Quitting coal ain’t easy: China’s heating crisis

Business & Technology

The government’s ill-timed campaign to restrict coal use as winter approached continues to backfire. This week, authorities were forced to order a four-month closure of big chemical plants in western China to ensure sufficient natural gas to provide heat for freezing homes and schools, reports the New York Times (paywall), while local officials in Beijing backtracked on their coal ban.

  • Chemical firms outside China are also taking a hit: Germany’s BASF, which makes 5 percent of a chemical used to make spandex, said it had no choice but to break contracts from its Chongqing factory. “Spandex will be tight,” an industry executive with a taste for puns told the Financial Times (paywall).
  • A top-down planning approach, miscalculations of demand, poor infrastructure for the transition, and price caps that don’t encourage energy companies to invest in more gas production are some of the broader problems in China’s push for cleaner sources of energy.
  • China should be thinking about market-based reforms such as carbon taxes, while working to improve infrastructure for alternative energies. A more transparent policy-making process would also help,” says economist Christopher Balding.