CHONGQING—This year china surpassed the U.S. as the world’s largest emitter of greenhouse gases. And coal is largely to blame. The dirty black rock is burned everywhere, from industrial boilers to home stoves, and generates 75 percent of the nation’s electricity. More than 4,000 miners die every year digging the fossil fuel out of China’s heartland. One consequence of the country’s reliance on coal is most visible in the air. Smog cloaks cities, reducing the sky to little more than a blue patch amid a blanket of haze. As the pollution builds, it forms a brown cloud, visible from space, that in a week’s time crosses the Pacific Ocean to the western U.S., where it accounts for as much as 15 percent of the air pollution.

The haze means no true horizon can be seen when one is walking the streets of Chong­qing, an inland port city on the Yangtze River that produces most of China’s motorcycles as well as other industrial goods. It seems the entire Rust Belt of the U.S. has been crammed into this “furnace of China,” as it is known—a single community of more than 30 million people, twice the size of the New York City metropolitan region.

Chongqing’s men, women and children breathe air filled with lung-clogging soot and smoke. Nationally, health care associated with respiratory ills costs China an estimated $100 billion a year, according to the World Bank. Furthermore, the foul air can literally stunt the growth of the next generation, according to recent research from Frederica P. Perera of Columbia University and her Chinese colleagues.

The Chinese have been burning coal for centuries. They now consume 2.5 billion tons a year—more than double that of the U.S.—and imports are rising despite extensive domestic mining. In 2007 the country’s 541 coal-fired power plants pumped out 554,420 megawatts of electricity, according to the Chinese State Electricity Regulatory Commission—roughly equivalent to the output of 550 large nuclear reactors. On average, China opens one coal-fired plant every week to serve its 1.3 billion people and the massive industries that manufacture cheap goods, largely for the U.S. and Europe.

Notwithstanding its deeply polluted state, China is also working feverishly to clean up. It plans to reduce pollutants by as much as 10 percent over the next five years. Part of the effort involves creating carbon-neutral cities and expanding renewable energy sources, as described in the stories that follow. Much of the strategy, however, is simply to shutter small, inefficient coal plants and replace them with larger ones that are more efficient. “To close small plants, it will be very effective to improve air quality,” Sarah Liang, a spokesperson in Greenpeace’s Beijing office, tells me. But that still leaves a load of pollution.

Greener Generation
Despite the surfeit of soot, the average Chinese citizen accounts for a mere fraction of the greenhouse emissions of the average American. Sheer population overcomes the small
per capita number, however, and the country is not bound by any international treaty to reduce its pollution. Nevertheless, the government has at least started to tackle the problem by launching a pilot project to capture and store the carbon dioxide (CO2) produced from burning coal at a demonstration power plant dubbed GreenGen.

The project, in the Yellow Sea port city of Tianjin northeast of here, will proceed in three phases. First, a consortium of power and coal companies will construct a so-called integrated gasification combined cycle power plant. In this design, coal is converted into a gas, and pollutants are removed before the gas is burned. Such technology could cut acid rain–causing sulfur dioxide emissions by more than 90 percent and smog-forming nitrous oxides by 75 percent—as well as capturing more than 80 percent of the CO2 emitted by 2015 and storing it in nearby depleted oil fields.

The $1-billion GreenGen plant became the world’s leading clean coal project in January after the U.S. government pulled the plug on FutureGen, a similar demonstration plant in Mattoon, Ill., that lost steam as construction costs skyrocketed. The cancellation came despite the fact that the United Nations Intergovernmental Panel on Climate Change and leaders of the world’s eight richest nations (the G8), including President George W. Bush, had called the development of clean coal technology essential to preventing the consequences of climate change.

Completing GreenGen, which will generate up to 250 megawatts of electricity, may prove daunting, however. “There’s no co-benefit to doing the carbon capture and storage,” says energy technology expert Kelly Sims Gallagher of Harvard University’s Kennedy School of Government. “There’s an argument for doing GreenGen in terms of research and getting experience with it, but from a commercial point of view it doesn’t make sense.” The reason: extra energy is consumed to turn the coal into gas and subsequently to then capture the CO2—in effect requiring the burning of more coal to generate the same amount of electricity.

