MAC: Mines and Communities

China update

Published by MAC on 2007-05-04

China update

4th May 2007

So, what is to be? According to Reuters a draft UN report shows that China and other "developing" states are curbing their share of rising greenhouse gas emissions beyond the point required under the Kyoto Protocol.

Yet, the day before, Reuters recorded without demur allegations that the Chinese regime has "gone on the offensive in global warming politics, opposing emissions caps likely to shape contentious negotiations about solutions."

And, the day aftewards, the same US news agency recalled China's March 2007 undertaking that 10% of the country's total electricity demand would, by 2010, be met using "renewable energy...even as it continues to rely on coal for most of its energy needs. "

If that target is achieved it will exactly match the proportion of "clean energy"envisaged in the latest US proposal. (See our US update this week.)

Poor Nations Brake Greenhouse Gas Rise - UN Draft

PlanetArk NORWAY

3rd May 2007

OSLO - Developing nations that are fast industrialising, such as China and India, have braked their rising greenhouse gas emissions by more than the total cuts demanded of rich nations by the UN's Kyoto Protocol.

A draft UN report, to be released in Bangkok on Friday after talks between governments and scientists, also shows that policies meant to curb air pollution from factories or cars or to save energy, have had a side-effect of fighting global warming.

"Efforts undertaken by developing countries (i.e. Brazil, China, India and Mexico) for reasons other than climate change have reduced their emissions growth over the past 3 decades by approximately 500 million tonnes of carbon dioxide a year," according to a technical summary seen by Reuters.

It said that was "more than the reductions required from (developed nations) by the Kyoto Protocol." By contrast, France's annual emissions in 2004 were 563 million tonnes, Australia's 534 million and Spain's 428 million.

The data may spur debate about what is a fair share-out of curbs on emissions in any deal to extend and widen Kyoto, which now binds 35 industrial nations to cut emissions by 5 percent below 1990 levels by 2008-12.

President George W. Bush pulled the United States out of Kyoto in 2001, arguing it would cost US jobs and that it wrongly excluded 2012 goals for poorer nations such as China.

"China is already doing a lot," said Hu Tao, of China's State Environmental Protection Administration.


He said China's one-child per couple policy introduced in the early 1980s, for instance, had a side-effect of braking global warming by limiting the population to 1.3 billion against a projected 1.6 billion without the policy.

"This has reduced greenhouse gas emissions," he told a conference in Oslo last month. China is the number two emitter of greenhouse gases, mainly from burning fossil fuels, behind the United States and ahead of Russia.

Developing nations argue that they should get credit for policies that have helped slow rising emissions. They note that east European nations in Kyoto get credit for the collapse of Soviet-era smokestack industries -- unrelated to deliberate efforts to fight global warming.

Russia, for instance, has apparently done most among Kyoto nations with a 32 percent fall in emissions between 1990, a year before the Soviet Union fell apart, and 2004.

And overall, the world's use of energy has become more efficient for the past century. The amount of energy used per dollar of economic output has fallen at about 0.3 percent a year, according to UN data.

"The carbon intensity of production has been falling, especially in the developed countries. It partly reflects a movement from manufacturing to services," said Sudhir Junankar of the economics and environmental forecasting think-tank Cambridge Econometrics.

And it is hard to say which Kyoto nations have done most, with deliberate policies, to cut emissions since 1990.

"Within Europe you could look at Sweden, Germany and the UK at the top end," said Jennifer Morgan, of the London-based E3G think-tank. Germany has also benefited from the collapse of East German industry and Britain from a shift from polluting coal.

Story by Alister Doyle, Environment Correspondent


China Climate Offensive Has Eye on Growth

PlanetArk CHINA

2nd May 2007

BEIJING - China, soon to be the world's biggest greenhouse gas polluter, has gone on the offensive in global warming politics, opposing emissions caps likely to shape contentious negotiations about solutions.

China objects to much in the draft of the latest UN report on global warming driven by greenhouse gases being discussed by scientists and officials in Bangkok this week, aiming to protect long-term growth plans from pressure to cut emissions.

"China doesn't want to be corralled into commitments that minimise its freedom of action and questioning the science, and digging in is part of that," said Paul Harris, an expert on climate change politics at Lingnan University in Hong Kong.

China plans fast industrialisation for decades to come and its output of carbon dioxide, the main greenhouse gas pollutant, could outstrip that of the United States as early as this year, the International Energy Agency says.

So, under an international glare of attention ahead of talks about greenhouse gas rules after the Kyoto Protocol expires in 2012, Beijing has gone on the offensive.

"It wants to put off into the future the serious discussion of accepting mandatory limits," Harris said.


China's government does not doubt global warming as such. A recent official assessment said intensified droughts and floods, unpredictable weather and rising sea levels could threaten long-term development.

But, it said: "With uncertainties about climate change, there should not be premature or over-zealous setting of overall global carbon emissions caps."

The Global Times, a newspaper run by the ruling Communist Party, accused Western politicians last week of using "climate terrorism" to undermine China's quest for prosperity.

