The Future (61 page)

Yet even though the U.S. political system is still paralyzed at the federal level, governments of many other nations are beginning to adopt new policies in recognition of the dangers we face and the opportunities to be seized. In addition to the European Union, Switzerland, New Zealand, Japan, one Canadian province, and twenty U.S. states
will imminently begin cap and trade systems.
Most significantly, California began implementing its system in 2012.

Australia, the largest coal exporter in the world, has adopted a plan that includes both a CO
₂
tax and a cap and trade system that has been linked to the European Union’s system. South Korea is in the process of setting up its own system and fourteen other countries have announced formally that they are planning to launch cap and trade systems: Brazil, Chile, Colombia, Costa Rica, India, Indonesia, Jordan, Mexico, Morocco, South Africa, Thailand, Turkey, Ukraine, and Vietnam.

Wolfgang Sterk of the Wuppertal Institute in Germany says, “The carbon market is not dead.… If a national system emerges in China, depending on the design and scope,
it may become the biggest in the world, and allowances in that system would then give a global price signal.”

China is implementing a cap and trade system in five cities (Beijing, Tianjin, Shanghai, Chongqing, and Shenzhen) and two provinces (Guangdong and Hubei). These pilots are intended to be up and running in 2013 in order to provide a learning
experience that will be used to implement a nationwide cap and trade system by 2015.

As with some of the other commitments made by the Chinese government, some experts remain skeptical that they will follow through on this plan, but observers report that progress has already been made in most of the pilots that were designated. Together, the areas in the pilot program represent
almost 20 percent of the Chinese population and almost 30 percent of its economic output.

China’s commitment to sustainability and renewable energy has at
once helped and hurt the world’s ability to solve the climate crisis. By limiting imports while using subsidies to drive the cost of renewable energy technologies below the level at which Western companies can compete, China has served its own interest in dominating what everyone expects to be a key industry of the twenty-first century, but has damaged the rest of the world’s ability to reap the benefits of fair competition in quickly advancing the state of these technologies.

In 2011, the United States filed a formal complaint against
China for allegedly providing unfair subsidies to its wind and solar manufacturers. As of 2012, the U.S. imposed tariffs of approximately 30 percent on Chinese-imported solar panels, and the
European Union began its consideration of a similar complaint. Nevertheless, in spite of these problems, the low prices that resulted from China’s commitment and subsidies helped drive the scale of production to higher levels than anyone predicted, thus producing sharper cost reductions than anticipated.

China’s impressive commitment to move forward aggressively with the deployment of wind and solar has inspired many other nations around the world, but its continuing enormous investment in new coal-fired generating plants has caused it to
overtake the United States as the largest global warming polluter on the planet. Everyone realizes the importance to China of continuing its development of business and industry in order to continue reducing the levels of abject poverty in its country, but protests inside
China against dirty energy projects are growing in several regions.

In the last ten years, China’s energy consumption has
gone up more than 150 percent, surpassing that of the U.S. And, unlike the United States, China still gets approximately
70 percent of its energy from coal. Its coal consumption has increased 200 percent over the same decade,
to a level three times that of U.S. coal consumption. China is both the largest importer of coal in the world (followed by Japan, South Korea, and India) and the largest producer of coal, by far—producing half of the world’s coal,
two and a half times more than the U.S. (which is the second-largest producer of coal). Indeed, the amount by which China’s coal consumption
increased
from 2007 to 2012 amounts to additional demand that
is equivalent to all of the U.S. annual consumption. Beijing has proposed a cap on coal production and use to be implemented in 2015,
though many experts are skeptical about their ability to stay within the cap.

Even though its appetite for oil pales in comparison to its consumption
of coal, the amount of oil China used doubled during the 1990s, doubled again in the
first decade of this century, and is now second only to that of the United States. For the first time, in 2010,
Saudi Arabia’s oil exports to China exceeded those to the U.S. In 2012, China’s domestic oil reserves appeared to have peaked. And even though they are aggressively developing offshore oilfields, the Chinese already import half the oil they use, and the U.S. Energy Information Agency predicts that China
will import three quarters of its oil within the next two decades.

Security experts have noted that this trend has implications for Chinese foreign policy in areas like the disputed reserves in the South China Sea and its forward-leaning
engagement with oil-rich countries in the Middle East and Africa. Many observers found it ironic that after the United States invaded Iraq—at least in part to ensure the security of Persian Gulf oil supplies—the
Chinese became the largest investor in Iraq’s oilfields.

On a per capita basis,
energy consumption in China is only a fraction of that in the U.S. and other more developed countries, though its
per capita CO
₂
emissions are approaching those of Europe. Since the reforms of Deng Xiaoping were implemented more than thirty years ago, China has converted much of its economy from agriculture to industry and the transition has been even more energy-intensive because of subsidies to fossil fuels—which reduce energy efficiency in every country that uses them. In fact, electricity rates, petroleum product prices, and natural gas prices are all fixed by the government at below market levels, though there is active debate in Beijing about
letting all energy prices float further upward to global market levels. Overall, China is
lagging behind other leading global economies in crucial areas of energy efficiency.

In spite of its energy challenges and its massive CO
₂
emissions, China has implemented an extremely impressive set of policies to stimulate the production and use of renewable energy technologies. In its latest Five Year Plan, China announced that
it will invest almost $500 billion in clean energy. The
Chinese make use of “feed-in tariffs,” a complex
subsidy plan that worked extremely well in Germany. China also uses a full range of other policies, including tax subsidies and the imposition of
renewable energy percentage targets on utilities.

In addition to capping the use of coal, it has also established a number of hard
targets for the reduction of CO
₂
emissions per unit of economic
growth. A former vice minister of environmental protection, Pan Yue, said in 2005 that China’s economic “
miracle will end soon, because the environment can no longer keep pace.”

