(Bloomberg) — China’s party congress in Beijing will likely take place under crisp, blue skies — a symbol of President Xi Jinping’s environmental stewardship that is being tested by darkening economic clouds and political strife around the world.
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More than any other leader of the Chinese Communist Party, Xi has sought to make the environment part of his lasting legacy. He’s dramatically cut the air pollution that plagued urban residents when he took over in 2012, overseen the development of a world-leading clean energy industry, and made perhaps the most important climate commitment in history in 2020 when he set a target for net-zero emissions within four decades.
Now, as Xi prepares to begin a landmark third term, his vision of green mountains and blue waters is threatened by a stagnant economy and an increasingly fraught global landscape for energy supply. Beijing’s blue skies around showcase events like the congress, or the Olympics earlier this year, are testament to the juggling act he faces. In order to reduce pollution the government has to sacrifice economic output, this week ordering nearby steel mills to slow production in what’s typically their peak season for demand.
“On the environmental issue, Xi really is a true believer,” said Kerry Brown, director of the Lau China Institute at King’s College London and author of several biographies of the Chinese leader. “The problem is, and Xi has recognized this, is the economic model that’s still so important is still predominantly driven by use of fossil fuels. It’s a practical restraint.”
State media accounts of Xi’s rise to power highlight a long-standing affinity for nature, stemming from a boyhood love of the country’s mountains and rivers. As a lower level official he at times pushed back against heavily polluting economic growth and supported projects to rehabilitate damaged landscapes.
In 2003, while Xi was party secretary of highly industrialized Zhejiang province, residents of a village there decided to shut limestone quarries and a cement factory that provided most of their income but polluted the land, air and water. Xi later told them their decision was wise, and coined a phrase that guides China’s environmental policy even now.
“Mountains and rivers green are mountains of silver and gold,” he said, according to a report last year in state-run Xinhua.
Air Pollution
His political career is entwined with an industrial revolution that has proceeded at an unprecedented pace, and at great environmental cost. Carbon dioxide emissions more than doubled between 2002 and 2012 as China surpassed the US to become the world’s worst polluter.
Xi was elected party leader in 2012, a stepping stone to becoming president a year later. That was a time when the country’s environmental problems were reaching a crescendo, said Jennifer Turner, China Environment Forum director at the Wilson Center, a Washington D.C.-based think tank. Air pollution was a particular problem, with pollution levels outdoors in Beijing similar to an airport smoking lounge. The problem incited rare public criticism — a concern for a government obsessed with social stability — and risked stifling economic activity.
“The Communist Party had been aware since the 1990s that pollution could be a major de-stabilizer, because it could undermine the economy,” Turner said. “Xi was being very pragmatic to deal with the problems.”
Shortly after Xi became party boss, he bemoaned the country’s environmental state during a tour of the country’s manufacturing hub of Guangdong.
“We owe too much debt in terms of ecology and the environment, and if we do not carry out the work now, the price will be even greater in the future,” he said, according to state media. “On this issue, we have no other choice.”
The government forced utilities to make power plants more efficient and restricted car use and coal burning in major cities. The amount of harmful particulates in the air fell 40% from 2013 to 2020, nearly as big a drop as the US saw in the 30 years following the passage of the Clean Air Act in 1970, according to the University of Chicago’s Energy Policy Institute.
Paris Agreement
China has also benefited economically and diplomatically from its environmental push. Its companies dominate the production of solar panels, large batteries and electric vehicles. Xi burnished his international standing in 2015 when he and US President Barack Obama hammered out a deal that formed the basis of the Paris Climate Agreement. Even after the US abandoned that accord under President Donald Trump, China doubled down on its commitment with a pledge to reach net-zero emissions by 2060.
“When Trump pulled the US out of the Paris agreement, Xi stepped forward and said, ‘Don’t worry, China is in the driver’s seat for international climate cooperation,’” Turner said.
China has turned to its credit markets to help fund its transition. Since 2015, the nation’s borrowers have raised more than $300 billion in what’s become the fastest-growing green debt market in the world, with funds going to projects like developing clean sources of power or constructing energy-efficient buildings.
Much more funding will be needed to meeting Xi’s ambitious carbon goals though — more than $18 trillion dollars, according to the nation’s top climate envoy, Xie Zhenhua. And even as authorities seek to introduce international standards to its green debt market, there are concerns about greenwashing and precisely how this cash is being used.
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Although China’s climate plans are ambitious compared to how slowly the US and Europe decarbonized following more prolonged industrial build-ups, they’re still likely to fall far short of what scientists say is needed to avoid the worst impacts of climate change. As storms, floods and heat waves wrack the planet with increasing frequency and intensity, China risks provoking the ire of affected nations.
“As the world’s largest emitter, China will have to deal with increasing pressure from stakeholders impacted by climate change,” said Christoph Nedopil, director of the Green Finance & Development Center at Fudan University in Shanghai.
Stimulus Projects
Xi’s climate agenda has faced a number of setbacks in the past year. A series of high-profile power shortages led to criticism that the country was trying to transition to clean energy too quickly. Making energy security a priority amid a spike in global fuel prices pushed coal production to all-time highs, even as scientists warn that burning the fuel must be rapidly reduced.
On top of that, economic growth has faltered this year due to a property crisis and frequent citywide lockdowns as China persists with its Covid Zero policy. The government’s answer has been to turn to stimulus spending, feeding concerns that the extra cash will prop up highly emitting industries like steel and cement, similar to what happened after the 2008 financial crisis.
That tension is visible in the skies above Beijing. As economic growth stalled this summer, pollution faded, offering rare, crystal-clear views of the mountains surrounding the capital. An air quality monitor at the US Embassy in the city recorded the lowest pollution levels in records dating back to 2008.
But as steel mills in neighboring Hebei province, home to about one-fifth of the nation’s capacity, ramped up output ahead of the start to the post-summer construction season, the haze returned. Officials have responded with the usual demands to slow output to put the party congress, which begins Oct. 16, in the best light possible. But that discipline is unlikely to last.
“Entrenched industry and investor interests in incumbent technologies and the tendency of decision-makers to fall back on old solutions of building large-scale infrastructure to stimulate the economy have a potentially negative impact on the climate push,” Nedopil said.
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