GreenGen is a for-profit power plant, so economic gains or losses will determine whether its owners ever proceed with the capture-and-storage step. One argument in its favor would be to pump the extracted CO2 into underperforming oil wells to recover more of the oil. In an environment where oil is more expensive than ever, that approach could be “economically viable and valuable for nations that are rich in coal,” says Vic Svec, a senior vice president at U.S. coal giant Peabody, which is part owner of GreenGen.

Better Enforcement Needed
Residents of Chongqing got a glimpse of cleaner skies in the years leading up to the recent Olympics, as factories were shifted to the outskirts of towns and small, inefficient coal power plants were closed to clear the air for visiting media and tourists. “When I was young, the sky was green, and we [could not] see stars at night,” says local government official David Lee, a lifelong Chongqing resident. “This year we see blue skies and stars. We think it’s much better.”

The air can still be tasted on the tongue, however, and felt in the lungs. And it still obscured the horizon for this observer. Among the culprits are companies that flout clean air laws—as well as lackluster efforts to enforce those laws. Factories and power plants turn on the pollution-­control equipment when government officials visit, but when they leave the controls are shut off to boost power production. “The government cannot check every day,” Lee says. But regulators “need to enforce the environmental laws if they want blue skies,” insists Li Junfeng, secretary general of the Chinese Renewable Energy Industries Association.

Other cities, such as Zhengzhou in China’s most populous province of Henan, have little hope of clear skies any time soon. The atmosphere in the provincial capital is thick with pollution because the movement of factories and power plants away from signature cities such as Beijing has put them closer to less well-known metropolises.

Despite a ban on coal burning and $17 billion spent on clean air measures in the past decade, smog is still an issue in Beijing, in part because cars have proliferated in recent years. “It is bitter air that you can feel,” says resident Timothy Hui, a program manager in the Beijing office of the Natural Resources Defense Council, a U.S.-based environmental group. “People hate it. They complain.”

Some analysts place part of the blame on Western countries. A full 23 percent of China’s greenhouse gas emissions can be linked to the production of goods exported to the West, according to the Tyndall Center for Climate Change Research in England. Researchers at Carnegie Mellon University put the share even higher: at 33 percent.

That demand doesn’t absolve China from cutting back on noxious emissions or taking more responsibility for the fate of the world’s climate, which in no small part will be forged in the crucible of its industrial cities. “Gradual warming of the earth’s atmosphere is caused by the developing countries as well as the developed countries,” says Wang Xiansheng, professor of English at Zhengzhou University. “The whole world should get united to deal with the problem.”

RIZHAO: Crafting a Carbon-Neutral City
Homes and industry are being converted

RIZHAO—This coastal resort city, which faces east toward Japan and Korea across the Yellow Sea, takes its name from an ancient poem, ri qu shien zhao, or “first to get sunshine.” More than 2.8 million residents enjoy that early light, along with gentle sea breezes. Thus, it seems appropriate that Rizhao is among the first cities in the world to pledge to become carbon-neutral: to balance the amount of greenhouse gases emitted with the amount of greenhouse gases eliminated. In Rizhao’s case, the challenge will be met by harnessing that sunshine.

“I don’t know when we will succeed,” says Fan Changwei, a tall, thin, middle-aged lawyer with the city’s Environmental Protection Bureau, “but we will move in that way.” Only three other cities around the world—Arendal in Norway, Vancouver in Canada and Växjö in Sweden—are attempting the feat, according to the United Nations Environment Program (UNEP).

All four municipalities are being driven not just by the need to mitigate climate change but by “the abundant economic opportunities emerging for those willing to embrace a transition to a green economy,” according to UNEP executive director Achim Steiner, speaking in February at the launch of the Climate Neutral Network, an effort to connect cities, countries and companies working to achieve this ambitious goal.

Economics is certainly motivating Rizhao, which is scrapping many of the long, low buildings that make up most of its homes and businesses and replacing them with high-rises. Nearly all the new skyscrapers take advantage of Rizhao’s yearly average of 260 days of sunshine by heating domestic hot water on their rooftops; 30 percent of new buildings going up in surrounding suburbs and villages also exploit the technology. The water is heated by dark arrays of tubing on the roofs or by grill-like units installed underneath the ubiquitous enclosed terraces of most apartments.