"All of a sudden, it's not so much China as the victim of climate change, but about how much responsibility China should bear," said Yang Ailun of Greenpeace Chinashe. "They're worried about being boxed in."

China had challenged UN climate panel draft reports at earlier meetings.

In Brussels last month, China vehemently objected to wording about the likelihood climate change was affecting natural systems and succeeded in getting parts of the report cut or softened.

"I guess they're concerned that if they subscribe to a certain scientific proposition, that will have implications for their post-Kyoto negotiating position," said Michael Oppenheimer of Princeton University, who attended the Brussels meeting.

Lin Erda of the Chinese Academy of Agricultural Sciences, a member of the UN climate panel, said China was more confident it could adapt to hotter temperatures and calls for drastic action were not justified by science.

"If we say climate change will be too far gone by tomorrow and it's all negative, then we have to act today," he said. "If we say it will happen after 100 days, then we still have 50 days for development."


Even a 4 degree C rise above average temperatures of past decades did not necessarily spell the calamity some experts predicted, Lin said. "There may be more negative impacts, but we can't conclude that all would be lost."

China's climate change assessment suggests seeking to cut the greenhouse gases it emits for each dollar of economic activity nearly in half by 2020. But it foresees emissions rising in absolute terms until 2050 at least.

China had reason to demand that wealthy countries with much higher per capita emissions lead the way and do more to share energy-saving technology, said Stephen Schneider of Stanford University, who has been part of the UN climate panel work.

China's objections could be a "game of chicken" to win more aid, he said.

"This could be a lot of posturing for the purpose of trying to get a better side deal. Just don't do it for too long."

Story by Chris Buckley


Asia Power to Buy Renewable Power Plants in China


4th May 2007

SINGAPORE - Power plant operator Asia Power Corp. Ltd. plans to buy one to two renewable energy plants in China every year, banking on the country's drive to curb growing pollution.

These plants would either be water or wind powered, Asia Power's Vice-President Tian Aimin told Reuters in an interview.

China has come under increasing pressure by the international community to rein in environmental pollution in many of its industries. The government said in March that it will raise renewable energy to 10 percent of total energy use by 2010, even as it continues to rely on coal for most of its energy needs.

Asia Power, founded in 1997, has snapped up stakes in eight plants across China -- five hydropower plants and three coal-fired plants -- taking its total generating capacity to 738 megawatts (MW).

"Our investment strategy is to acquire power plants that are already running," Tian said, adding that buying and running existing plants rather than building new ones was more profitable.

"Within three to five years, we hope our power generation can be more than 1,000 megawatts," he said.

The firm would take a controlling stake in these joint ventures and fund these acquisitions using either its cash reserves, bank loans or funds raised from the sale of shares, Tian said.

Asia Power, with a stock market value of US$88 million, is one of the few energy firms listed on the Singapore bourse and competes with China EnerSave which is valued at US$126 million.

Hydropower plants have lower operating costs, as they only require one-fifth of the manpower needed to run a coal-fired one, Tian said, adding that the firm does not have to buy fuel for the plant.

Shares of Asia Power gained 2.7 percent on Tian's comments to trade at S$0.38 by 0832 GMT.


Tian also said that Asia Power is in talks to buy one or two wind power plants in the provinces of Heilongjiang and Xinjiang and may conclude those deals by the end of this year.

As Asia Power shifts its focus to develop renewable energy, Tian said that the firm plans to sell two of its coal-fired power plants -- potentially worth about 400 million yuan (US$52 million) -- within the next two years.

Tian said that Asia Power does not plan to expand abroad, as it wants to capitalise on the rising need for energy in Asia's fastest-growing economy.

"Currently we still see a lot of opportunities to invest in China, so there's no need for us to go out," Tian said. "We are only limited by our size, so what we need is more funds to expand into the China market."

In 2006, Asia Power posted a near-doubling of net profit to S$19.9 million (US$13.12 million), on the back of the sale of two of its associates. Revenue rose 23.6 percent to S$98.1 million, after the firm recognised sales from its newest hydropower plant.

Shares in Asia Power have risen 15 percent so far this year, slightly underperforming the benchmark Straits Times Index which has risen by about 16.3 percent in the same period. (Additional reporting by Ovais Subhani)

Story by Wee Sui Lee


Gerdau mulling expansion plans in China - Brazil


3rd May 2007

Brazilian long steelmaker Gerdau (NYSE: GGB) is considering expanding operations into China, CEO André Gerdau Johannpeter told reporters during a conference call Thursday.

"There is no deadline or confirmation at this moment of entering the market or any business [deal]," the CEO said. "We have been studying for several months and we will continue to do so until we find a good opportunity to invest in China."

In terms of acquisitions, Gerdau has shown significant enthusiasm of late. The company secured a majority stake in Peru's largest steelmaker Siderperú last year and purchased steel companies in the US. Meanwhile, the group entered the Mexican market in 2007 with the acquisition of Siderúrgica Tultitlán for US$259mn. Porto Alegre-based Gerdau is the largest long steel producer in the Americas, with crude steel production of 4Mt in the first quarter of this year.

By Roberta Pregnaca
Business News Americas


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