(Letter) China’s sustainable forestry, biomass industry, green development efforts

Recently there have been some discussion on China’s rapid development, industrialization, increased pollution and destruction of environment such as deforestation. Not being knowledgeable or ever being interested in the subject, I decided to look for answer to the question – Is China recklessly polluting the planet?

The answer seems to be no. China seems to be aware of its rising role in global emisson and pollution, scale of its impact, and has implemented emission reduction measures such as carbon trading in accordance to Kyoto Protocol (which it signed in 1997.) On the issue of deforestation, China seems to have, as with other countries, gone thru the same cycle of exploitation and subsequent rebalancing of environment, thru forestation, reforestation, managed forestry and other sustainable practices.

Following article is from SW Securities on China’s sustainable forestry and biomass investment, which also touched briefly on China’s history in green development. Not being an expert on the subject, I introduce this article for critical examination:

http://finance.sina.com.cn/stock/t/20090623/12502909640.shtml

SW Securities: Forestation, Reforestation, And Biomass Energy Investment Strategy For Second Half Of 2009

China Marketweb News

On 9/23 SW Securities published a report on forestation, reforestation, and biomass energy, for 2nd half of 2009. According to the report, low-carbon economy is promoting naturally lowered emission:

Among the nations, US and China have the largest trade difference, as well as highest carbon emission. The IEA projects China will become the largest CO2 emitter in the world in 2010. Accelerating trade difference will also increase cost of emission globally. Climate change will cause greater agricultural loss than industrial loss, as Peterson Institute for International Economics and Center for Global Development both place China’s emission reduction benefit at 7% of GDP. As effects of climate change moderates, China will become more interested in lowering emission.

Naturally reducing emission is key in future of lower carbon emission. Controlling green house gases by improving biological system is the preferred method for its sustainability and superior results. This mainly includes reducing deforestation, forestation, reforestation, composting and other agricultural practices.

Forests are key part of land-based ecosystems, mainly taking advantage of the sun’s energy. SWS found cost of lowering emission via forestation is less than industrial methods, with tremendous hidden potential.

Percentage of forest land in China was 8.6% in 1949, and currently at 18.21%. Old growth forest is about 12,456 million square meter, with managed growth forest at 13,618 million square meter, and 53 million hectare of man-made forest representing 53.2% of global increase in man-made forest. Cumulative CO2 absorption between 1980-2005 is about 4,680 million ton, and 43 million ton from controlling deforestation.

Clean development will promote greater forest industry in China, while obstacle is mainly rights to forest land, profits, and transfer of rights. Additional profit and subsidy derived from forest carbon sink credit, will bring social impetus to invest in forestation and bring valuation to forest and related resource industries. SWS recommends Yongan Foestry(6.69,0.16,2.45%), Jilin Forest Products(8.69,-0.19,-2.14%), Shengda Forestry(6.80,0.15,2.26%), Yueyang Paper(8.51,0.16,1.92%).

China’s future biomass development strategic areas are: 1) elevate use of solar efficient plant resources; 2) biomass resource; 3) development and use of micro organism; 4) development in sustainable biological resource; 5) genetics; 6) specialized used of biomass — organic material and technology.

While main focus of carbon trading is natural reduction of emission, bio-methane power generation and related field are being promoted, contributing to a new low-carbon economic model. China’s agricultural and biomass resources are plentiful, diverse, widely available. Live stock include hundreds million head of pigs, cows, goats, fowls. With large amount of live stock, the amount of waste is also large. In response to China’s rapid industrialization, there’s great potential for methane reclamation in composting, garbage collection, waste water treatment. Methane power generation is  an energy saving, environmentally friendly venture that reduces carbon emission and applicable under carbon trading. Main areas for methane reclamation are: landfills, waste water, live stock farming. SWS recommend observing methane power generation ventures from live stock companies such as Yiming Corp.(13.43,-0.14,-1.03%).

13 thoughts on “(Letter) China’s sustainable forestry, biomass industry, green development efforts

  1. China, as a developing country, can do so much. It has done its share so far. It is unfair to say China is the world polluter #1 or #2. You need to take out pollution due to production of goods for export. Then, you calculate pollution per capita. From this calculation, US is #1 and China is way, way down.

    * It is #1 or #2 in most renewable energy such as solar, hydro and wind energy.

    * China is blessed with coal, but lacks oil resource. Coal generates heat via burning the carbon and it can never be cleaned even with the best technology from the west/US.