In the last decade, there has been tension between goals set by the national government and implementation strategies pursued by regional governments, which are typically intertwined with industrial energy users. As a measure of the national government’s seriousness in enforcing the CO
₂
reduction and energy intensity reduction targets, Beijing sent officials to these regions in 2011 to impose forced closings of
factories and even blackouts in order to ensure that the goals were met. More recently, the
central government has linked promotions of local and regional officials to their success in achieving these goals.

In the renewable energy sector, China has dominated global production of windmills and solar panels, as noted above, but has made less progress in the installation of solar panels than it has in installing windmills—partly because it
exports 95 percent of the solar panels it produces, many of them to the United States. In some recent years,
50 percent of all the windmills installed globally were in China, though almost a third of its windmills either are not connected to the electricity grid or are
connected to lines that cannot handle the electricity flow.

The central government is also directing an ambitious plan to build the most sophisticated and extensive “super grid” in the world in order to remedy this problem. Beijing has announced that it will spend $269 billion over the next few years on construction of 200,000 kilometers of high-voltage transmission lines, which one industry trade publication noted is “
almost the equivalent of rebuilding the United States’ 257,500-kilometer transmission network from scratch.”

As many countries have realized, high-capacity, high-efficiency electricity grids are essential in order to use intermittent sources of electricity like those produced by windmills and solar panels, and to transmit renewable electricity from the areas of highest potential production to the cities where it is used. As the percentage of electricity from the sources increases, the importance of smart grids and super grids will increase.

Plans are proceeding to link the high-sun areas of North Africa and
the Middle East to large electricity consumers in Europe. Similar plans are on the drawing boards in North America, where high-sun areas of the Southwestern U.S. and northern
Mexico can easily provide all of
the electricity needed in both countries. And in both
India and
Australia, plans are under way to link high-sun and -wind regions with high-electricity-consuming regions.

There is, in any case, a powerful need to upgrade the reliability, carrying capacity, and advanced features of the electricity distribution grid in rich and poor countries alike. In the U.S., for example, interruptions in electrical service and unplanned blackouts, combined with inefficiencies in distribution and transmission, impose an estimated annual cost of
more than $200 billion per year. In India, the largest blackout in history—by far—occurred in 2012 when more than 600 million people lost power due to
problems in managing electricity flows through the antiquated grid system.

In addition to the development of super grids and smart grids—which can empower end-users of electricity with tools to become far more efficient in their ability to reduce energy consumption and save money—there is a pressing need for more efficient ways to
store
energy. A great deal of investment has gone into the research and development of new batteries that can be distributed throughout the electrical grid and in homes and businesses in order to reduce the need for wasteful overcapacity in electrical generation that is needed during the peak hours of use. These batteries can also provide valuable electricity storage when used in electric cars that, like most cars, spend the vast
majority of their time in garages or parking spaces.

Toward that end, automakers around the world are launching fleets of electric vehicles in anticipation of a shift toward renewable electricity and away from expensive and risky petroleum supplies. At least some manufacturers in almost every industry are also converting to strategies that emphasize lower energy and material consumption. Energy efficiency expert Amory Lovins, of the Rocky Mountain Institute, has thoroughly documented the
impressive movement by many companies to take advantage of these opportunities.

In addition to solar and wind,
wave and tidal energy are both being explored—in Portugal, Scotland, and the United States, for example—and although the contribution from these sources is still minuscule, many believe
that they may have great potential in the future. Nevertheless, the Intergovernmental Panel on Climate Change, in a special report on renewable energy sources in 2011, said that wave and tidal power are “
unlikely to significantly contribute to global energy supply before 2020.”

Geothermal energy has made a
significant contribution in nations like Iceland,
New Zealand, and the
Philippines, where there is an abundance of easily exploitable geothermal energy. The vast potential for geothermal energy derived from much deeper geological regions has been unexpectedly difficult to develop, but here again, entrepreneurs in many countries are working hard to perfect this technology.

Although the potential for hydroelectric energy has been almost fully exploited in major areas of the world, there are undeveloped resources in Russia, Central Asia, and Africa that have great potential, though critics also warn about
serious ecological risks in particular locations.

The
use of biomass is expanding, and in some countries is beginning to play a significant role. In addition to traditional uses of manure and other forms of biomass for cooking, modern biomass techniques are being used to burn wood from renewable forests in far more efficient processes to produce heat and electricity. As with biofuels, the net impact of biomass use, when analyzed on a lifecycle basis, depends a great deal on the careful calculation of all of the energy inputs, the impact on land use and biodiversity, and the time periods required to recycle the carbon through the regrowth of the plants and trees.

There is also a global movement to produce methane and syngas from landfills containing large amounts of organic waste, and to produce biogas from large concentrations of animal waste gathered in animal feedlot operations. China, for example, has a major focus on biogas—requiring the installation of biogas digesters at all large cattle, pig, and chicken farms to derive the gas from animal waste,
though enforcement of this mandate has been lagging. The U.S., which has a voluntary program, and other countries should follow their lead.

There are two strategies for responding to global warming that are unlikely to work, even though each one has enthusiastic supporters. The first is carbon capture and sequestration (CCS). I have long supported research and development of CCS technologies, but have been skeptical that they will play more than a minor role. It is always possible that there will be an unexpected technological breakthrough that greatly reduces the cost of capturing CO
₂
emissions and either storing them safely underground or transforming them in some manner into building materials or
other forms that make them useful and safe. My friend Richard Branson has established a generous prize for the removal of CO
₂
from the atmosphere, and invited NASA scientist and global warming expert Jim Hansen and me to be judges in the competition.