Economic development is the runaway priority
Presenting the International Energy Agency’s Outlook in November 2008, IEA Executive Director Nobuo Tanaka made very clear the central role Asian economic development would play in energy intensification and expansion over the coming two or three decades. Tanaka told an Australian conference that on a ‘business as usual’ projection “non-OECD countries will account for 87% of global energy demand growth between 2006 and 2030. He added that China’s energy demand would outpace all others. (Tanaka, 2008).
The Chinese Government understand the limitations of its current emphasis on unsustainable growth. In 2006 the Worldwatch Institute reported that “environmental degradation” was costing China nearly 9% of its annual gross domestic product” (Turner and Zhi, 2006 p153). In other words, as much as China grows economically, it is losing an equivalent value and capacity through diminished natural capital. There is evidence already of environmental degradation depleting resources, particularly croplands and freshwater, with flow on impacts to local economic resilience and in some cases giving rise to social unrest and cultural tension.
The Japanese Nomura Bank summarised China’s dilemma as its need for “sustaining fast investment growth” by demanding large consumption of Chinese product domestically or in exports. But the same report also concluded that China is uniquely big enough to create its own endogenous markets and, if it chooses, through policy innovation stimulate low-carbon investment so that it makes “a major contribution to maintaining rapid GDP growth” and enables the achievement of “ambitious” emissions abatement targets (Llewellyn and Santovetti, 2010).