by Vikramaditya Jhunjhunwala
In light of President Trump’s uncertain stance on climate change, China has assumed the leading role in battling it. In an attempt to mobilize global initiative, China has publically implored its powerhouse compatriots, such as the United States, to acknowledge the science behind the phenomenon, and reduce their dependence on harmful fuels like coal and oil.
However, Keith Bradsher (2016), tells us of a troubling and rather ironic narrative of China mining and burning increased quantities of coal.
Even though there was a dip in production by 3 percent last year in a governmental effort to mitigate pollution and rising sea levels, Chinese coal is still the planet’s greatest source of carbon emission from human activities and the reopening of mines spells all kinds of environment-related troubles.
The writer recalls that the future did not always look this bleak: two years ago, China was in a position where it was possible to significantly cut emissions with electricity consumption plateauing enough to have mining operations limits be as low as 276 days a year. However, technical and financial circumstances, such as rising electricity blackouts and unfavorable financial market movements, have forced increased production of coal.
According to Bradsher, it was when mining enterprises started receiving substantial loans from banks that things began to go downhill as, with an increased number of mines, coal prices began to drop. It was at the same time that a dangerous trend in the Chinese financial markets began to take place – Chinese investors began flooding the commodity markets as they believed that coal prices had hit rock bottom. This turned out to be a self fulfilling prophecy as even minute rises in prices made speculators rush in and buy large amounts of coal leading, to massive price hikes. This along with rising power demands because of an abnormally hot summer, rising home mortgages and increasing railway requirements made Chinese coal prices double from those at the start of the 2016 year to those toward the end. As a consequence of rising demand the previous operating limit of 276 days was also extended to 330 days per year.
One can, however, take solace in the fact that China’s government is not taking the coal situation lightly and continues to uphold its environmental friendly ideals. Such is the magnitude of the situation that there are already murmurs of President Xi Jinping replacing Xu Shaoshi from his position as China’s National Development and Reform Commission’s director. Furthermore, China is also heavily investing in ambitious hydroelectric dam projects and wind turbine programs. So, while the situation with powerhouse nations in regards to climate change does not look too rosy, one does hope that China and the rest of the world will soon see better and greener days.
Bradsher K., 2016. Despite Climate Change Vow, China Pushes to Dig More Coal. The New York Times.