The video sensation that could tip balance against coal in China

For the past few days, the online community in China has been abuzz over a 104-minute documentary, Under the Dome, that has galvanised the population and even major investment banks who believe it may just tip the balance against fossil fuels in the world’s biggest polluter.

Under the Dome, a documentary on air pollution produced by Chai Jing, a former CCTV investigative journalist who had already reached celebrity status in China, has been viewed more than 200 million times in its first four days of release.

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It has been widely applauded in the online community, and, most pointedly, drew praise from Chen Jining, the newly appointed Environmental Protection Minister, who thanked the film maker for bringing public attention to China’s chronic pollution issues.

Already, its potential impact is being compared – by investment banking giant Merrill Lynch – to Al Gore’s An Inconvenient Truth, and Rachel Carson’s A Silent Spring for its potential impact on the coal industry. Because of its endorsement by the Chinese government, Under the Dome could be even more powerful.

Indeed, Merrill Lynch said in a note to clients that the film’s impact could spell bad news for coal miners, coal generators, and oil refiners, and it could also cause ripple effects through the Chinese debt markets, even to the point where the Chinese currency might have to be devalued.

The anti-pollution measures Merrill Lynch anticipates as a result of the film “may also cause some collateral damages with financials – more debts from heavy polluters may go bad and also loan growth to these sectors may slow – and potentially pressurize RMB to devalue as domestic cost base rises.” If that sounds dramatic, it simply underscores the systemic risks of unabated fossil fuels. Even the Bank of England is alive to those.

Under the Dome took one year to make, and included many first-hand field trips and interviews with various government officials, industry experts and polluting companies.

According to the BBC, Chai used here own money, around $A180,000, to fund the film, which she decided to make after her infant daughter developed a benign tumour in the womb. Chai blamed the tumour on air pollution.

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In the film, Chai stands in front of an audience in a simple white shirt and jeans, looking at the causes of the country’s noxious air pollution.

Pointedly, Chai says the severe pollution has been caused by compromises on environmental protection caused by the fear of officials of economic slowdown and unemployment from closure of illegally polluting enterprises. “It just doesn’t work to sacrifice employment for the environment,”Chai is told by one government official.

As a result, the film noted, the Environmental Protection Bureau did not have the ability to enforce environmental laws and stop illegal pollution activities, to the point where few if any had been penalised and bad practices had even become industry norms in some cases.

According to the BBC, near the start of the film, Chai interviews a six year old girl in the coal-mining province of Shanxi, one of the most polluted places on earth.

“Have you ever seen stars?” Chai asks. “No,” replies the girl.

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“Have you ever seen a blue sky?” “I have seen a sky that’s a little bit blue,” the girl tells her.

“But have you ever seen white clouds?” “No,” the girl sighs.

It is no accident that the film is now being compared to the work of Carson and Gore.

Carson’s powerful book led to controls on pesticides, the banning of DDT, and to the creation of the US Environmental Protection Agency, which is just now cracking down on coal pollution in the US, despite efforts by the Republicans to curb its powers.

Gore’s film, of course, helped lead to a complete re-assessment of environmental policies, a process that has helped lead to the creation of carbon markets, a global push to renewables, and efforts to address the impacts of climate change.

In China, the support by the government for the film is critical. In his first media conference, Chen stressed the need to enforce the amended Environmental Protection Law (which came into effect 1 Jan 2015), information transparency and more interaction with the public going forward.

“We expect pollution control to be the intensive focus of this government over the next decade,” Deutsche Bank analysts wrote. “We also expect increased efforts to reduce coal consumption and promote alternative energy. This will create more investment opportunities for the leading companies in the environmental related sectors.

China in 2014 reduced the amount of coal-fired generation by 2.9 per cent, which some analysts suggest could signal a peak in coal consumption, air pollution, and presage a peak in carbon emissions sometime soon.

Last year, an agreement on climate change by President Xi Jinping and US President Barack Obama was hailed as a game-breaker for international climate negotiations. China agreed to a peak in emissions before 2030, but most analysts believe it will occur well before then.

Certainly, the film has unleashed a huge national debate in China.

Merrill Lynch, in a note to clients on Wednesday, agreed: “It’s very clear from (the film’s) popularity that the public is fed up with pollution in general, and smogs in particular (see chart below). We suspect that some segments of the government may seize the public anger and push ahead with some meaningful pollution control measures.”

As a result, Merrill Lynch identified coal miners, oil refiners, coal generators, and steel makers among those sectors that could suffer financially if the government responds to the video, and the public outcry and tries to address the key issues raised by the program.

