Ideas for Combatting China’s Air Pollution
TREND 1 – URBAN RAIL EXPANSION
On December 30th, 2012, Beijing opened new 70 kilometers of metro lines,
surpassing London and becoming – at 442 kilometers – the city with the world’s
largest metro system. In 2012 again, three Chinese cities – Hangzhou, Suzhou
and Kunming opened their long-awaited metro lines, bringing the total of Chinese
cities with a metro to 18.
China’s urban railway will continue to undergo fast expansion in 2013. In China,
urban rail systems are widely regarded as a benchmark for a modern, livable city
– cities are craving metros to meet this “new normal”. The central government
issues strict criteria, only allowing large (population over three million) and
wealthy cities (GDP over 100 billion yuan, or $16 bn) to build metros, yet many
cities are set to meet these baseline criteria and more urban railways will be seen
in Chinese cities. In September 2012, the National Development and Reform
Commission (NDRC) approved subway and light rail lines in 23 cities. This was
the largest number of projects ever approved at one time by the NDRC, for a
total investment amount in excess of 800 billion yuan, or $128 billion. As of today,
over 30 cities have urban rail systems under construction. China plans to add
2,500 kilometers of metro lines during the current 5-year plan (2010-2015),
where the total length of metros in operation in 2010 in the country was only
1,471 km.
The ambitious metro expansion plan brings great challenges to finance. For
some cities, metro expansion will be at the expense of development of rest of
public transport system. For it is not only costly in construction but also in
operation. Currently, most cities maintain very low ticket rate due to the price
control of the central government, e.g. Beijing subsidized 3.69 billion yuan
(US$500 million dollars) on its metro operation in 2012 . And the local
governments which is in charge of urban transport development receive half their
funding from land sales and from borrowing money. As highlighted in a recent
McKinsey’s prediction, this is unsustainable and Chinese cities will start to go
bankrupt in 2013.
However, change may come soon. The State Council’s recently announced
policy to allow the capture of the increase in land value around public
transportation stations to finance transport development. This new policy may
open the doors to new urban rail finance for Chinese cities. They can find
inspiration in the Rail + Property Model in Hong Kong.
Ideas for Combatting China’s Air Pollution
TREND 2 – INVESTING IN RENEWABLE ENERGY
China has embarked on the greatest push for renewable energy the world has
ever seen. A key element involves more than doubling the number of wind
turbines in the next six years. Already the world's largest producer of wind power,
China plans further massive increases.
From a current installed capacity of 75 gigawatts (GW), the aim is to achieve a
staggering 200GW by 2020. By contrast, the European Union countries together
have just over 90GW of installed wind capacity.
The far western province of Xinjiang is one of seven areas designated for wind
development. Against a backdrop of snow-capped mountains, turbines are
massed in their thousands over the frozen desert. New units are being installed
in a frenzy of construction in which the pace of work has been accelerated.
Jiang Bo, an engineer with the manufacturer Goldwind, told me: "Seven years
ago we could only do one wind turbine in about two days - but our current speed
is that we can do two in one day."
However, integrating this surge in wind power has posed a series of challenges.
The windiest regions, such as Xinjiang, tend to be extremely distant from the
biggest cities where the electricity is most needed. And the construction of wind
farms has often outstripped the building of the connections needed to link the
turbines to the grid.
The grid itself, accustomed to handling the predictable output of power stations
burning coal, has struggled to cope with the intermittency of wind. The result has
been that some wind farms have been ordered to shut down even on windy days
- a process known as curtailment.
Last year as many as 20%-30% of turbines across China were left idle at
particular times but wind industry officials say the problem is now being tackled.
A more fundamental question is the likely contribution of wind power to China's
insatiable demand for energy. The most recent figures, for 2012, show that wind
only generated 2% of the country's electricity. Coal, the largest contributor,
generated 75%.
However, since China's total generation is more than that of all European Union
countries combined, wind's percentage is large in absolute terms.
Liming Qiao, China director of the Global Wind Energy Council (GWEC), said:
"Two per cent sounds small but it's not when you consider China's total electricity.
"In fact, last year wind surpassed nuclear to become number three after coal and
hydro, and it's got a lot more potential." The sheer scale of the wind market is
encouraging mass production which has lowered prices and fostered innovation.
Ideas for Combatting China’s Air Pollution
Until recently, Chinese wind manufacturers produced Western-designed turbines
under licence. Some acquired a reputation for turning out inferior products. Now,
the wind boom has led to a flurry of new designs. Goldwind, for example, offers a
turbine which does not need a gearbox but instead has a "direct drive" system
designed to be cheaper to maintain.