    * The better quality of coal is in the north east. Transporting coal from this area to urban cities adds pollution.

    * Grid to distribute energy in China is primitive at best. It needs a lot of technology from the west/US plus its own development to exploit and copy/enhance the technology. Made In China on grid technology is idealistic but still has a long way to go.

    * Nuclear generation is very aggressive, but it is a small percentage of the total output of energy. All are foreign technology. China copied and developed the pebble nuclear technology which is promising for safety/cost but its capacity is very limited.

    * The priority to highways (auto) and some air transportation should take a back seat to public transportation such as subways, trains, HSR…

    * It has transformed a small scale of semi desert to livable land in the north west. The big impact will be from the diversion of water from south to north/west. This semi desert will turn to oasis easier than real desert.

  2. Thank you Tony. So I am not crazy to notice that when some people and organization in the West are criticizing China’s pollution by unfairly focusing on total emission and ommiting the fact China, a developing nation, has more people and deserve to pollute more, and if China doesn’t produce the goods the corrsponding emission will come from somewhere else.

    Heck Bush didn’t even sign Kyoto.

  3. Hi TonyP4: Just some comments on your comments. 🙂

    “It is unfair to say China is the world polluter #1 or #2. You need to take out pollution due to production of goods for export. Then, you calculate pollution per capita. From this calculation, US is #1 and China is way, way down.”

    Why unfair? In terms of gross pollution numbers, China is #1 (1,587,960,000) to the US’s #2 (1,312,080,000) ranking per the 2005 BC overshoot numbers. If you calculate pollution per capita, the US is #1 and China is much further down. Both numbers are significant, as are population numbers. Why would you separate out goods manufactured for export? Do you then add the BC from imported goods? Do you add the BC from the oil you import? The raw materials you import? You’re trying to take something complex and reduce it to a too simplistic formula that can’t be accurately quantified. If you create a population that can’t be ecologically sustained by available biocapacity resources, why do you get a free pass on it? By doing so, you’ve also condemned a large portion of your population to permanent poverty.

    If an item for export is made in China that produces a EF of 4x while that same item made in Germany would produce an EF of 1x, why would you assign them equal value? Are you saying that if a country doesn’t maintain pollution control standards and industrial efficiencies while producing at low cost and maintaining the profits generated by that production, they are not responsible for that inefficiency?

    * It is #1 or #2 in most renewable energy such as solar, hydro and wind energy.

    Agreed. Good work by China!

    * China is blessed with coal, but lacks oil resource. Coal generates heat via burning the carbon and it can never be cleaned even with the best technology from the west/US.

    Tony, this isn’t accurate. I sold to the two largest coal fired power plants in the United States (NW New Mexico) and was friends with one of their bag house engineers. A bag house is designed specifically to reduce pollution, especially SO2. It is one of many devices used in coal fired power plants to reduce pollutants. China could import that technology but has preferred to buy locally produced but less efficient products, and it has also been reported that many plants have not used the technology because they didn’t want to burn the energy to run them, which would lower profits.

    * The better quality of coal is in the north east. Transporting coal from this area to urban cities will cost more pollution.

    Modern transportation systems are low polluters. If the freight trains used for this transportation are highly efficient, the effect of pollution would be lower compared to the effect of burning sulfur rich coal. To be fair to China, this solution is already being implemented; it just takes time to finish.

    * Grid to distribute is primitive at best. It needs a lot of technology from the west/US plus its own development to exploit and copy/enhance the technology. Made In China on grid technology is idealistic but still has a long way to go.

    Agreed. It is all a part of modernization and China has plans to do so.

    * Nuclear generation is very aggressive, but it is a small percentage of total output of energy.

    Nuclear generation technology has a long incubation period but also a long payback period. China is doing its part to increase power through nuclear technology but it just takes time.

    * The priority to highways (auto) and some air transportation should take a back seat to public transportation such as subways, trains, HSR…

    Agreed. Unfortunately, auto technology was strongly encouraged over public transportation starting about ten years ago to build up the domestic auto industry and contribute to a growing economy. The thinking at the time was that someone buying a $5000 auto was helping the economy much more than someone buying a $50 bicycle. This kind of thinking was probably short sighted in retrospect.

    * It has transformed a small scale of semi desert to livable land in the north west. The big impact will be from the diversion of water from south to north/west. This semi desert will turn to oasis easier than real desert.

