China’s one child policy and aging population may just wipe out its biggest competitive advantage – cheap labour. It is the most populous country in the world with 1.35 bn people. But its populace is graying at a fast pace and there are too few babies born. According to government statistics, the proportion of the population aged between 15 and 64 fell to 74.4% in 2011. This was the first fall in ten tears. This Asian giant may face economic stagnation akin to Japan if it fails to adopt certain reforms to compensate for its shrinking workforce. Japan’s demographic dividend disappeared in 1990, and its economy stagnated ever since.
Wages in China have been steadily rising over the years, even rising in double digits. Now they seem to be on a permanent upward trajectory. The standard of living has improved in many parts of the country. An aging population also calls for increased wages to pay for healthcare and other allied expenses. Possibly the only answer to this predicament is for China’s growth engine to completely turn on its head. Rather than simply focusing on a cost advantage it needs to bring something else to the table. It needs to focus on innovation and productivity. Or can another country win the race?
On the other side of the Himalayas, India has a big advantage. India is one of the few countries in the world having a positive birth rate and a huge demographic dividend. Its working-age population mainly consists of youth (15-34 years). As a result its economy has the potential to grow more quickly than many others. But, it may not be doing enough to leverage on this potential.
Currently only about 2% of the Indian workforce has formal training as against an average of 75% in Europe. To bridge this divide the government needs to earnestly focus on skill development. The Prime Minister’s National Council on Skill Development has endorsed a vision to create 500 m skilled people by 2022. But, will this be another target India fails to achieve? Measuring the quality of the training given is another matter altogether.
When the countries around the world announced emission reductions, cuts, plans the media cheered. However, if we all did some basic algebra it would be different.
For example, the US announced its plans based on 2005 rather than the 1990 conventional numbers used in Kyoto. Why? Because US emissions grew a lot from 1990 to 2005 and reductions from a large base is easier. Australia is using 2000. China uses 2005 and India another number. So every country is talking a different benchmark. So, we cannot actually compare.
May be we should GDP per capita as a benchmark.
On the second set of numbers. US announced reduction in carbon emissions and China, India announced carbon intensity reductions. Both are as different as apples to oranges. But the press misses this. For an example check out the Ny Times. Just to clarify, I support the carbon intensity focus of the developing countries. My gripe is with media reporting.
I am happy to hear that China has pledged to reduce its carbon intensity by 40% by 2020 but does this guarantee a smaller global carbon footprint? Recall that carbon intensity = tons of CO2/GNP. China’s economy has been growing by 8% per year. Make the big assumption that this average growth rate will continue until 2020 and ignore compounding. So, in ten years their economy will be 80% bigger and their carbon intensity will be 40% lower than it is now. So, according to my logic relative to today, China’s total carbon emissions will be .6*80% or 48% higher. From Al Gore’s standpoint, is that progress? At the same time that President Obama is pledging a 20% reducing in CO2 emissions (under these growth assumptions), China’s government is pledging that their emissions will be 48% higher.
Pure water is one of the world’s most precious natural resources. With much of India’s population denied access to safe drinking water, the delivery of safe, convenient and affordable water purification is one of the biggest social and technological challenges in the country today.
Responding to this challenge, Tata Chemicals today unveils ‘Tata Swach’ – a unique and innovative water purifier. Requiring no energy or running water to operate, an early version of the product first saw the light of day as part of the Tsunami relief efforts. Today, the replaceable filter-based product, which is entirely portable and based on low-cost natural ingredients, delivers safe drinking water at a new market benchmark of Rs30 per month for a family of five.
Speaking at the launch, Ratan Tata, Chairman, Tata Sons, said: “Safe drinking water is the most basic of human needs. The social cost of water contamination is already enormous and increases every year. Although today’s announcement is about giving millions more people affordable access to safe water, it is an important step in the long-term strategy to find a solution to provide affordable access to safe water for all.”
Tata Swach is the result of years of collaboration between several Tata companies, including TCS, Tata Chemicals and Titan Industries. Based on an innovative concept developed by the TCS Innovation Labs – TRDDC, the Swach technology combines low-cost ingredients such as rice husk ash with superior nanotechnology. The efficiency of the product has been rigorously tested to meet internationally accepted water purification standards.
Water-borne disease is the single greatest threat to global health, with diarrhoea, jaundice, typhoid, cholera, polio, and gastroenteritis spread by contaminated water. According to a 2007 United Nations report, half of the world’s hospital beds are occupied by patients suffering from water-borne diseases. In India, such diseases cause more than 1.5 times the deaths caused by Aids and double the deaths caused by road accidents.
“We are telling the world that India is voluntarily ready to reduce emission intensity by 20-25% in 15 years from 2005. The Planning Commission has, on the basis of historical experience, concluded that a 20-25% cut in emission intensity between 2005 and 2020 is possible. India will not be taking a legal undertaking and this will not be a law,” minister of state for environment and forests Jairam Ramesh told the Lok Sabha.
Following on the heels of China India does the right thing to suggest voluntary carbon intensity cuts. The interesting thing is how many people confuse carbon intensity with carbon emissions. Even, Economic times has the headline with carbon emissions.