According to Paolo Frankl of the International Energy Agency, developments in
China will drive down prices globally. "As with any other things, what China does
has an impact on the whole world and China is contributing to the reduction in
the cost of wind in two ways: "One being the most important market in the world
with large deployments and, second, with a very robust and active manufacturing
capacity." Mr Frankl expects reduced prices to make Chinese turbines more
appealing to buyers abroad. "The export ratio of the Chinese producers will
increase and they'll find new markets in Asian countries, Latin America and
Africa," he said.
The Chinese government has set renewable energy as a strategic priority and
supports the push for wind through a system of subsidies. The crisis in air
pollution in many Chinese cities has added a further rationale for renewable
energy - beyond the aims of energy security and lower carbon emissions.
Still open is the question of whether wind's costs can ever be driven below those
of coal, China's energy backbone. Ma Jinru, a vice president of Goldwind, looks
forward to a time when fossil fuels will be scarcer and subject to carbon pricing.
"One day in the future when the resources become limited and the price gets
higher and pollution gets worse, then society will charge the social cost for that,
so in the long term the cost of wind energy can be cheaper than coal.
"And the cost of wind energy will drop through technical innovation, so the wind
energy sector will have a huge huge growth in the whole electricity supply." If
any country can industrialise wind power and make it pay, it's China.
And a glimpse of its future can be found beside the Silk Road in Xinjiang: along
this ancient trade route stand white metallic forests of turbines, some completed,
others waiting to be fitted with blades, and many more planned.
Ideas for Combatting China’s Air Pollution
TREND 3 – PRIVATE CAR BAN
As the world’s largest automobile market, China will continue to regress towards
ever more cars, while more cities might operate car restrictions in response to
congestion and air pollution. Recent forecasts show that 2013 car sales will be
up 8%, slower than the growth rate in recent years. Although China will continue
driving one third of the global growth in the automobile market, the trend is more
than likely to change with the increase of car restrictions in cities.
Last July, Guangzhou rolled out a vehicle license quota, modeled after Shanghai,
Beijing, and Guiyang. With Guangzhou, the three largest cities in China limit
vehicle purchases to stem the tide of private auto ownership.
This type of restriction is rarely found worldwide – with Singapore a notable
exception. These restriction policies may indicate a tipping point in sight for
China’s rate of motorization.
Meanwhile, many other cities have already limited vehicles driving on the roads
using travel restrictions based on vehicle license plate numbers. As of today
these restrictions are in place in 7 cities – Beijing, Changchun, Chengdu,
Guiyang, Hangzhou, Lanzhou, and Nanchang – where none existed in 2007.
Restricting automobiles at the early stages of motorization may lead to a different
pathway of urban development and mobility. Along with the continuous
improvement of public transit, Chinese cities might simply be able to “leap frog”
to a more sustainable urban paradigm.
Ideas for Combatting China’s Air Pollution
TREND 4 – BIKING RENAISSANCE
The past two decades have seen the decline of biking and pedestrian
infrastructure in many Chines cities, but in 2013 Chinese cities may regain the
momentum of moving people on bikes. In September 2012, the Ministry of
Housing and Urban-Rural Development released policy to promote biking and
pedestrian systems in cities. This announcement also launched a 45-percent
target to be reached in cities by 2015 for biking and walking.
The rapid scaling-up of bikeshare in China and a new “greenway” project in
Guangdong points to this as a real possibility. Over the past five years, bikeshare
systems have exploded in growth nationwide, fueled by the Hangzhou’s
successful system launched in 2008. Today, over 60 Chinese cities have public
bike sharing programs and China has more bikes shared than the rest of world
combined. Wuhan and Hangzhou are now running the world’s largest and
second largest bikesharing programs with 90,000 and 64,000 bikes respectively.
More cities are building or planning to introduce public bike programs.
With the bikeshare movement, some cities revised their surface space priorities
deferring to cyclists and pedestrians. The Guangdong province leads this trend.
Its cities – such as Guangzhou and Foshan – have constructed “greenways” –
biking and walking corridors paired with landscaping, alongside the development
of bikesharing programs. Guangzhou is now the role model for Chinese
pedestrian-cycling infrastructure, with over 1,000 kilometers of greenway
connecting key attractions and mass transit hubs.
Greenway construction has also spurred grassroots NGOs to promote urban
cycling, a rarity in China. BikeChina, one such cycling NGO has been promoting
Guangzhou cycling for two years, engaging with the public, international think
tanks, and government to make the city more bikable.