.
India Bourke is an environment journalist based in Hong Kong.
Mat Hope is investigative journalist based in Nairobi, Kenya.