Energy and Environmental Policy in China: Towards a Low-Carbon Economy.

• Author: Auffhammer, Maximilian

Energy and Environmental Policy in China: Towards a Low-Carbon Economy, by ZHONGXIANG ZHANG (Edward Elgar Publishing Limited, 2011) 175 pages, ISBN 978 1 84844 546 8, Hardcover, $110.

China has pulled 300 million people out of poverty in less than a decade. This feat has never before been achieved in human history. This astonishing economic growth was largely fueled by the burning of massive amounts of relatively dirty coal. As is almost universally true, China's firms and consumers do not pay for the full costs of their activities, which is nowhere more apparent than in the unprecedented deterioration of environmental quality in China. China is now the leading emitter of greenhouse gases and in fact emits more C[O.sub.2] from coal alone than does the United States from all fuels combined. Air quality in some Chinese cities has deteriorated so badly, that concentrations on bad days are higher than any ever recorded in the history of the United States. The World Bank has put the total cost of air and water pollution at about 5.8% of China's GDP. Significant policy interventions will be required in order to clean up China's air and slow the growth of its greenhouse gas emissions. China has set ambitious goals in terms of its Carbon Intensity--a 40-45% reduction by 2020. Further, 15% of its energy requirements are supposed to be met by renewable sources of energy. ZhongXiang Zhang's recent slender monograph provides is a collection of five edited lectures, which seek to shine light on the challenges and opportunities behind controlling the growth of energy consumption and emissions.

After a brief introduction laying out the overall challenges, chapter 2 tackles the issues arising from increasing decentralization of power from the federal to the provincial and local level. Professor Zhang correctly points out that local officials have to pursue multiple goals, and often prioritize economic growth over the enforcement of environmental regulation. The chapter describes tactics pursued by the central government to incentivize local governments and moves on to discuss which factors contribute to the severely limited success in terms of cooperation by local officials. It closes by discussing a number of concrete policies, which may fix some of the sources of the breakdown.

The third chapter outlines China's attempts to reduce energy consumption, emissions of pollutants and to increase the use of renewable sources of energy, nuclear power and...