Popularizing solar hot water was the first step in greening Rizhao, says Wang Shugang, chief of the city’s environmental bureau. The effort got under way in 2004, when the Beijing Shang Shui Hotel installed a rooftop system made by Tsinghua University. Today newer solar hot-water systems cost about $190, which is around the same price as electric heaters—but they save significantly on electricity. “To save money is very important,” Fan notes.

The second key step, according to Wang, was to shut down many small-size businesses that were primary consumers of coal, including paper, cement and steelmaking factories. Food, furniture and other factories have been shifted to industrial parks on the rim of the city. The local coal-fired power plant also installed a scrubber made by Siemens that extracts dust and sulfur dioxide from the facility’s smokestack.

But it is the local Luxin Jinhe Biochemical Company that truly illustrates the concept of a “circular economy” based on renewable energy and sustainable processes. Luxin Jinhe makes citric acid, a key ingredient in beverages such as Coca-Cola and Pepsi, as well as other prepared foods and various medicines. In the company’s huge vats, microbes chew up the sugar in cassava, corn and sweet potato, turning it into the weak acid. By-products are separated, with liquid wastes flowing to biodigesters, where microbes break them down into methane. This “marsh gas” is then burned to produce electricity and to dry the remaining solids. The dried wastes are converted into bricks of meal for domestic animals and into fertilizer sold to farmers in the community.

The citric acid plant is just one of 10 similar enterprises fueled by marsh gas. “To develop a circular economy is a good way for carbon-neutral and also for energy conserving and energy efficiency,” Fan says. The city also hopes to compress such methane into a liquid fuel and even pipe it to homes for cooking. Small-scale biodigesters are being used in villages throughout the region, even in individual homes, thereby improving indoor air quality.

As a result of these efforts, Rizhao has seen economic output rise while energy use has fallen by nearly a third, unlike the rest of China. The city’s gross domestic product doubled between 2000 and 2005. Carbon dioxide emissions have been cut in half. Rizhao’s former mayor, Li Zhaoqian, has been promoted to vice governor of Shandong Province, partly in the hope that he will be able to replicate the city’s success on a larger scale. After all, Rizhao has both enhanced its economy and improved the environment, a recipe the rest of China—and the world—has struggled to match.

BEJING: Wind Accelerating, Solar Electric Slow
Goals are ambitious but hard to meet

BEIJING—Winds rush through the capital city of China, in springtime blowing dust storms that envelop it in grit from the encroaching Gobi Desert. Last year the city government finally took advantage of those winds, installing 33 wind turbines in western suburbs, offsetting the need to expand dirty coal-fired power plants. The turbines, manufactured by Xinjiang Gold Wind, began turning in earnest in January, supplying 300,000 kilowatt-hours of electricity a day, enough to provide 20 percent of the power to the city’s Olympic venues, part of the nation’s pledge for a green Olympics.

China’s commitment to renewable energy is certainly real. The current national five-year plan calls for wind, solar, biogas and water power to account for 10 percent of the country’s energy consumption by 2010 (up from 7.5 percent in 2005) and 15 percent by 2020. Reducing dependence on polluting coal is only one motivation. The plan also states that “developing and utilizing renewables shall be an important part of building a new socialist countryside.” Fifty entire counties in the provinces of Jiangsu, Shandong, Guangdong, Guangxi, Sichuan and Inner Mongolia that derive 50 percent of household energy from renewable sources are to be built by 2010.

“China is already one of the top re­newa­ble energy producers in the world,” says climate and energy campaigner Liu ­Shuang, who works in the Beijing offices of Greenpeace. The National Development and Reform Commission—the ministry charged with economic development—recently doubled its target for installed wind power to 10 gigawatts by 2010, after meeting the previous goal of five gigawatts three years early, largely in Inner Mongolia and Xinjiang.

The country now has 158 wind farms, according to the Chinese Wind Energy Association (CWEA). Major companies such as electricity giant Huaneng Group and state-directed China National Offshore Oil Corporation are planning more, according to engineer He Dexin, president of CWEA.

