China and India grapple with fossil fuel emissions

298

China and India are burning record amounts of fossil fuels this year, even as they also install record renewable power generation capacity, highlighting the slow pace and enormous inertia to be overcome in the energy transition.

Both countries are experiencing rapid growth in energy use for services such as air conditioning, heating, cooking, lighting, power and transport as they try to raise living standards closer to those in the advanced economies.

Growing demand for energy services is so vast fossil fuels and renewable energy sources are acting as complements rather than substitutes, ensuring consumption from both is increasing simultaneously.

In effect, both countries are pursuing an “all of the above” approach to economic development and energy security, similar to the one advocated by then-U.S. President Barack Obama in his state-of-the-union address in 2014.

GROWING ENERGY DEMAND

In every historical case, the transition from a pre-modern agricultural economy to a modern urban and industrial one has been accompanied by a huge increase in the consumption of energy.

Increased consumption provides more labour saving, higher wages, more comfort, more entertainment and more opportunity for travel to visit family and see the world.

If they follow the usual pattern, both China and India are likely to consume a lot more energy services in the next few decades as their populations aspire to reach the same living standards as North America and Europe.

In 2022, the populations of China (1.43 billion) and India (1.42 billion) were each similar to the total for countries in the Organisation for Economic Cooperation and Development (OECD) (1.38 billion).

But total primary energy consumption in China (159 exajoules) and India (36 exajoules) was far lower than in the OECD (234 exajoules).²

Each person in China consumed only 66% of the energy as their counterparts in the OECD and in India the figure was just 15%.³

Even that overstates the consumption of energy services locally since both countries and especially China export a high proportion of their energy-intensive manufactured output to the OECD.

Continued modernisation means both countries will use a lot more energy – making an “all of the above” strategy imperative for policymakers.

THE NEED FOR ALL SOURCES

In the OECD, total energy consumption has been essentially flat since 2007, so growing production from renewables and especially gas has displaced coal and to a lesser extent oil.

Renewables (and gas) have been substitutes for fossil fuels such as coal and oil enabling a significant reduction in greenhouse emissions.

But total energy consumption has continued to grow rapidly in China (by an average of 3.1% per year in the last decade) and India (3.8% per year).

Renewables (and gas) have served as complements to other fossil fuels – ensuring energy remains affordable and reliable even as consumption increases significantly.

China and India’s current trajectory for energy consumption looks a lot like the United States or Western Europe between the 1950s and 1970s, a period of rapid growth in economic output, living standards and energy use.

In the Euro-Atlantic economies, rapid growth in total energy demand created a need for more energy from all sources; consumption from older sources continued to rise in absolute terms even as its share was reduced relatively.

U.S. coal consumption continued to increase in absolute terms until around 2010 even though it was losing relative share of the energy mix to oil from around 1910 and gas from 1980.

China and India appear to be moving along the same trajectory, increasing their use of indigenous coal even as they import more oil and gas, use more nuclear power, and invest in renewable generation from wind, solar and hydro.

EMISSIONS PEAK BUT NOT SOON

Eventually, China and India’s energy consumption will start to grow more slowly, at which point renewables will substitute for fossil fuels rather than just complement them.

But given their current position in the historical development process, that point is likely to be some years in the future for China and possibly decades in India.

Since 2018, China’s solar generation capacity has increased at 26% per year, wind generation capacity by 18% per year, while thermal capacity has grown by just 4% per year.

India’s solar generation capacity has grown by 25% per year, wind has grown by 5% per year, while coal has risen by just 1% a year.

Even so, in 2022, fossil fuels accounted for 82% of primary energy consumption in China and 88% in India, including 70% of total electricity generation in China and 77% in India.

Behind both China and India in the development process, sub-Saharan Africa’s population had increased to 1.20 billion in 2022 and is forecast to rise to 2.17 billion by 2050 and 3.57 billion by 2100.

The region’s urbanisation, industrialisation and energy consumption per person is even lower than China and India with commensurately greater potential to increase in future.

Policymakers from OECD countries use the U.N. conference process and other diplomatic forums to press China and India to speed up their transition from fossil fuels to zero-emission alternatives.

But such advice can sound at best impractical and at worst an effort to force them to accept structurally lower living standards.

In practice, governments in China and India have prioritised increasing access to energy services and ensuring energy remains affordable and reliable.

In that, too, they are following the historical and current example of the OECD nations.

Source: Reuters ( )