China and India to play key roles in Climate Change battle, says S&P

Projections for global emission increases could understate the growth coming from India and China, according to a report published by Standard & Poor’s Ratings Services, making the process of climate stabilisation more daunting than it otherwise would be.
The report, titled “Global Carbon Emissions And The “Chindia” Factor,” says investments made in China and India over the next 10-20 years in power generation, production processes and end-use energy efficiency are critically important to the climate change effort as they will determine the type of long-term energy infrastructure that will get locked into the world economy.
The transitional economies of India and China are feeling strong pressures to expand energy supply as quickly as possible, often by using carbon-intensive resources and technologies. While both countries have proposed a number of initiatives and programs to combat climate change, coal-fired power generation still remains the cheapest, but dirtiest, source of energy for these countries–and the most widely used.
“The extent to which these rapidly developing nations will be able to shift away from coal-fired generation toward low-carbon energy investments is crucial to reducing greenhouse gas emissions worldwide,” said Standard & Poor’s credit analyst Aneesh Prabhu. “With China accounting for a fifth of human population, the level its per-capita emission ultimately stabilises at is a key determinant of future global CO2 emissions. If this turns out to be anywhere near current US levels, no amount of effort by the rest of the world will be able to cap global emissions at 7GtC per year.”
Carbon dioxide intensities in China and India are higher by over five and three times, respectively, than in the U.S. Against the IEA’s assumption that China will add less than 30 GW/yr of coal plants each year, 70 GW was built in 2005. This rate of increase – nearly equivalent to the UK power grid each year – is expected to have been repeated in 2006 and maintained in 2007.
Coupled with the energy inefficiency of Chinese industries in general, this has contributed to the sharp pick-up in China’s per-capita emissions. Exacerbating this trend, Chinese households appear to be developing an American-like penchant for car ownership as their incomes rise.
An internationally negotiated mechanism is of immediate importance in order to shift the energy investments in these countries towards a low carbon economy. Ultimately, the baseline emissions path in the world economy has to be altered if the problem of global climate change is to be addressed.