Greenpeace’s Liang adds that “all the good wind farm locations are now owned by the biggest energy companies.” Other prospectors are looking offshore. “China has the largest wind resources in the world, and three quarters of them are offshore,” notes Barbara Finamore, director of the Natural Resources Defense Council’s office here. Putting turbines in deep water could prove treacherous, however: typhoons wrecked poorly designed wind farms in the country’s southern region in recent years. And some builders are developing wind farms too fast, says CWEA’s Cai Fengbo. “The quality of wind generation suffered.”

Even though wind is expanding, the country is so power-hungry that turbines can meet only 0.6 percent of demand. The most optimistic projections have wind accounting for less than 3 percent of total electricity production by 2020—more than the current U.S. share of 0.4 percent but far less than Denmark, at roughly 20 percent. Regardless, China remains among the world leaders in building wind turbines, as well as their components. Even when foreign companies such as General Electric or Suzlon erect turbines, as much as 70 percent of the components are made in China.

China is also the number-one producer of solar photovoltaic panels. More than 200 manufacturers made 1,700 megawatts of the panels in 2007, according to the Chinese Renewable Energy Industries Association—nearly half of the world’s total production. Almost none of that remained inside the country, however. About “99 percent goes outside,” says the association’s Li Junfeng. “The local market is very limited because [photovoltaics] are too expensive.”

Around 80 megawatts of photovoltaics have been installed, cropping up on light poles and on the roofs of office buildings that house solar technology companies, such as the Beijing Solar Energy Research Institute’s headquarters. Still, says Greenpeace’s Liu, “It’s a waste of all the production in China. It doesn’t make sense.”

YICHANG: Water Power May Be Damned
Environmental complications could undermine hydro

YICHANG—According to legend, one of China’s ancient emperors—Da Yu, or Yu the Great—changed the course of history by placing a mountain in front of the Yangtze River, forcing it to flow east through the Middle Kingdom instead of south as the other great rivers of the region do. Not to be outdone, the modern Chinese government undertook a massive project just north of here to control the flow of this ancient waterway, erecting Three Gorges, the world’s largest dam.

That megaproject, completed in 2006 for $30 billion, provides 22,500 megawatts of power—more than 20 large coal-fired power plants—without emitting the greenhouse gases and other pollutants those plants would produce. The dam has also raised the water level in the upper reaches of the river by as much as 66 feet (20 meters), vastly improving commercial shipping. And it protects large communities downstream from terrible floods, such as the one in 1998 that forced 14 million people out of their homes. One of the main reasons to build the dam was “to store water in the upper river so as to protect eastern parts of the country,” says Lai Hun Suen, a professor of sustainable development at Chongqing University and a municipal government official.

Even with considerable efforts taken to develop wind power and solar hot-water heating, hydroelectric dams remain the cleanest, cheapest form of alternative energy in China. The country is blessed with abundant resources: 400 million kilowatts of potential, of which only a quarter have been developed. “Within 30 to 50 years, hydro will be the main energy we should rely on,” Lai predicts.

Hydro accounted for 16 percent of total electricity generation in 2005, thanks to the completion of the Da Chao Shan, Gong Bo Xia and Three Gorges dams. But the massive projects also imposed great human and environmental costs, creating significant controversy. Three Gorges forced more than four million residents of villages, towns and cities in the path of the rising waters to relocate, most of them to bustling Chongqing. Numerous historic cultural sites and monumental natural features were also permanently flooded. Changing water levels now at times unleash a miasma of disease from exposed sewage. The unique baiji freshwater dolphin, native only to the Yangtze, has also been rendered extinct.

Environmental challenges could undermine the world’s largest dam as well. Silt could gum up Three Gorges, and climate change could drain the water supply, as the glaciers atop the Tibetan Plateau that feed the Yangtze dwindle. Efforts to emulate Da Yu—smaller dams that siphon off water have proliferated in the upper reaches of the river—could also undo the mightiest of man-made waterworks. “We have taken big floods into consideration,” Lai says. “What we did not expect is less water.”

Note: This article was originally printed with the title, "China's Energy Paradox".