    Water diversion is by nature inefficient due to solar evaporation. A bigger problem was the loss of semi-arable farmland to desertification due to overgrazing. Forestation projects have tried to address this concern, similar to what happened in the US during the Great Depression when a massive drought forced many Midwestern farmers to flee their land. The government subsequently built tree breaks to lower topsoil loss. China’s northwest unfortunately has very rich but very light topsoil (loess) that is much more difficult to hold in place.

    The Tibetan glaciers that feed China’s great rivers are melting at an alarming rate. Regardless of why you feel this is happening, the effects will be devastating to China if that phenomena isn’t reversed. Some scientists attribute it mostly to families in China and India burning wood and coal for their daily living activities rather than strictly industrial pollution.

    China’s response to the technologies that Charles outlined has been very positive and timely. They realize the problem is huge and the solution must be aggressive.

    Because China is a rapidly developing nation, it cannot lower the BC overshoot but can only hope to slow down the growth. It has massive pollution problems because it recklessly increased its population decades ago and is now having to undertake drastic measures to combat the problem. I’m impressed with the its urgency in dealing with this issue, but saddened by the lack of effective enforcement of current pollution laws.

  4. Steve, here are my comments to your comments to my comments: 🙂 🙂

    * I still think pollution per capita is more important. I bet most folks including Charles will agree with me more than your total pollution. If it breaks down China into four countries about similar size as US, these 4 countries most likely will not be in top 10 polluter countries any more.

    It is over-simplified for sure as most posts are here. China’s main output is from industries that produce pollution. Microsoft produces more export than most companies but do not pollute much except Gates’ huge mansion.

    * From high school chemistry, C + O2 = CO2 which causes our pollution problem with too much CO2.

    China did buy some of the state-of-art clean coal burner according to a MIT report about a year ago. They have to protect their own industry so it is a double-blade sword.

    * The freight trains (even most are powered by diesel I guess) are not the most efficient, but the waterway is. Saw a lot of barges carrying coal on my cruise in Yangtze river. Hope they’ll be reduced with the Big Dam and better grid.

    A recent project transmits electricity generated by wind in Mongolia to urban area using transformer (or some gear like that) from a Mass. company.

    * The problem with nuclear is we do not know how expensive uranium will be when China’s massive nuclear generators are on line. I do have stock on these companies.

    * There are many issues in the South Water to North project. LA, CA is a semi desert and water comes from Colorado River. It is far easy as gravity forces the water down most of the way.

    We have less water from Tibet than before, most likely due to global warming. Tibet supplies about 40% of world population with fresh water. It is more important than on the surface.

    China should set up some special agencies that have full authority to enforce and eliminate problems like air pollution, water pollution, corruption…

  5. Hi Tony, here are my comments to your comments to my comments to your comments! 😛 😛

    * I still think pollution per capita is more important. I bet most folks besides Charles will agree with me more than your total pollution. It is over-simplified for sure as most posts are here. China’s main output is from industries that produce pollution. Microsoft produces more export than most companies but do not pollute much except Gates’ huge mansion.

    You and Charles say pollution per capita is more important than total pollution but you don’t say why. Jerry and I have both said why we feel the biocapacity overshoot is the more important number. I still don’t understand your reasoning. For instance, if a country chooses to build an aluminum plant to make product for export, they are choosing to create a high pollution industry. Why aren’t they responsible for that decision? I’m not talking about a popularity poll, I’m simply asking for a scientific reason that makes sense.

    Isn’t China’s goal to expand their economy so that their citizens can live a more affluent lifestyle? Won’t meeting that goal continue to move the pollution per capita numbers up? If China keeps the numbers low, won’t that mean hundreds of millions of its citizens can never lead an affluent lifestyle? Is that fair to those citizens? This sounds like a contradiction to me: China should not worry about pollution because the per capita numbers are low, but China’s goal is economic development that would make those numbers high and on top of that, the massive overpopulation numbers make that kind of economic development impossible, so economic growth will reach a limit based on resource limitations? However, all bets are off if bio degradation causes millions to die from pollution related diseases? Those aren’t great choices.

    For me, in the end China needs to get through its population bubble and then lower those numbers to a level where the entire nation can thrive. Before that happens, China will need to do the best it can to keep its EF as low as possible. From the actions the government is taking and has already taken, it would seem that they agree with my perspective because they’ve made it one of their top priorities. They also see these pollution mitigating industries as key for future economic growth. That’s what I’d call a win/win proposition.