“Japanese companies reinvented the process of making cars. That's what we're doing in health care,” Dr. Shetty says. “What health care needs is process innovation, not product innovation.”
At his flagship, 1,000-bed Narayana Hrudayalaya Hospital, surgeons operate at a capacity virtually unheard of in the U.S., where the average hospital has 160 beds, according to the American Hospital Association.
Narayana's 42 cardiac surgeons performed 3,174 cardiac bypass surgeries in 2008, more than double the 1,367 the Cleveland Clinic, a U.S. leader, did in the same year. His surgeons operated on 2,777 pediatric patients, more than double the 1,026 surgeries performed at Children's Hospital Boston.
Next door to Narayana, Dr. Shetty built a 1,400-bed cancer hospital and a 300-bed eye hospital, which share the same laboratories and blood bank as the heart institute. His family-owned business group, Narayana Hrudayalaya Private Ltd., reports a 7.7% profit after taxes, or slightly above the 6.9% average for a U.S. hospital, according to American Hospital Association data.
To my mind, the Green path forward begins with environmentalists realizing that nuclear power will grow no matter what we do. Our customary opposition would make it grow badly – slowly, expensively, unsystemically, and with dangerously poor overall coordination. But if we encourage it in the right way, nuclear energy growing well would mean that it minimizes humanity’s carbon-loading of the atmosphere; that it collaborates well with other carbon-free or superefficient energy forms; that it helps generate other Green services such as desalination or hydrogen . . . that it helps eliminate nuclear weapons; that it securely energizes cities and thereby helps to reduce world poverty . . .
In his lecture at the Longnow Foundation (from Fora.tv) he explains how slum dwellers in Dharavi, Mumbai, India are the greenest people on earth who live on very less energy and resources and recycle everything. However, this is possible because they are some of the poorest people on earth. And, they do not want to be like that.
From one of his TED talks
Here is the biggest paradigm that the developed world does not want to understand.
You cannot be rich without abundant and cheap energy.
How do you become rich and have low per-capita emissions? – Nuclear Energy, Geothermal and Hydro.
LightBucket has some fantastic analysis in this regard.
Table 1 shows the energy mix and carbon emissions data for the so-called “developed regions” as defined by the UN Statistics Division [1]. I’ve highlighted some of the stand-out numbers, both highest and lowest, and I’ll discuss these below.
Table 1. Energy mix, energy use and CO2 emissions by GDP and by population
Country
Energy Mix
Power/
Capita
CO2/GDP
CO2/Capita
fossil
nuclear
renew-
ables
other
kW/capita
tonnes CO2/
US$10000
tonnes CO2/
capita
Luxembourg
92%
0%
2%
6%
13.9
3.4
26.5
United States [6]
86%
8%
6%
0%
10.5
5.2
20.4
Australia [7]
97%
0%
3%
0%
7.9
5.1
19.0
Canada [8]
67%
7%
25%
0%
11.2
6.4
18.5
Estonia
87%
0%
10%
3%
5.0
16.3
14.3
Finland
59%
16%
23%
2%
8.9
3.5
13.2
Czech Republic
79%
15%
3%
3%
5.9
10.8
12.5
Belgium
75%
22%
2%
1%
7.2
2.8
12.2
Ireland
97%
0%
2%
1%
4.9
2.3
11.1
Netherlands
94%
1%
3%
2%
6.7
2.4
11.1
Germany
84%
12%
4%
0%
5.5
2.9
10.7
Denmark
85%
0%
14%
1%
4.8
2.2
10.2
Japan [9]
83%
12%
5%
0%
5.5
2.7
10.1
Greece
94%
0%
5%
1%
3.7
3.7
10.0
Norway [10]
37%
0%
60%
0%
9.2
3.4
9.6
Austria
77%
0%
21%
2%
5.5
2.4
9.4
United Kingdom
89%
9%
2%
0%
5.2
2.7
9.4
Italy
90%
0%
7%
3%
4.2
2.6
8.5
New Zealand [11]
71%
0%
29%
0%
5.5
3.2
8.4
Poland
95%
0%
5%
0%
3.2
12.2
8.3
Spain
82%
12%
6%
0%
4.4
3.2
8.3
Slovenia
69%
19%
11%
1%
4.9
5.0
8.2
Slovakia
72%
23%
4%
1%
4.6
8.6
7.9
Iceland [12]
28%
0%
73%
0%
16.3
1.7
7.8
France
52%
40%
6%
2%
5.8
1.9
6.9
Bulgaria
71%
22%
5%
2%
3.4
17.5
6.8
Portugal
83%
0%
15%
2%
3.4
3.3
6.3
Sweden
37%
37%
26%
0%
7.7
1.5
6.2
Switzerland [13]
63%
24%
13%
0%
4.8
1.1
6.1
Hungary
81%
12%
4%
3%
3.7
5.6
5.9
Romania
84%
4%
12%
0%
2.3
12.0
5.4
Lithuania
50%
37%
7%
6%
3.3
5.9
3.9
Latvia
60%
0%
36%
4%
2.7
5.2
3.2
World Mean [14]
87%
6%
6%
1%
2.4
5.6
4.0
Data are sorted by descending order of CO2 emissions per capita;
Units of CO2/GDP are metric tons of CO2 per US$10,000 of GDP;
Units of CO2/Capita are metric tons of CO2 per capita per annum;
Units of Power/Capita are kilowatts per capita. Power refers to Total Primary Energy Supply;
There are small rounding errors in some of the percentages;
Data are for 2004 except where noted;
Data are for “developed regions” as defined by the UN Statistics Division;
CO2/capita data are from ref [1];
CO2/GDP data are calculated from refs [2] and [3];
Power/Capita data are from ref [4];
Energy mix data for EU nations are from ref [5];
Remaining energy mix data are from refs [6] to [14], and are noted in the table.
