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China’s unexpected mitigation of SO2 emissions in the 11th Five-Year Plan

Xu Yuan

China has been the world’s largest emitter of sulfur dioxide (SO2) for over a decade. Its mitigation actions on SO2 have not only domestic but also global impacts. On one hand, SO2 is the precursor species of sulfate particles that cause serious air pollution and damages to public health. China’s relevant mitigation alleviates the burden on people in China as well as other countries.  On the other hand, sulfate particles create significant cooling effects on the climate and offset a sizable portion of the warming effects from greenhouse gases. China’s notable reduction of SO2 emissions indicates that the original warming trend could become even steeper.

Professor Yuan Xu who joined the department in August 2010 has examined China’s SO2 mitigation in the 11th Five-Year Plan (2006-2010) in his Ph.D. dissertation at Princeton University and postdoctoral research at Massachusetts Institute of Technology. With the case study, an objective of the research was to understand the use of goals in environmental protection, especially in China which does not practice the western democracy, has only limited rule of law and remains low in GDP per capita. The research also intended to systematically study China’s installation and management of flue gas desulfurization systems (or more commonly called SO2 scrubbers that are technology-intensive and expensive to install and run) from the perspectives of environmental regulation and industrial innovation. The experiences and lessons could help China and other countries better cope with other daunting environmental challenges, particularly CO2 mitigation.

Case study, interviews and data analysis were the main methods to perform the research. Professor Xu collected original data that were absent in the public domain on the operation and maintenance of China’s SO2 scrubbers and on the transfer of SO2 scrubber technologies. The research facilitated explaining a few key puzzles. Why did China pay unprecedented attention to SO2 mitigation in the 11th Five-Year Plan? Right after a new highest leadership coming into power, the SARS (Severe Acute Respiratory Syndrome) pandemic in the spring of 2003 provided on-time food for thoughts to formulate guiding principles for the new administration. A new ideology called “Scientific View of Development” was gradually developed and environmental protection gained a prominent priority. As the most severely missed environmental goal in the 10th Five-Year Plan (2001-2005), SO2 mitigation became a key representative in the 11th Five-Year Plan to establish the authority of this new ideology as well as the highest leadership.

How was China’s relevant governance organized? Partly due to China’s insufficient rule of law, different from many western countries, a goal instead of policies played the central role in mitigating its SO2 emissions. After the 10% reduction goal of SO2 emissions for the 11th Five-Year Plan was set up, multiple new policies were introduced for its attainment. Sub-goals together with coercive incentives motivated local government leaders to enforce the policies more willingly.

How did China install a huge amount of SO2 scrubbers in just a few years? A critical method to achieve the 10% reduction goal was to install SO2 scrubbers in coal power plants. From 2006 to 2009, China spent annually tens of billions of RMB to raise the share of coal power capacity with SO2 scrubbers from 10% to 71% despite the phenomenal addition of new coal power plants. At present, China has greatly more SO2 scrubbers than the rest of the world combined. The unit capital cost of installation in China decreased substantially to less than a quarter of that in the United States. The achievement is a success not only of China alone but also of the global division of labor. Though over 95% of the SO2 scrubbers were installed by Chinese companies, the technologies behind were generally from western countries. The global market for technology enabled the licensing of foreign technologies to China.

Are the SO2 scrubbers actually operating and removing SO2? A practical concern about the SO2 scrubbers was on their operation especially because China did not gain a good reputation in enforcing environmental policies. In the 11th Five-Year Plan, China tilted the calculation of the managers of coal power plants from two aspects: strong enough economic and administrative incentives were put into force; the likelihood of catching non-operation was enhanced through continuous emission monitoring systems and frequent inspections. Evidences are accumulating that most SO2 scrubbers in China should be in normal operation.

China’s 10% reduction goal of SO2 emissions had been attained one year ahead of schedule in 2009. Though the fate in 2010 is under challenges due to rapidly growing energy consumption as the economy recovers from the financial crisis, the success demonstrates that China has the capability and political will to achieve significant environmental goals. China announced a goal to reduce its carbon intensity by 40~45% in 2020 from the 2005 level. Since SO2 is the most difficult air pollutant China has ever effectively worked on, the research findings could provide implications for this even tougher task.

Fig. 1 Capacities of coal power and SO2 scrubbers in China and the United States (EIA, 2010; MEP, 2010)

Fig. 2 China’s annual spending on SO2 scrubbers as capital costs and operation and maintenance (O&M) costs

Fig. 3 China’s unit SO2 removal costs (RMB/ton SO2 removed)

(The author’s data can hardly distinguish changes of O&M costs between years)