Home Blogs Asian Chemical Connections China And The New IPCC Report

China And The New IPCC Report

Business, China, Company Strategy, Economics, Environment, Europe, Sustainability, Technology
By John Richardson on 30-Sep-2013


By John Richardson

THE blog isn’t a scientist and it has also often discussed the dangers of another consensus view: That the global economy will return to the Old Normal.

Nevertheless, the Intergovernmental Panel on Climate Change (IPCC) has now said that there is a 95% chance that human activity is causing climate change, drawing on papers from over 800 scientists.

“If you were 95% sure that your lifestyle was making you ill, you would change your way of life or buy the best available health insurance,” said Paul Simpson, CEO of the London-based Carbon Disclosure Project (CPD) after last week’s release of the new IPCC report.

Sure, you can argue that the CPD is just one of many not-for-profit organisations that have a motive to peddle the consensus that human activity is definitely causing climate change.

But for us, what is being is said in this case matters far more than who is saying it. Buying insurance against man-made climate change seems to make a great deal of commonsense.

Crucially, also, the sceptics might continue to shout as loudly as they like, but they may no longer be heard by the people who really matter: The legislators.

This is most obviously the case in the EU, as my colleague Nigel Davis points out in this thoughtful and excellent Insight article on many of the issues surrounding the release of the new IPCC study.

It might also be the case that China’s top legislators are convinced about the need for tougher regulations governing carbon dioxide and other greenhouse gas emissions. Time to revise some outdated stereotypes and build new chemicals growth and investment scenarios for China?

As this Huffington Post article points out:

  • China’s own 710-page Second National Assessment Report on Climate Change, released to the public last year, warns that China itself faces extremely grim ecological and environmental consequences from global warming.  These impacts, including increasing droughts and floods, threaten China’s already vulnerable food and water supplies, and rising sea levels will affect millions of people in Shanghai and other highly populated coastal cities.
  • China is closing heavily polluting factories [including chemicals plants, we have heard anecdotally], prohibiting new coal-fired power plants in major industrial regions, and investing more in renewable energy than any other country in the world.
  •  It is experimenting with CO2 cap and trade programmes, debating a carbon tax and drafting a climate change law.
  • The National Development and Reform Commission, China’s top administrative body, is also working with China’s top energy experts to develop a comprehensive, enforceable programme that will put a nationwide cap on coal consumption.

The strong possibility that human activity is causing climate change is not the only reason for much of the above legislative push. Other reasons are terrible air, land and water pollution.

“Vested interests” will continue to fight the bad fight in China, particularly the state-owned (SOEs) enterprises because belching-out high levels of pollution from outdated chemicals and other plants has made them lots of money.

Building even more of these plants is unlikely to improve the bottom line of the SOEs, though, given the extent of oversupply across of all manufacturing industries. However, it remains an easy way to generate high levels of GDP growth.

But at least one senior executive with a chemicals company, who is in charge of sales and marketing for greater China, has detected a major sea change over the last 12 months.

“China’s new leaders really mean business on the environment. The issue of global warming aside, air pollution is a huge problem for them because it is causing a great deal of social unrest,” he said.

“In the future, I think that whilst it might be possible to further develop existing chemicals complexes in China, a tougher approvals process will make it harder to create new sites.”