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China Under More Pressure to Cut Emission Than India, CLSA Says

By Dinakar Sethuraman

Sept. 2 (Bloomberg) -- China is under more pressure from developed nations to cut carbon emissions than India as the world’s biggest greenhouse-gas emitter will contribute a large chunk of an increase by 2020, CLSA Asia-Pacific Markets said.

Carbon dioxide emissions will rise 50 percent by 2020 and China will contribute 63 percent of the increase and India 10 percent, Rajesh Panjwani and Charles Yonts, analysts at the brokerage, said in a report yesterday. China’s per capital emission already exceeds the world average, they said.

“Thus, while India will continue to add more coal power plants, China will have to take major steps to cut its coal addiction,” the Hong Kong-based analysts said. They rated Dongfang Electric Corp., Doosan Heavy Industries & Construction Co. and Suntech Power Holdings Co. a “buy” because of a focus on nuclear and wind businesses. Shanghai Electric Group Co., Harbin Power Equipment Co. and Datang International Power Generation Co. were ranked “underperform” as they use coal.

China may need to spend $438 billion a year by 2030 to reduce greenhouse emissions, with developed countries footing much of the bill, the Financial Times reported, citing projections made by economists at People’s University in Beijing. The figure, equivalent to about 7.5 percent of China’s projected gross domestic product, may be deployed during climate talks in Copenhagen at the end of the year.

Energy Consumption

“China’s CO2 emissions relative to economic activity and energy consumption are among highest in the world due to high share of manufacturing in the economy’s output, high share of coal in energy mix and energy inefficiency,” the CLSA report said. “These are also keys to cut emissions.”

The reluctance of the National Development and Reform Commission, China’s top economic planner, to approve new coal projects and the country’s unprecedented thrust toward nuclear and renewable energy underscores the concern among policy makers over the growth in emissions, the report said.

India is the fourth-largest emitter of carbon dioxide from burning fossil fuels, trailing China, the U.S. and Russia. China’s share in global emissions would rise to 36 percent from 22 percent by 2020, while India’s share will increase to 5.3 percent from 4.5 percent, according to the CLSA. The U.S. now accounts for 20 percent.

To contact the reporter on this story: Dinakar Sethuraman in Singapore at [e-mail].

Last Updated: September 2, 2009 01:15 EDT