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Asia Turns Greener

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Pacific Money

Asia Turns Greener

Asia’s economic giants appear to be getting serious about tackling emissions.

Asia Turns Greener
Credit: Shanghai solar via

South Korea could compete with Europe in carbon credits, while China, Japan and even India are curbing greenhouse gases. Suddenly, Asia’s major economies are looking a shade greener, despite justified skepticism over the region’s patchy environmental record.

On Monday, Beijing’s Municipal Environmental Protection Bureau took a step toward cleaning up the polluted Chinese capital by announcing plans to ban the use of coal by the end of 2020, putting priority on electricity and natural gas for heating instead.

According to China’s official Xinhua News Agency, the districts of Chaoyang, Dongcheng, Haidian, Fengtai, Shijingshan and Xicheng will cease using all coal products and shut down coal-fired power plants, adding to a previous move by the central government to prohibit new coal-fired power plants around Beijing, Guangzhou and Shanghai.

Certain biomass fuels, combustible waste and fuel oils will also be banned in the effort to reduce pollution, Xinhua said.

Coal represented a quarter of Beijing’s energy consumption in 2012 and 22 percent of the fine particles present in its air, with motor vehicles, industrial production, and dust also major contributors to pollution in the city of 21 million.

Currently the world’s largest emitter of greenhouse gases, less than 1 percent of China’s cities meet World Health Organization air quality standards, with smog seen contributing to around 1 million premature deaths each year. World Bank economists have estimated the cost of China’s pollution at $242 billion a year, while protests over “environmental incidents” have risen by 30 percent in the past year.

China is responsible for half the world’s coal consumption, and despite moves to curb its dependency is still expected to account for nearly 60 percent of new global demand for the “black gold” over the next five years, according to the International Energy Agency.

Analysts have also questioned whether Beijing’s latest move will have a major impact on the nation’s thirst for coal.

“China consumes roughly 4 billion [metric] tons of coal per year and, of that, Beijing accounts for just 15 million tons,” Wood Mackenzie China consulting manager Rohan Kendall told the Australian Financial Review.

“Most imported coal into China goes to the southern provinces, so there would be an impact if they followed Beijing, but we don’t think that’s likely.”

According to the Australian financial daily, six Chinese provinces have included coal consumption reduction targets in their environmental plans, resulting in a potential overall drop in consumption of around 350 million tons by 2017 and 655 million tons by 2020. China’s Coal Industry Association has also reportedly pushed for higher import tariffs and restrictions on high-sulphur coal imports to protect the money-losing domestic industry.

The move could aid the growth of cleaner gas-fired power in China, with the IEA projecting a “near-doubling” of Chinese demand through to 2019.

On June 24, Shinichi Kihara of Japan’s Ministry of Energy, Trade and Industry (METI) told the Australian Gas Export Outlook 2014 conference in Brisbane that the application of Japanese low-carbon technology to Chinese coal-fired plants could cut emissions by 0.8 billion tons, or around a quarter of total emissions.

Japan Stays Nuclear

In April, Japan announced its new energy strategy would target all energy sources, including nuclear and renewables. Amid rising energy costs, METI stated that nuclear power would continue as an important source of low emission base-load power, while working to speed renewable energy development including geothermal, solar and wind power.

Supported by a high feed-in-tariff (FIT), some 66 gigawatts (GW) of solar power, the equivalent of 66 nuclear reactors, had gained METI approval as of March 2014, although only 8.7 GW had been connected to the grid.

Yet while Japan’s solar push could see it potentially nearly double Germany’s 36 GW of installed capacity, critics have warned of reduced future investment due to FIT reductions and time limits on installations, according to Reuters.

The nation’s nuclear safety authority recently gave the all-clear for a Sendai plant to be switched back on, with another plant in Fukui Prefecture likely next to be restarted among the nation’s 48 shuttered reactors, despite public opposition.

On Tuesday, Environment Minister Nobuteru Ishihara announced plans for a “green” Tokyo Olympics, with the reported aim of showcasing greenhouse gas reductions as part of a new global 2020 framework replacing the Kyoto Protocol.

“It’s important for us to show the world just how far Japanese technology can go in responding to the environmental burden,” Ishihara was quoted saying by the Mainichi newspaper, proclaiming measures to promote electric cars and light rail, “converting the Tokyo area into a low-carbon zone”.

Japan’s greenhouse gas emissions climbed to their second-highest on record in the fiscal year ending March 2013, as imports of coal and gas surged in the wake of the shutdown of the nation’s nuclear power industry.

Nuclear’s revival and the nation’s renewables push should help reverse the trend, although the International Monetary Fund has called for action on the fiscal front, too.

In a July 31 report, the Washington-based lender called for “carefully designed taxes on energy” to ensure energy prices reflect environmental costs.

“According to our estimates, moving from existing to efficient fuel prices, at a global level, would reduce pollution-related deaths from fossil fuel combustion by 63 percent, mostly from reduced coal deaths, reduce energy-related carbon emissions by 23 percent, and raise revenues equal to 2.6 percent of GDP,” the IMF’s Vitor Gaspar, head of its Fiscal Affairs Department, said in a statement.

Emissions Trading

Tokyo was Asia’s first city to introduce emissions trading and reportedly should achieve a 25 percent cut on 2000 levels this year through energy efficiency measures.

China has established six pilot emissions trading schemes, with its national carbon market estimated at 1.1 billion tons of carbon dioxide, second only to the European Union, according to the World Bank.

Elsewhere, South Korea has pledged to introduce an emissions trading scheme (ETS) by 2015, and is reportedly on track to meet its goal of a 30 percent cut in emissions by 2020.

According to analysts, South Korea’s ETS could be the second-biggest carbon market in the world, with its carbon permits forecast to trade at $20 per ton, well above the $3 to $12 range seen in Europe and elsewhere.

India, the world’s fifth-largest carbon emitter, has also announced plans to curb emissions by countering deforestation and degradation under the U.N.-backed REDD+ scheme.

While far from a “green revolution,” further changes are likely from Asia’s biggest polluters as the region grapples with the consequences of its economic miracle.