What do these numbers show?
Four developed countries have emissions intensities below 2 tonnes-CO2 per US$10,000 of GDP. They are France, Iceland, Sweden and Switzerland. These are working models of low-emissions, high-income industrialised economies. How do they do it?
Iceland has the highest per capita energy consumption of any country (it’s the cold winters), so one might expect it to have high carbon emissions, yet it is among the very lowest carbon emitters – how? It’s thanks to its very large geothermal and hydroelectric resources, sufficient for its small population. Iceland’s energy mix has the highest fraction of renewables of any country (geothermal 56.0%, hydroelectric 16.6%) [12], giving it the lowest emissions intensity of any “developed region” nation that doesn’t use nuclear power.
France has the highest nuclear fraction at 40% – about 80% of its electricity is nuclear-fuelled – and Sweden is close behind with 37% nuclear energy. Sweden’s mix of hydroelectric and nuclear power, and France’s heavy use of nuclear power, give both of them very low emissions by population and by GDP.
The best performer of all by emissions intensity is Switzerland.
Switzerland has by far the lowest CO2 emissions per unit GDP of any developed nation, and the third lowest emissions/GDP ratio of any nation at all (only Chad and Cambodia have lower emissions intensities). This isn’t just down to its very high GDP; Switzerland also has the lowest per capita CO2 emissions of the western economies (four eastern European nations have lower per capita emissions).
How does Switzerland do it? It is a very wealthy nation, which certainly explains one side of the emissions-to-GDP ratio, but that doesn’t explain the emissions per capita ratio, which is also among the very lowest. Its electricity generation is almost entirely hydroelectric and nuclear. These are the two low-carbon energy sources available in quantity. Coal use is confined to two specific industries, foundries and cement factories [15]. These are the factors that combine to deliver Switzerland’s very low emissions figures.
At the other extreme, the U.S. stands out as a poor performer in every respect. It’s not just that its per capita emissions are the second highest of all (after Luxembourg), it also performs poorly on the economic measure of emissions intensity. Also noteworthy are Australia and Ireland, two economies almost entirely reliant on fossil fuels. Ireland has high per capita emissions despite low energy use, while Australia combines a high-carbon energy mix with high energy use to end up with the third highest per capita emissions of all. Given its low population density and natural advantages, it’s an extraordinary position to be in.
External affairs minister S M Krishna told world leaders that India continued to face enormous developmental challenges and poverty eradication remains the nation’s top priority.
“Nearly 200 millions live on less than one dollar a day and nearly 500 millions do not have access to modern sources of energy,” he said.
“Our overriding priority, therefore, has to be eradication of poverty for which we must address our energy poverty and use all sources of energy, including fossil fuels,” he added.
“We need to impose a carbon tax at [Europe’s] borders. I will lead that battle.” – FT.com
Well, would’nt that change the whole scenario. Most of the imports will come from countries like China, India and others who do not have a carbon tax.
This will be interesting. The same is being discussed in Australia but mostly the steel and other industries who want this may get a concession in the tax which in the end defeats the purpose of the emission trading scheme.
India, China will not talk about a carbon tax for a decade atleast.
In Asia, the availability of water has become a key issue that could determine whether the region is characterized by cooperation or interstate and international conflict in the years to come.
Undoubtedly, China holds the key to the above question as it controls the Tibetan plateau. The plateau is home to enormous glaciers and the world’s greatest river systems. These rivers act as a ridge-rope for the world’s two most populous countries, China and India, and also to Bangladesh, Myanmar (Burma), Bhutan, Nepal, Cambodia, Pakistan, Laos, Thailand and Vietnam, which combined are home to 47 percent of the global population.
I received this comment on the previous post on the Indian emissions plan.
Quote: “Wow, for 10 years??? That is ridiculous! They are the second largest country population wise and they set this example? I think there should be some sanctions or something. At least some tariffs. Thanks for the news”. Unquote.
I think this is not ridiculous at all. Why should a poor country like India set an example on emissions when the richest country are doing nothing.
One correlation is for sure from the past. Cheap energy and wealth of a country are connected all else
being equal. Emissions are connected to cheap energy.
The solution is see is not emission caps but cheaper clean energy. Will a emission scheme deliver the incentives or Will it be a pigou tax or will it be government funded private based research.
Whatever way, a solution to cheaper clean energy is the solution to the Emissions problem.
