My segment on the John Batchelor Show about Hong Kong’s millennials and the generational shift in stance that’s seeing young Hong Kongers becoming increasingly skeptical about mainland China. We discussed Beijing’s unseating of two pro-independence Hong Kong legislators, the mainland’s slow squeeze of Hong Kong’s democratic forces, and the increasing support for a more “localist” Hong Kong identity.
Asia Business Council Executive Director Mark Clifford spoke on the John Batchelor Show regarding the recent civil unrest in Hong Kong. Questions raised include: Who’s running Hong Kong? Does it have the high degree of autonomy it was promised in post-1997 arrangements or is Beijing calling the shots? What is the relationship with China?
Environmental issues – especially climate change – is about the only area of cooperation in the often fraught Sino-U.S. relationship. I recently moderated a discussion featuring leading thinkers on the issue: Barbara Finamore (Natural Resources Defense Council), Isabel Hilton (China Dialogue), Orville Schell (Asia Society), Deborah Seligsohn (University of California San Diego), and Clay Stranger (Rocky Mountain Institute).
Young China Watchers (YCW): Many provincial and local governments in China are facing pressure to maintain economic growth while tackling pollution. Are China’s broader economic goals compatible with its ambitions to transition into a low-carbon economy?
Mark Clifford (MC): Absolutely. I think the economics have become very clear that China can grow more rapidly if it shifts away from fossil fuels towards clean tech sources of energy such as hydropower, wind, and solar. These are cost-effective—not as cheap as coal, but that’s because the true costs of coal are not usually included. Outdoor air pollution, of which coal is a primary component, kills 1.6 million people every year in China. When we look at the health impacts and broader costs, it is clear that not only can China afford to go towards a greener energy path, it can no longer afford this heavy reliance on fossil fuels.
That’s the macro-picture. Although provincial and local-level officials have been told that environmental factors will become more important in their job and performance assessments, they tend to very focused on the short-term: immediate jobs, immediate economic growth, and putting up dirty industry whether it’s factories or a coal-fired power plant. It’s going to be interesting to see how this tension between Beijing and local governments plays out, especially concerning the more than 200 coal-fired power plants approved by local and provincial authorities that are yet to be built. It’s yet unknown whether Beijing can keep this building frenzy under control because it’s clear that China already has a looming excess supply of electricity generating capacity.
YCW: The Chinese government has invested heavily in developing one of the largest clean tech sectors in the world. Yet, you say that China’s “’top-down” approach has its limits. What needs to change?
MC: Every country’s energy policy is deeply embedded within its political and social structure. China has been lauded by many environmental campaigners for its ambitions to have one of the world’s largest cap-and-trade programs. And yet, the amount of bureaucratic discretion and lack of transparency suggests that it may have been more effective to go the tax route and let people make their own decisions.
Prices tend to drive people and companies’ behavior more effectively than regulations; for example, a carbon tax is more effective than a cap-and-trade system. Many resource prices in China are distorted: Electricity prices are far below global norms, which means it is used wastefully and—given coal-fired power plants still produce two-thirds of the country’s electricity—drives excess use of coal. If China could start disentangling itself from the policies and regulatory complexities and rely principally on prices, I think that’s the single most important thing that it could do.
This interview was originally published on the Young China Watchers’ blog. The rest of the interview can be accessed here.
Asia Business Council Executive Director Mark Clifford was awarded the Chris Welles Prize by the Columbia Graduate School of Journalism for describing the environmental cost of Asia’s growth in The Greening of Asia: The Business Case for Solving Asia’s Environmental Emergency.
NEW YORK (TheStreet) — China’s environmental disaster – its pollution – is also an opportunity for solar energy companies and those who want to invest in them, said Mark Clifford, the author of The Greening of Asia.
What’s happening in Asia in general and China in particular is not all that different from the heavy pollution in the U.S. 40 to 50 years ago. Now air and water in the U.S. are much cleaner because the government and citizens made it a priority.
Now it’s China’s turn, he said. More than one million people died in China prematurely last year because of the air pollution.
China is in a state of “environmental emergency” and its leaders know that, Clifford said. Last year alone, China spent $89 billion on clean technologies, nearly double what the U.S. spent in 2014.
These anti-pollution efforts are creating a plethora of jobs, Clifford explained. For instance, new buildings are going up that are more energy efficient. He said China has a long-term goal to have 20% of its energy generated from renewable resources — such as solar — by 2030.
That’s a great opportunity for businesses and an excellent opportunity for investors in Chinese solar stocks, although he acknowledged the industry trades with an incredibly high amount of volatility.
Originally published in TheStreet. Video interview can be accessed here.