A solar power site in Shanghai. Photo: iStock
A solar power site in Shanghai. Photo: iStock

China has shown that environmental protection and economic growth are not conflicting goals, contrary to what US President Donald Trump stated when he withdrew his country from the Paris Agreement on climate change. By investing in green energy development, China has proven that combating pollution can, in fact, accelerate innovation, create new industries and spur economic growth.

Accelerate innovation

China began developing green energy in the 2000s when the government realized that dependence on fossil fuels such as oil and coal could not sustain long-term economic growth. The toxic chemicals, gases and fumes released into the environment – land, air and water – were killing hundreds of thousands of people and costing between 2% and 5% of GDP annually. The huge costs prompted the government to spend massive sums annually (i.e., averaging over US$50 billion each year between 2012 and 2014, and US$88 billion in 2016) on green energy-related research and development. The effort paid great dividends, making China a leader in green energy technology. The country is the biggest and most efficient producer of windmills, solar panels, nuclear power plants, hydroelectric dams, electric cars, etc.

To meet its goal under the Paris Agreement, China plans to spend another US$360 billion on green energy development by 2020.

As Trump is fulfilling his promise to increase coal and oil production, China will focus on developing or finding less polluting forms of energy.  The latest breakthrough is gas hydrates or “flammable ice.” Gas hydrates, which are found at the bottom of oceans and in polar regions, may hold more carbon than all the other fossil fuels in the world combined, according to the US Geological Survey.

Should this be realized, the world will have an unlimited source of natural gas. China is not stopping there; it is spending heavily on producing electric buses and cars with the intention of creating an entirely green public transportation system. The country is well on its way to developing the technology and capacity to manufacture the huge quantities of batteries that are required to meet its green energy target.

Of course, fossil fuels will remain the biggest source of energy – over 70% – in China for years to come. But to curb their environmental impact, the government is planning a multi-pronged approach: reducing fuel consumption, finding ways to make coal energy cleaner, and building better and safer oil and gas transportation modes, particularly pipelines.

Beijing’s drive to improve the environment has put China at the forefront of green energy innovation and highlights the fact that pollution reduction and economic growth are not conflicting goals

In short, Beijing’s drive to improve the environment has put China at the forefront of green energy innovation and highlights the fact that pollution reduction and economic growth are not conflicting goals.

Employment creation

The focus on reducing fossil fuel consumption and finding new sources of green or renewable energy has paved the way for the emergence of new industries and the creation of new jobs. While it is true that many workers have been displaced by coal production cuts, many more jobs have been created in research and development activities and the production of green energy equipment. Shipping the equipment to markets requires additional investment in infrastructure construction and a comprehensive supply chain. These economic activities will, in turn, produce multiplier effects: equipment installation and maintenance, and tertiary industries such as marketing, finance, hospitality and insurance.

For example, the windmill farms in Xinjiang, Qinghai, and Tibet are instrumental in making them energy self-sufficient, which in turn has attracted other infrastructure construction projects (high-speed railways, airports, container terminals and highways) and industries (agriculture, mining, shipping, tourism and manufacturing). The new economic activities have created countless small family businesses, creating millions of jobs. Indeed, they record one of the country’s highest annual economic growth rates, estimated at over 10% year-on-year over the last five years. Average disposable income has increased many times since the 1980s, from less than US$100 in 1980 to over US$900 per year.

According to China’s Economic Reform and Development Commission, the country’s economic planning agency, the planned US$360 billion budget for green energy will create 13 million jobs nationwide by 2020.

In addition, China is committing US$2 billion to small, poor nations to help them address climate change. This would likely create economic and employment opportunities in both the receiving and donating countries.

Greenhouse gas emission reduction

The huge amount of capital and effort devoted to green energy development has paid off: greenhouse gas emission reduction was, respectively, 21.6% and 6.6% in 2010-2015 and 2016. These achievements leave only a reduction of 18.6% by 2020 under China’s commitment to the Paris Agreement.

The Chinese commitment to climate change is real and should be commended and emulated. Leading by example is far more effective than talking about it, particularly when those speaking have no intention of following through.

While China is disappointed that Trump pulled his country out of the Paris Agreement that former president Barack Obama expended so much political capital and other resources to achieve, it will continue to address the climate change issue. And the fact that large US states such as California and the other 190 signatory countries remain committed to fighting climate change can be seen as – no pun intended –  “a breath of fresh air.”

Climate change is real, not a “Chinese hoax”

The faster than expected melting of the polar icecaps, increasing numbers of natural disasters (i.e. typhoons) and small island nations being threatened by rising sea levels are real problems, not a “Chinese hoax” used to destroy US jobs and/or “bleed” US taxpayers, as Trump has claimed. The consensus in the global scientific community is that unless climate change is reversed, many cities in China (Shanghai) and the US (New York) will go the way of Atlantis.

Further, under the Paris Agreement, a country’s commitment to reducing emissions is voluntary, allowing it to pull out anytime if its economy is threatened.

Withdrawing from the Paris Agrement may even “Make America Worse” because it jeopardizes green energy development in the US, potentially sacrificing 100,000 green jobs to save 50,000 coal-mining jobs.

Trump should reconsider his decision to pull the US out of the  Paris Agreement. Being the world’s second-largest polluter, the US has a moral obligation to reduce its contribution to climate change. Joining the world in its efforts to reduce climate change will sustain, and may even enhance, US leadership, economic growth, and innovation, which will “Make America Great Again.”

Ken Moak

Ken Moak taught economic theory, public policy and globalization at university level for 33 years. He co-authored a book titled China's Economic Rise and Its Global Impact in 2015. His second book, Developed Nations and the Economic Impact of Globalization, was published by Palgrave McMillan Springer.