lundi 30 mars 2015

Transition to renewable energy: not quick but better if people are frightened

Prudence Dato,, IREGE/University of Savoie (France)

The latest climate change news includes both new engagements and enforcement of existing engagements. For instance, the new US commitment aims at reducing their emissions up to 40% (from 2008 to 2025), and increasing up to 30% the share of electricity from clean energy sources. Also, the European Union (EU) leaders agreed to develop innovative strategies for a new generation of renewable energies and increase energy efficiency through the European Energy Union, while China found it more interesting to enforce existing pollution regulation than taking new engagements.[1] However, the full energy transition maybe hindered by some constraints such as the availability of inputs (mostly rare materials) and the need of fossil fuels to produce solar panels or wind turbine as a self-reproducing photovoltaic cells or wind turbine is not possible.

Dato (2015)[2] considers the issue of energy transition in a theoretical growth model that involves both the decision of renewable energy adoption and that of investment in energy saving technologies. The results suggest that the sole adoption of the renewable energy is optimal only in the long run. This result is in line with the asymptotic energy transition argument that states that the transition to "clean" energy only happens in the long run. It may be a consequence of the impossibility of self-reproducing renewable energy. As the economy still needs fossil fuels to produce clean energy, it is efficient to progressively replace fossil fuels with a clean source of energy. Then, a quick and full energy transition is not optimal for the economy, and one should not expect any immediate transition to an economy that only uses renewable sources of energy. Dato (2015) suggests that economic instruments such as taxes on the "dirty" energy or subsidies on the "clean" energy should be designed to meet the requirements of a transition to a sole use of "clean" energy in the long run.

The results of the study also show that the economy that fears pollution is more favorable to the energy transition. This suggests that people must be more sensitized about the potential consequences of their use of fossil fuels. Clearly the “Under the Dome” video[3] does the job for China. What for Europe? For several hours on Wednesday last week, Paris was declared the most polluted city in the world. Scary isn’t it? Well, mainly due to exceptionally good weather conditions in Shanghai…and although car driving is banned on alternate days in Paris, there is still a lack of explanation and of sensitization.

[1] See previous post in this blog (

[2] P Dato (2015). Energy transition under irreversibility: a two-sector approach. FAERE Working Paper, 2015.05.

samedi 7 mars 2015

Is China saving the world ?

It seems not. Were China really dealing with pollution then the rest of the world could be relieved because the PRC is really a big fish. But these days, China's Parliamentary Sessions are held in Bejing and nothing exciting about pollution came out so far. As stated by a title in the SCMP:1China makes no new promises in battle to clear the day as it fine-tunes pollution targets”

This seemingly passive position is observed 5 days after the release of Chai Jing's viral documentary, “Under the Dome”.2 This documentary is in some way the Chinese counterpart of Al Gore's “Inconvenient Truth”; however its presentation and the scientific facts it reports -such as the list of the chemicals brought by PM2.5 in the lungs- are more rigorous. It is sometimes over-emotional, when it takes the reference to the reporter's daughter. Sometimes, it is over-interpreted, for instance mixing correlation and causality or showing fake econometric models and it is not clear whether the data collected could allow a correct economic analysis. However it remains that it is a very impressive amount of work and of information. Notably, it points out that at least part of the smog issue in China comes from the absence of enforcement of existing regulation.

During the NPC Session, a clear commitment has precisely been made to now fight more illegal polluters as well as those who fail to properly carry out their supervisory duties. As mentioned by Li Yan, Head of Climate and Energy at Greenpeace East Asia "it is now time to convert the words into real actions". But last but not least, the fact that Chai Jing documentary has been released on the internet is maybe the largest proof that China is decided to do something against air pollution. This documentary features important government officers, companies leaders. It thus hard to imagine it can have been released without government approval. And in fact what best way than such a viral movie to make anyone ready to accept the implementation of constraining environmental measures? Eventually, China may well be doing a step towards saving the world.

Notes on what has happened since this post was online:
-  the new Environment Minister (Chen Jining) also declared that the government will go after illegal polluters: "We would publish activities of the government and enterprises, leaving no space for violators to hide from the environmental protection law", he said at a press conference for the thirs session of the NPC.
- after 200 million views, "Under ther Dome" has been deleted from major Chinese video websites (so far, the link below is still valid).

2 for a version with english subtitles.