China clings to clean-up amid woes

Thu Mar 5, 2009 By Emma Graham-Harrison

BEIJING (Reuters) - Grappling with slowing growth and a rising tide of unemployment, China is still pushing for cleaner development and may step up efforts to tackle climate change, the country's top economic planner said Thursday.

Experiments with a cap-and-trade emissions trading system for air pollutants, more spending on technology to tackle global warming and another round of shutdowns at outdated power plants and factories are all on the agenda for 2009.

The election of a new U.S. president with a strong position on global warming, and a looming deadline for a world deal on fighting climate change, have focused attention on China as the world's top emitter of greenhouse gasses.

But some experts have voiced fears that the global downturn will test the resolve of China and other leading emitters to fight global warming at a time when efforts to revive their economies dominate the policy agenda.

Beijing, in turn, is worried about its reliance on imported oil and gas, the health and economic consequences of its murky air and water and risks of protests and unrest from citizens threatened by pollution and now also unhappy about the economy.

"We will make every effort to save energy and reduce pollution," the National Development and Reform Commission said, laying out the "major tasks" for this year in a report to the annual session of China's rubber-stamp Parliament.

A long-standing drive to cut wasteful energy use remained a focus of attention with pledges to improve management of power demand, fine-tune pricing of oil products and block construction of new power-hungry projects.

More closely targeted measures include income tax rebates for purchase of energy efficient equipment and tax credits for the manufacture of small, environmentally friendly cars.

The effort to improve "energy intensity" was actually speeded up by the economic downturn, which helped China to achieve a self-imposed energy-saving target for the first time in 2008, by pushing dirty metal firms and factories over the edge.

"The growth of production in energy intensive and highly polluting industries slowed down significantly," the NDRC said.

CAP AND TRADE?

In a section on tackling pollution, the report pledged to "continue to experiment with the cap-and-trade emissions trading system." It gave no more details, but this likely referred only to pollutants such as acid-rain-causing sulfur dioxide.

However, officials have said in the past that a scheme for these gasses could lay the ground for a system tackling greenhouse pollutants such as carbon dioxide by putting monitoring equipment in place, building up a market and popularizing the concept of emissions trading.

The government also plans to set climate change programs for each province -- which could help give local leaders eager for promotion greater incentive to clean up firms in their area -- and will this year step up the hunt for clean technology.

"We will increase research and development on technologies for slowing down and responding to climate change," it said.

Beijing has called for rich nations to provide green technology to developing countries as part of a global pact to cut emissions of global warming gasses, due to be hammered out at talks in Copenhagen in December.

It is highly vulnerable to the effects of a warming planet, ranging from droughts in its already parched south to rising sea-levels along the heavily populated coast and storms in the typhoon-prone south.

Desulfurising equipment was added in power plants with another 100 gigawatts of capacity over 2008, meaning nearly two thirds of the nation's generators now strip out the gas, the report said, and more plants will be upgraded this year.

China offers higher tariffs to power plants that clean the gas from their emissions and said it will step up oversight of the scheme. In the past, companies have installed the equipment but kept it switched off to save money.

Dirty water was also a target, with plans to ensure over two-thirds of urban sewage is treated by the end of the year.