Coal could face further falls in consumption, and could face requirements to be washed; oil refiners could face more stringent fuel standards, steel mills, cement makers and coal fired power stations may face restrictions; and even shippers and trucking companies could face pollution controls.

“On the other hand, tighter air pollution controls may benefit clean fuels, such as gas, solar, wind, and nuclear, environment protection equipment makers (e.g., air purifiers), rail, large heavy truck makers (their less scrupulous competitors are forced out) and services sector broadly.”

Deutsche also took the opportunity to recommend investors look at cleantech stocks, in particular GCL Poly, which supplies silicon to the solar industry, and water companies BEWG and GDI.

Comments

31 responses to “The video sensation that could tip balance against coal in China”

  1. Peter Grant Avatar
    Peter Grant

    Thanks again for the current information Giles. What an interesting development it was barely three decades ago that video players were banned in much of China. Who says good journalism is dead…

  2. Connor Moran Avatar
    Connor Moran

    All parts presently being translated into English.

    1. john Avatar
      john

      Connor please let me know when it is translated.
      Without a doubt if China decides to act there is no messing about with a one party state.
      As outlined earlier I know they cut production of coal and imports by 175 million tonnes just last year, and it is obvious in the thermal coal price.
      Very interesting that the short book The Collapse of Western Civilisation a view from the future paints just such an assurance where China acts because of its command driven structure of government where the west is bogged down in party squabbling and inaction.

      1. Bob_Wallace Avatar
        Bob_Wallace

        Dictatorships are a wonderful way to run a country.

        As long as the dictator is benevolent.

        While democracies can get all bogged down in squabbling at least they can change leaders without a violent overthrow.

        1. john Avatar
          john

          As Churchill said hmm I can get it almost correct ” electing a government is not the best method of democracy but all the other styles are worse”:
          I have the exact words wrong but the meaning correct.

          1. Bob_Wallace Avatar
            Bob_Wallace

            “democ­racy is the worst form of gov­ern­ment, except for all the oth­ers”

            I don’t think he originated those words but was quoting/paraphrasing someone else.

          2. john Avatar
            john

            Exactly mate you got it and my rough is the same.

        2. mike flanagan Avatar
          mike flanagan

          Dictatorships have become meaningless non de plume when the structures of democracy and its free market lead us to epoch cessation of biology on the planet. The Dictatorship of China finds its essence in dialectic materialism, which searches for a human accommodation of the natural processes we depend on and is being proven by atmospheric physics etc. to be our only salvation.
          Perhaps, as Naomi Klein suggests, we should trash the system rather than the planet.

          1. john Avatar
            john

            Yes Naomi Klein does hold some strong ideas in that area
            Yes have read her books and yes I think quoted her latest up above

      2. Petra Liverani Avatar
        Petra Liverani

        The video has been split into parts for subtitling. Parts 1, 2, 3 and 5 at link below. Presumably the other parts (not sure how many in total) will be added in the next few days. These subtitles are slightly Chinglish and there’s an English native speaker doing another translation but the Chinglish ones are fine.

        1. john Avatar
          john

          is this the google one I have been watching it for a few hours and stupidly did not copy link

          1. Petra Liverani Avatar
            Petra Liverani

            If you right-click the video above you can get the url and copy and paste it into your browser address bar. You should probably be able to tell then whether it’s the video you’ve already watched. There’s a few versions on youtube. I’ve found it confusing myself.

  3. Bob_Wallace Avatar
    Bob_Wallace

    I suspect the Chinese government would not have let this report be created, certainly not aired, unless they were ready to start serious work on air pollution.

    The next couple of years are going to be very interesting. Look for a lot of push on EVs and eliminating coal fired boilers. Most urban pollution comes from cars and boilers, not electricity generation.

    This is from an interview with a Chinese official some time back –

    “Today, there are approximately 600,000 industrial boilers in China that still use coal-fired boilers and direct coal firing for heating; most of these are in residential areas in urban centers in north China. Taking Beijing as an example, there are still 44,000 households with coal stoves in the western district within 2nd Ring Road; the impact of urban environmental pollution caused from these coal stoves is direct and severe.”

    “the coal use for power plants in is only 4.13% of the total coal use city-wide. The annual PM10 emissions from coal-fired power plants (including PM2.5 emissions) amount to only 0.005% of total PM10 discharged in the area.”

    “emissions to the air and hazards to human health from the pollutants emitted from running vehicles on city roads are most certainly orders of magnitude higher than the equal quantity of pollutants produced from thermal power plants distant from the city”

    http://cornerstonemag.net/pollution-control-of-coal-fired-power-generation-in-china-an-interview-with-wang-zhixuan/

    1. john Avatar
      john

      Bob you are correct and China is already the largest maker of EV and they are curbing the use of coal in urban boilers for bath houses they are acting.

