China’s incoming leaders will have to “drastically change” policies on energy, automobiles, environment and public transport to reduce air pollution to a safe level, according to Deutsche Bank AG.
Delegates to the National People’s Congress, which opens its annual session on March 5, and its main political advisory body are expected to urge the nation’s new leaders to adopt anti-pollution policies, Jun Ma, chief economist at Deutsche Bank, said in a report today. The government should consider policies that will reduce coal usage and automobile demand, and “massively” increase investment in clean energy, subways and railways, Ma said.
China needs “big bang measures to fight air pollution,” Ma said in the report. “The public is now demanding immediate and material government actions to improve air quality.”
Pollution in water, air and soil have sparked criticism online and in state media of the government’s management of the environment after concentrations of PM2.5, fine particles that pose the greatest health risk, surged to a record of 993 in Beijing on Jan. 12. The level at Tiananmen Square dropped to 3 at 11 a.m., compared to an average of 39 the past 24 hours, according to the Beijing government.
The World Health Organization recommends 24-hour exposure to PM2.5 of no higher than 25.
China should reduce average annual coal consumption growth by half from the 4 percent yearly rate forecast for 2013 to 2017, and cut coal demand by 22 percent from 2017 to 2030, Deutsche Bank said. It called for a reduction of coal-related emissions by about 70 percent in the next 18 years and lower emissions per car by more than 80 percent.
The brokerage also recommended increasing the length of railways and subways by 60 percent and four-fold respectively, from 2013 to 2020 and further increase by 60 percent and 230 percent from 2020 to 2030.
Kunlun Energy Co. (135) and Beijing Enterprises Holdings Ltd. (392) are among companies that may gain if China raises its gas consumption, while demand for wind and hydro power may boost stocks including Xinjiang Goldwind Science & Technology Co. (2208) and China Longyuan Power Group Corp. (916) An increase in rail and subway investment will also benefit China Railway Group Ltd. (601390) and CSR Corp. (601766), according to Ma.
Calls for a cleaner environment have spread as delegates prepare to meet at the Great Hall of the People next week. Officials including Li Keqiang, set to become premier, have asked for patience as authorities work to reduce pollution.
Exposure to PM2.5 contributed to 8,572 premature deaths in Beijing, Shanghai, Guangzhou and Xi’an in 2012, according to estimates by Greenpeace and Peking University’s School of Public Health. Coal burning is the main source of pollution, accounting for 19 percent, while vehicle emissions contribute 6 percent, according to the report.
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