understanding china's resource crisis
TRANSCRIPT
Understanding China’s Resource Crisis And its Path Toward Sustainability China’s Underappreciated Nexus of Energy, Water and Food
Presented at ‘The Future of Asian Consump@on’ Green Drinks China Event, 27 May 2013
• Energy • Water • Food
China’s Resource Landscape: Focus on 3 “Must-‐Have” Resource
China’s Resource Crisis: Key Take-Away
Ac@on is being taken – what are business implica@ons?
Demand outstripping supply, trends are unsustainable and could lead to economic & social disrup@on
Parts of complex systems (ecological, human), and must be considered holis@cally
Inac@on will lead to significant economic and social disrup@on
Inter-‐dependencies: Energy, Food, Water
• Understanding these elements as parts of interdependent systems – both natural and human – Energy requires water
• 20% China’s freshwater used for coal, increased evapora@on from hydro electricity
– Water requires energy • Transpor@ng/pumping, trea@ng & hea@ng water can take up between 33%-‐75% of energy bills in many ci@es
– Food requires water and energy • 65% Water used for crop-‐irriga@on • Fer@lizers are very energy intensive, also transporta@on/preserva@on
• Bioenergy crops compete with food crops for land/water • Fer@lizers for crops are pollu@ng water-‐systems from runoff
China’s 1st in Consump@on
E.g.: Steel, Cement, Glass, Housing, Power, Cars, Highways, High-‐Speed Rail Systems, Airports
Energy: Supply & Demand
China annually experiences power cuts and blackouts
• High thermal coal prices
• Drop in hydropower produc@on
• Excessive demand • Ra@oning to meet regional targets
Example: Electricity demand spike
Water: Quantity and Quality
China is “mining” its water about 25% faster than it can replenish
A compounded problem: Low availability and low quality
China’s per capita water is 2,100 cubic meters – 28% of the world average
According to the Ministry of Environmental Protec@on (MEP), 25% of China’s water only fit for industrial or irriga@on.
That means 75% of water does not meet the standards for fish farming and municipal use.
China has capped water consump@on at 700 million cubic meters – current consump@on is at 600 million cubic meters currently
Source: ADB, 2012
Food: Driving Inflation
The Big Fear: Inflation
Energy: Consumption & Composition
Source: IEA, 2011
China’s Resource Landscape: Energy
China’s Energy Produc@on: 1997 China’s Energy Produc@on: 2010
Source: www.circleoflue.org
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China’s Water Resources: 2002 China’s Water Resources: 2010
China’s Resource Landscape: Water
Source: www.circleoflue.org
China’s Resource Landscape: Food
Food produc@on, 1997 Food produc@on, 2010
Source: www.circleoflue.org
Climate Change: Amplifier Effect
China loses an average of 10% of annual grain output a year to extreme weather such as floods, droughts, rainstorms, and high/low
Water is the primary vector of climate change and is apparent through changing paherns of availability and extreme weather, droughts and floods.
China is the 3rd most vulnerable country to Climate Change in the G-‐20 Countries (aier India and Indonesia)
Climate Change makes Energy, Water and Food problems worse
Sustainability Targets of China’s 12th FYP
Set at Na@onal level Province level City level Corporate level (some@mes)
Electricity sector fuel mixes
2010 2020
China’s Resource Nexus
20% water used in coal value-‐chain
Biofuels compete for land w/ food
17% electricity from hydro
65% water used for irriga@on
Land use changes, and soil impacts
Irriga@on prac@ces quite wasteful
Fer@lizers are energy intensive
Conflic@ng needs of forestry
Water losses from hydroelectricity
Coal in N, Food in NW, Water in South
Resource Conflict – Energy, Water, Food
Key points
+86 155 0213 6647
Resource scarcity must be considered in the context of an interdependent system
Current development model is not sustainable, but big ac@on is being taken
Understanding the context is the key to aligning with these strategic priori@es
Being part of the solu@on can mean big profits
Addi@onal Resources Report: Delloite, 2012: No Water No Energy, No Energy No Water Report: HSBC, 2012: 20 China Climate Risk QuesCons Website: www.circleoflue.org