    * From high school chemistry. C + O2 = CO2 which causes our pollution problem with too much CO2. China did buy some of the state-of-art clean coal burner according to an MIT report about a year ago. They have to protect their own industry so it is a double-blade sword.

    Tony, the key pollutant from coal fired power plants isn’t CO2, it’s SO2 or sulfur dioxide… nasty stuff. They can take the SO2 from copper smelters and turn it into sulfuric acid because the concentrations are so high but with coal plant SO2, the concentrations aren’t high enough for that process but very high in terms of SO2 pollution. The effects of sulfur dioxide produce “acid rain”.

    * The freight trains are not the most efficient, but the waterway is. Saw a lot of barges carrying coal on my cruise in Yangtze river. Hope they’ll be reduced with the Big Dam and better grid.

    Agree; good point. More efficient locomotives will help but canal barges are an excellent means of transportation.

    * The problem with nuclear is we do not know how expensive uranium will be when China’s massive nuclear generators are on line. I do have stock on these companies.

    Where does China get its uranium supply? Australia? Or is it domestic?

    * There are many issues in the South Water to North project. LA, CA is a semi desert and water comes from Colorado River. It is far easy as gravity forces the water down most of the way.

    True, but even there the effects of that usage are pretty dramatic. I’ve been to Mono Lake and it’s just a shell of its former size. They used to film the early Hollywood westerns in the desert landscaped San Fernando Valley until the irrigation canals were complete, then the housing developments started to be built, which was also the plot behind the movie Chinatown. LA and southern California don’t just get their water from the Colorado River but also from the east side of the Sierra Nevada mountains and even some from the Sacramento River delta.

  6. Steve, “You and Charles say pollution per capita is more important than total pollution but you don’t say why”

    I’ve said it – on the simple principle every human being are equal, and deserve to pollute the same amount. Should 3/4 of Chinese simply hold their breath so China’s total CO2 emission is less?

  7. @ Charles: Then answer me why every person doesn’t pollute the same amount as their neighbor? Why do rich Chinese, rich Americans, rich French, rich Spanish, rich Japanese, rich Mexicans, rich Russians and rich Thais pollute more than their fellow citizens? Why not just go after rich people? Yes, the “pollution per rich people” index.

    Your argument makes about as much sense as that one.

  8. Hey, you are pointing out the simple fact the world is not fair, which has nothing to do with my claim people SHOULD be equal.

    If we claim claim “we’re rich therefore we can pollute more”, why can’t they claim “there’re more of us therefore we can pollute more”?

    The simple fact is we Americans, 5% of the world’s population, is currently consuming 25% of the world’s resource:

    http://www.mindfully.org/Sustainability/Americans-Consume-24percent.htm

    Honestly, do you think it’s fair?

  9. I largely agree with Steve. I think China is trying to take the easy way out as far as the pollution issue is concerned. It is doing what it knows the best, namely manufacturing and building. It is investing massively into the green technologies when the true solution still lies with consume less and conserve more. Conservation in its most original sense is indeed very hard. It requires sacrifice from everyone. To put it bluntly, everyone has to be poorer, or there has to be far fewer people.

    Of course it is not fair for a Chinese relative to a high consuming American, but this has always been the case. For example Japanese probably is more hard working and more efficient than American, but even in its highest point in the late 80’s, Japanese people lived much poorer lives than their American counterpart. This is partly due to the abundant natural resources of US, and partly due to the fact that greenback is the reserve currency therefore US could almost finance their consumption seemingly endlessly, until recently when some of the bills come due.

  10. I don’t know if China’s green efforts are sustainable, but it has definitely slowed down its desertification rate dramatically since the 70s and 80s. You can read about this here (http://www.wilsoncenter.org/topics/docs/desertificationapril2.pdf)

    That said, the larger cities in China are still polluted mess. I also don’t believe China has any good recycling policies. With its population shooting up (China just did away with the 1 child policy, sort of) and country folks’ desire to move into big cities the issue will likely to get a lot worse before it gets better.

  11. US is easier to conserve than most other countries, like a fat guy tightening his belt. US has consumed too much of the world resources and polluted too much. For starter, they should not buy the gas guzzlers like SUVs long time ago. Their houses should not been that huge (mine is over 3,000 sq ft and I’m not even rich by any standard – shame on me) and houses should be closer.

    On the contrary, urban living conserves energy by providing efficient public transportation (if handled properly) and high rise apartment complexes. Bicycles for densely-populated urban are not efficient to conserve energy. It works in some less-populated and richer cities in Europe but not in SH, BJ and HK… I can tell you if allowed in busy streets, bicycles will cause a lot of traffic accidents in HK.