  4. Marg1 Avatar
    Marg1

    This is so good – I hope China does act very soon and hope those buffoons in Canberra pull their heads out of the sand. I won’t hold my breath.

  5. Dan Buchler Avatar
    Dan Buchler

    Somehow this message need to be received and understood by Tony “coal is good for humanity” Abbott and Barnaby “Without coal Australia would go broke” Joyce!

  6. john Avatar
    john

    There is a complete translation
    It is very quick I tell you Chinese people speak very quickly.
    It is a Google vid

  7. Petra Liverani Avatar
    Petra Liverani

    Assuming this film galvanises everyone into action, I wonder how much will be invested in upgrading fossil fuel pollution standards and how much into bypassing that process and simply switching to renewable energy options. As someone else has commented EVs are racing ahead in China.

    1. john Avatar
      john

      Very true Petra they are making small low distance EV’s and investing heavily in RE as well as restricting import and production of thermal coal.
      This film has visual impact in the west let alone for the home audience where you must remember that one is very conscience of ones standing and this will have a galvanising effect far more than in the west.

    2. Bob_Wallace Avatar
      Bob_Wallace

      China has been replacing inefficient coal plants with supercritical coal plants for a while. At least two years back they had already closed over 9,000 older plants.

      China’s leadership has clearly stated that they intend to stop increases in coal use and then cut coal consumption. Sometime back they said that they planned to hit ‘peak coal’ in 2015. A while later they said that they might not be able to peak in 2015, that it might take until 2017. Given the slowing of previous years and the slight drop in 2014 I suspect they’ve hit ‘plateau coal’. They might bounce around some, even go up a little bit, before they start downward. (Slowing graphed below)

      At the same time China is installing massive amounts of wind and solar (compared to most other countries). Take a look at how rapidly electricity produced by wind turbines has grown in China. The second graph is electricity produced, not nameplate capacity.

      1. David Osmond Avatar
        David Osmond

        Hi Bob, I think you forgot to post the graphs?

        1. Bob_Wallace Avatar
          Bob_Wallace

          They are showing on my screen.

          Did you click on “See more”?

          1. David Osmond Avatar
            David Osmond

            Weird! yes I can see them now. Not sure why I couldn’t before. Cheers 🙂

          2. Bob_Wallace Avatar
            Bob_Wallace

            Sometimes Disqus stumbles. I suspect it might have something with server problems. I’ve had comments show, disappear, and show back up.

  8. Coley Avatar
    Coley

    Bad news for the coal industry but good news for the planet.

  9. Bob Fearn Avatar
    Bob Fearn

    I am a Canadian who used to work in Tanggu, China, about 3 hours SE of Beijing. On my office wall I had a poster of Tahiti with the brilliant blue sky and palm trees. One day my translator, a 25 year old women, said to me, “Don’t you hate it when they do that?” “Do what.” I said. “When they put that phoney blue into pictures.” I tried to explain to her that a clean sky really did look like that. She had never seen this in her entire life and in the end I don’t think she believed me.

  10. Vic Avatar
    Vic

    The problem for China is that with the blue skies comes the loss of climate cooling sulphate emissions, the very same stuff that certain “geoengineers” are planning to pump into the stratosphere to try and cool the planet.

    Seems like we might soon find out for sure just how much China’s sulphates have been affecting temperatures in the region. Sulphate pollution in the US was estimated to have cooled certain areas by around one degree Celsius.

    http://phys.org/news/2012-04-hole-climate-eastern-states.html

  11. Alastair Leith Avatar
    Alastair Leith

    Been waiting for the English subtitles! Thanks Giles. Not if people watch this on YouTube page rather than embedded version on this page the English subtitles are not supered over the ?Mandarin subtitles and are much more legible. And yes, john read quickly 🙂

  12. Petra Liverani Avatar
    Petra Liverani

    Right-click the video, copy the url address and paste into your web browser so you can view it directly from youtube and watch it full screen. Giles, perhaps you could put this link into the article.
    Link to video with English subtitles https://www.youtube.com/watch?v=Rh6NGNfBy8o

  13. Raahul Kumar Avatar
    Raahul Kumar

    I have a fully subtitled translation of the video here

    I wish Chai Jing would make a similar documentary about Bharat, Mumbai is every bit as toxic as Beijing is! We need similar documentaries and strong action, it’s completely inexplicable why only Zhonghuans are willing to do something about air pollution while 1.2 billion people in Bharat just accept lousy air as something natural.

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