Will China's Environmental Cleanup Catch Up With Its Economic Development?

By Anum Yoon

China’s green energy program is one of the largest, and most underreported, in the world. However, economic development is also a priority to the country’s government, and it’s often the case that growth comes at the expense of the environment. This leaves stakeholders asking: Can China’s environmental cleanup catch up with its economic development?

A green investment

Last year, China invested $90 billion in green energy programs. That was enough to put the country well ahead of the European Union and the United States.

Additionally, China has some of the world’s largest wind, solar and green-tech companies. At face value, it’s difficult to not see that the country has a commitment to an environmentally sound future.

The rest of the story

However, there are occasions when China is known to play not so nicely with Mother Nature. The country burns almost half the coal in the world. It’s also responsible for about 30 percent of the world’s annual greenhouse gas emissions.

It’s not just a scar on the planet that China’s leaving, either. Reportedly, emissions from coal plants in the country are responsible for 250,000 deaths each year.

This is not a problem lost on the Chinese government. The country’s leaders know that they can no longer afford to adopt a reactive plan for cleaning up the environmental mess that their growing economy is leaving behind. Instead, they need to adopt alternative energy sources.

“Environmental pollution is a blight on people’s quality of life and a trouble that weighs on their hearts,” said premier Li Keqiang this past March.

But what’s he going to do about it?

A top-down approach

China boasts the largest footprint of wind power of any place in the world. This is due in no small part to green energy companies like Goldwind, the world’s second-largest wind turbine manufacturer (first place goes to Vestas, in Denmark).

Just five years ago, China had no solar power. Now, the country is soon expected to surpass Germany in its solar-powered capacity. By 2020, China’s solar power capacity is expected to triple to 100 gigawatts. Many of the 10 largest solar manufacturers in the world today are Chinese companies.

Not all good news

Even though China has earned some bragging rights in its commitment to clean energy, the country’s efforts have encountered obstacles.

For example, although China has more wind capacity than the United States, its inefficient wind turbines generate less electricity. Why? Because the turbines were built for political reasons and not to maximize green energy usage.

As of this writing, some turbine developers are still experiencing maddening delays when it comes to connecting to the power grid. Further, even when they do get connected, the power that they generate often isn’t used.

Real estate development

Nowhere does China seem to show less of an interest in committing to a clean energy future than in its real estate development. Globally, buildings consume over a third of all electricity that is used worldwide. That number is closer to 50 percent if the energy used to construct the building (including electricity required to produce the raw materials used in construction) is factored in as well.

On top of that, buildings in China tend to be inefficient. This is in spite of the fact that an efficient building, such as modular buildings, can cost as much as four times less over its lifetime than a traditional building that requires coal-powered electricity for cooling, heat and light.

That’s a business decision that developers have made. They’d rather opt for the quick, cheap route and sell the property to pocket the proceeds. This effectively leaves the investor with a building that is a money pit and contributes to the overall environmental hazards that characterize Chinese real estate.

Now that the real estate market in China is slowing down, it’s likely that the government will place a stronger emphasis on the construction of green buildings. It’s thought that some companies have already started the ball rolling to this end, but because China lacks a transparent government and a free press, it’s hard to discern what is really happening.

That doesn’t change the fact that the green energy industry in China is happening: The country’s wind and solar companies are among the largest and, in some cases, most cost-effective in the world -- despite its real estate development woes.

China still has the potential to move forward toward an environmentally sound policy. It might just take some time before it’s fully realized. The top-down approach lacks government accountability, but that doesn’t mean that the country isn’t taking strides forward.

Whether or not those strides will outpace China’s economic development remains to be seen.

Editor's note: An earlier version of this post noted that buildings in China consume over 30 percent of all energy used worldwide. This statistic refers to all buildings worldwide, and the post has been updated to reflect this distinction. 

Image credits: Solar is Everywhere, Air Pollution in China & Apartments via photopin

Anum Yoon is a writer who is passionate about personal finance and sustainability. As a regular contributor to the Presidio Graduate School’s blog, she often looks for ways she can incorporate money management with environmental awareness. You can read her updates on Current on Currency.