    China has the tendency to solve one question with full steam at one time. Pollution is taking a back seat to economy. corruption = rich wo power + powerful wo money. So, rich business wants the powerful local government to ignore pollution. It is another example of my funny formula.

    The one child policy reduces population and conserves world resources. Of course, there are side effects, but they’re outnumbered by the benefits. Compare the drawbacks/benefits to India and some S. American countries where having babies is a sport.

    The government can set up policies (like one child policy and pollution policy) and enforce them in addition to set up infrastructure like better public transportation. It is up to the citizens to do their share individually like buying a smaller car, using public transportation… When you’re rich, you drive a big fancy car, live in a big house, do not bag left over eating out… as money is no object to you. However, if you’re more environmental conscious, you may not do the above.

  12. I know that many here don’t read the NY Times because you all think it has slanted coverage, but I’d like to quote excerpts from this article in today’s paper:

    “Another reason for cautious optimism, the report said, is that China will be able to slow the growth of its emissions much faster than commonly assumed because of its rising investment in wind and nuclear energy and its newfound emphasis on energy efficiency.

    One of the report’s main findings was that China’s recent energy policies could achieve much bigger cuts than expected.

    China overtook the United States as the world’s top emitter of global warming gases in 2007 after more than a decade of rapid industrialization. But China is building more nuclear power plants and increasing the role of renewable energy, raising efficiency standards in new buildings, and gradually moving the economy from its manufacturing base to services, the agency said.

    If China manages to achieve the predicted savings, that nation will be “at the forefront of all global efforts to combat climate change,” Fatih Birol, the energy agency’s chief economist, said in an interview.

    Continued progress in China could increase the pressure on the United States, which has so far initiated no overall policy to reduce emissions, as well as on other industrialized nations.”

    Apparently the Chinese government, unlike some on this blog, feels that living within their biocapacity is an important goal to pursue and is making the effort to do so. Let’s give them credit where credit is due. It’s also a good example of what the United States SHOULD be doing in order to lower their own EF and live within their biocapacity.

    When I lived in China, only two things really bothered me. One was trusting the raw ingredients in the food supply because of a lack of FDA style purity standards. The other was the horrible pollution. I found those two areas to be far more troublesome to me on a daily basis than anything in the political arena, with the possible exception of the GFW which could be very annoying.

    Charles, this is where I believe you fail to take into account actual life in China. I take it you never lived in any of her large cities. To you, population is just another number on a computer graph but when you’re breathing that crap on a daily basis, it takes on a different meaning. That’s when overpopulation has a real and practical effect. China’s leaders live in one of the most polluted cities on earth so they also have to breathe this air, drink this water and see the effects of pollution. I give them a ton of credit for doing something about it.

    And it’s not just Beijing. China has the ten most polluted cities on the planet, and Chinese cities are HUGE! They have cities larger than Chicago that no one has every heard of. How is increasing pollution fair to the people in those cities? How does pollution “equality” improve their lives? You might want to ask them before you make assumptions on what they consider important. By making those assumptions, aren’t you doing exactly what you accuse “western nations” of doing, trying to decide for the Chinese what is important to them rather than letting them decide for themselves?

    @ wuming #9: I agree with everything you said but wanted to add one other item. Another reason the Japanese were poorer than Americans during their bubbling years was that their currency was deliberately devalued by the government in order to keep export demand high. When your currency is artificially low, it means individual citizens have less buying power and live poorer lives. What that did was have the Japanese people finance the better lifestyle of Americans with their own money, and they did this voluntarily in order for their businesses to sell more product. The same thing is happening today in China, where ordinary Chinese are actually financing American profligacy by maintaining a devalued currency. Now with the economy in a recession and Americans buying less, they are doing the same without even the benefits of increased business. That’s why you read so much about China trying to increase domestic spending.

  13. To Steve,

    nice article. So if the NYT is apparently so biased when it comes to criticism of China, I wonder how people will find her when she is more congratulatory towards CHina. Maybe NYT has nothing to do with it at all; maybe it’s criticism of China that represents bias, in and of itself.

    I think TOny had alluded to Chinese hybrid and electric cars in another thread. It’ll be interesting to see the technical capabilities of their products. With the uncertainty over how the Volt will be rated in terms of MPG or suitable equivalent, I’m also interested in how China will measure her products.

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