When it comes to China’s environmental progress, it can be hard to find much of a silver lining. The front page of the newspaper in the office today showed Beijing choked with pollution, as over 200 flights had to be canceled. New data also came out that showed the increase in CO2 emissions in 2010 was the largest since the industrial revolution, and China’s lead as worst polluter continues to grow at an astonishing pace. Yet today, I’m feeling slightly optimistic about the future of the air quality as co-workers and friends more frequently discuss the urgency of this issue.
The other day I had the chance to help a person prepare a presentation about the energy saving measures taken in one of Nanjing’s largest public building projects. It will feature solar water heaters that can produce thousands of gallons of warm water for baths each day; rain water collection systems that would reduce the amount of water that would need to be treated by 60%; and an ice-cooled air conditioning system that would save the city millions of RMB each year just in operating costs.
It was when we were discussing the ice-cooled system that the man mentioned something that I hadn’t been aware of (we live on campus and don’t see the bills), Jiangsu province prices energy according to whether it is “peak” or “off-peak” usage. This means that the system will freeze water at night when prices are low, and then use that stored coolant during the day, when energy prices are high. Systems like this help reduce the overall energy demand, allowing Nanjing to power the city with fewer polluting power plants.
According to the director, the cost of the system is less than 5% higher than a traditional A/C system, but the operating cost is 50% lower than the traditional system. This price incentive is only present because of the dual pricing system.
The key bit to understand here is that cities have to build up capacity to meet peak power demands to avoid brownouts. To achieve this, additional power plants run in a kind of stand-by mode waiting for demand to increase. Unfortunately, these plants are not nearly as efficient as regular base load power plants (the ones that run all the time). So reducing peak power demand can greatly reduce CO2 emissions without asking people to make major sacrifices.
This dual pricing method helps offset the growing energy demands of China’s lower-middle class, because this group makes up a large part of the population but is still relatively poor, they are extremely price sensitive (as are many of China’s middle class). This means that a small price difference will lead them to use energy in a drastically different way. The director who was explaining the policy to me pointed out that he sets his watch every night just to let him know when off-peak prices have arrived so he can take a shower (which uses an electric water heater).
The director also told me that the motivation behind these green measures, was that power prices would be climbing higher as China struggles to curb emissions. If they didn’t implement these measures now, the costs later would be much higher.
I believe that the most effective way to get people to use electricity responsibly is to make the economic cost of electricity reflect the cost its production places on society. These costs are no where more visible than in China.
This struck me again last night as I was watching a nature film at a friend’s house. A Chinese friend couldn’t believe that the images of the night skies in the US were real. “In all my life, I’ve never seen stars like that,” he said shaking his head, fully aware of what a sad statement it was.