What's up guys and welcome back to wall street millennial on this channel, we cover everything related to stocks and investing most scientists agree that countries around the world must act quickly to reduce their co2 emissions, to prevent catastrophic consequences of climate change. Over the past few years, china has been at the forefront of the green energy transition, investing more money into renewable energy resources than any other country. They're. Also well ahead of the us in terms of electric vehicles, which already make up 13 of new vehicle sales.

It looked like china was leading the world in green energy, and other countries should follow sue, but this all changed in the fall of 2021 when they were hit with massive energy shortages which forced them to ration their limited electricity. These outages forced factories to shut down and were a massive drain on the chinese economy. These electricity shortages were caused by a lack of coal at china's coal burning power plants, but how's that possible. Wasn't china leading the world in renewable energy? Could they still be dependent on coal as it turns out? Decarbonizing is a lot more difficult than most people originally thought.

In a recent statement, president xi said that china must not pursue decarbonization at the expense of energy and food security or the normal life of ordinary people. The country's green energy policies were too aggressive and they'll have to slow things down to avoid power outages in the future, but for all these billions of dollars of investment, china has to have made significant progress. Reducing emissions right, unfortunately, not china's carbon dioxide emissions are currently at record highs and have increased every one of the past four years. This is despite investing billions in renewable energy and trying to reduce their reliance on coal, and now that she is backing off on their aggressive targets.

China's emissions will probably accelerate even further in this video, we'll look at why china's decarbonization efforts are failing and what it means for the rest of the world. Over the past 20 years, china, rapidly industrialized, mainly driven by manufacturing for the export sector to fuel this expansion, they primarily relied on coal, which was the cheapest and most abundant energy resource they had domestically. While this worked well to power their factories, it created tremendous amounts of air pollution and greenhouse gas emissions. It is estimated that over 1 million people in china die as a result of poor outdoor air quality.

Every year, president xi knew that the current pace of development was unsustainable. So in 2016 he used the opportunity at the paris climate accord to commit to an aggressive plan. They planned for their carbon emissions to peak by 2030 and they will soon become carbon neutral by 2060.. The largest source of china's renewable energy system is hydroelectric power.

They have many large rivers which can provide a constant source of energy, but there's a limited number of rivers and thus a limited number of dams that you can build. If they really want to reduce their reliance on coal, they would have to look at other forms of renewable energy such as wind and solar, so they started investing billions of dollars in renewable energy by 2017 they were the largest investor in renewable energy. By far with 132 billion dollars of investment, this dwarfed the 57 billion dollars from europe in the united states. The government achieved this by providing massive subsidies for the development of wind and solar power plans.

The cheap labor, along with the government incentives, have allowed china to become the dominant player in solar panel manufacturing, currently controlling roughly 80 of the global supply chain. They've also become the single largest producer of wind power in the world. As you can see, the amount of renewable energy in china has exploded with most of the gains coming from hydropower. The percentage of china's total energy consumption coming from green sources has increased from about five percent in 2000 to 14 today and is closing in on the us for this metric coal represented 70 percent of energy consumption in 2000, and this is decreased to just 57.

However, despite the fact that fossil fuels make up a smaller percentage of energy consumption, this is not enough to offset the increase in total energy demand. Over the past 10 years, demand for oil has been steadily increasing, while coal has been about constant natural gas has also increased significantly. The increases in green energy did not decrease the carbon emissions; they just made it, so they increased less than they otherwise would have as societies become richer, they generally tend to consume. More energy people have more money for heating, air conditioning travel and other things of that nature.

Also, the economic progress has been enabled by the manufacturing sector, which is extremely energy intensive. Take the example of cars as a country becomes richer. A larger and larger proportion of the population can afford a car. Currently, there are about 800 cars per thousand people in the us.

China only has about 200 cars per thousand people. That means the total number of automobiles would have to quadruple just to get to the same level of the us. The total number of cars in china has increased at about 15 compound annual rate over the past decade, and there are now more than 250 million cars. China is the largest electric vehicle market in the world, with 13 of their new vehicle sales now electric, but with the average car lasting for about 10 years, it will take a long time before evs make up a significant proportion of the cars on the road.

So, despite the government's focus on evs, the number of internal combustion engine cars on the road in china is still increasing and will likely continue increasing for many years. This is why china's co2 emissions are continuing to rise. Despite the unprecedented efforts the government has made in green energy, the problem with renewable energy is that sometimes the sun is not shining or the wind is not blowing. When energy demand is cyclically high, you can just bring more coal to the coal-fired power plants to increase power output and keep the lights on, but because of china's policies to phase out coal, they have been greatly reducing domestic coal mining in recent years in 2021.

Demand for chinese exports increased beyond expectations, as significant pent-up demand was built up over the course of the pandemic. This increased electricity demand from factories to well above what the grid could handle ultimately leading to the disastrous power outages affecting millions of people. Now, president xi is saying that the country has to back off of its aggressive policies. This likely means that they will slow down on the transition away from coal.

The fact of the matter is that, as developing countries advance, their energy demand skyrockets, it's frankly, unrealistic to expect that they can generate all this new energy from renewable sources alone. China is spending more than 100 billion dollars per year, and even they can't do it. Other countries like india and various countries in africa and south america are far poorer than china. They don't have the funds to invest in substantial green energy, as these countries develop their carbon emissions will invariably go up, there's simply no way around it.

While china is the world's largest emitter of co2, that's just because their population is so big on a per capita basis. The us emits more than double the carbon as china and, more than seven times that as india. In fact, these numbers actually understate the difference in carbon emissions between the developed and developing countries. The vast majority of the goods you buy in the u.s are imported from china or other developing nations.

Much of the reduction in carbon emissions in developed countries is purely the result of shifting manufacturing to lower cost countries. If the rest of the world became as rich as the us overnight, we would see global carbon emissions more than triple, according to the international governmental panel. On climate change, the world will have to reduce its co2 emissions to about 27.5 billion tons by 2030.. Emissions decreased in 2020 purely because of pandemic related lockdowns.

So it makes more sense to compare this to 2019's level of 37 billion tons. That means that we need emissions to decrease by 27 under the old regime, emissions were still increasing, and now china is saying even this old regime is unsustainable. There's not really any obvious solution, regardless of how dire the climate situation is. How are you going to tell developing countries that they're not even allowed to catch up to the us in terms of per capita emissions? The recent power outages in china show the near impossibility of preventing climate change.

It's looking more and more likely that we'll be the last generation to live on this earth without suffering the consequences of man-made climate change. Alright, guys that wraps it up for this video. What do you think about china's plans to decelerate their transition to green energy? Do you think humanity has any chance of solving climate change? Let us know in the comments section below, as always. Thank you so much for watching and we'll see you in the next one wall, street millennial, signing out.