Stache - ...while weakening our economies at the same time. It's hasty and shortsighted policy.
At least China and India are actually investing in green technologies and don't have a leader who is trying to promote coal and actively rolling back regulations on cleaner cars, cleaner air and cleaner water.
Dramatic surge in China carbon emissions signals climate danger
30.05.2018 by Zach Boren and Harri Lammi
China’s carbon emissions growth has accelerated since the beginning of the year, leading to warnings that the country could be headed for its largest annual increase in climate pollution since 2011.
Led by increased demand for coal, oil and gas, China’s CO2 emissions for the first three months of 2018 were 4% higher than they were for the same period in 2017, according to an Unearthed analysis of new government figures.
Analysts have suggested the country’s carbon emissions could rise this year by 5% — the largest annual increase in seven years, back when the airpocalypse was at its peak.
This latest uptick in carbon emissions was unexpected. Many thought the government’s 2016 stimulus – which kicked off a construction surge fueled by coal-burning industries – was a temporary state of affairs, following years of falling coal use and carbon emissions.
But big spending on energy intensive industries persisted through 2017, meaning China has been backsliding on the climate progress it made earlier this decade and the rest of the world must redouble efforts simply to ensure global CO2 emissions don’t climb dramatically.
Debt stimulus driving industrial surge
As China’s emissions were leveling off and coal demand was falling fast, in 2013-15, coal, steel, power and other heavy industry companies started to struggle financially. These usually state-owned companies are saddled with overcapacity and excessive debt levels after they spent massive amounts of capital to stimulate the economy for the best part of the past decade.
Local governments, dependent on land sales for their revenue, and with local economies reliant on stimulus spending and smokestack industry jobs, were also ill-equipped for the transition. This financial distress made it clear that the economy was much less ready for the ambitious economic transformation than Beijing had assumed under the slogan of economic “New Normal”.
Furthermore, with president Xi focusing on consolidating his political position in the late 2017 party congress, there was no room for economic hiccups that could create internal discontent in the Party.
In response, the government unleashed a wave of stimulus that saw the reliance of the economy on government-directed spending and on inflated real estate sectors increase, in direct contrast to the aims of China’s economic transformation. In fact, the economy remains as dependent on real estate bubble and government-driven construction projects as ever, with 1/3 of this year’s GDP target expected to be delivered by a further increase in capital spending, above current very high levels.
CO2 emissions have followed the total volume of new debt closely with a time lag of about 12 months – after emissions started falling due to the global financial crisis in 2008, an unprecedented wave of credit started pushing emissions up even faster in early 2010. When that wave of stimulus started to run out in early 2013, it took a year for CO2 emissions to begin to fall. The next wave of stimulus started during the second half of 2015, and emissions started rebounding in early 2016. Now the amount of new credit (“Total Social Financing”, TSF) seems to have peaked in late 2017, but emissions are still on the upswing.