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Analysis: China’s shifting renewables commitment

By Paul Mackintosh  
Dec 4, 2019

China, the world’s largest energy consumer, recently announced it will cut its renewable power subsidy by 30% to 5.67 billion RMB (US$800 million) in 2020. A draft regulation from the National Energy Administration calling for major power purchasers to take “fair returns” into account may or may not help renewables firms increase their revenues. It certainly doesn’t seem to have stilled the alarm that the Financial Times has identified around this shift in China’s renewables policy.

This is the country that Forbes magazine described in a January 2019 report as being set to become the world’s renewable energy superpower.

According to think tank ODI, China is the world’s largest coal-fired power plant operator, with coal accounting for 68% of electricity production, and the country “remains the single biggest provider of international public finance for coal”. The contrast with the position taken by European policymakers couldn’t be more glaring.

A report in July 2019 by the China University of Mining & Technology says China’s coal industry employs many workers and is “vital to the country’s economic development and social stability”. But slowing demand for coal has left the industry with huge overcapacity. An August 2019 IBIS World report puts the numbers employed in China’s coal industry at over 5.26 million and rising.

It looks like energy policy is yet another area where China’s Communist Party authorities are unwilling to risk the threat to their own power from dismantling the system they themselves have created. If the populist upsets of the past decade have reinforced anything, it’s the primacy of the political.

Cosy consensus and safe self-enrichment can only persist in an environment where people take the concept of the end of history seriously – but history is back with a vengeance. Free markets cannot survive without free politics. Nor can ecosystems, it seems.

As the months-long protests in Hong Kong and recent local district council election results in the city show, Communist autocracy is inimical to the survival of a free and open society – and, it would seem, to the environment as well. To paraphrase Deng Xiaoping, Communism crushes everything – people and planet alike.