What does global warming have to do with the price of coal in China?

The Times recently ran a deeply troubling piece on the effects that China’s insatiable hunger for coal will have on pollution levels and climate change for decades to come.

The statistics themselves are harrowing. Over the next 25 years, the increase in CO2 emissions from China alone will surpass by five times the reductions in emissions sought by the Kyoto Protocol. Almost every week, a new Chinese coal-fired plant comes online that is large enough to supply power to all the households in San Diego.

But more troubling is another fact that the article makes clear: China truly needs coal.

Some have described global warming as an example of a perfect problem, meaning that a confluence of factors make it a particularly vexing problem to solve. In the industrialized world, these factors include the long time lag between cause and effect; mismatches between the global scope of the problem and the more limited scope of the institutions charged with addressing the issue; long-term growth in many of the key drivers of the problem; etc.

But China and other developing countries add another dimension to this perfect problem. Cheap power can add to the welfare of impoverished people to such a large degree that providing this power becomes something of a moral imperative. Of course, we also have a moral imperative not to cause irrepable harm to our environment. When these imperatives clash, no obvious solution suggests itself.

Wu Yiebing and his wife, Cao Waiping, used to have very little effect on their environment. But they have tasted the rising standard of living from coal-generated electricity and they are hooked, even as they suffer the vivid effects of the damage their new lifestyle creates.

Years ago, the mountain village where they grew up had electricity for only several hours each evening, when water was let out of a nearby dam to turn a small turbine. They lived in a mud hut, farmed by hand from dawn to dusk on hillside terraces too small for tractors, and ate almost nothing but rice on an income of $25 a month.

Today, they live here in Hanjing, a small town in central China where Mr. Wu earns nearly $200 a month. He operates a large electric drill 600 feet underground in a coal mine, digging out the fuel that has powered his own family’s advancement. He and his wife have a stereo, a refrigerator, a television, an electric fan, a phone and light bulbs, paying just $2.50 a month for all the electricity they can burn from a nearby coal-fired power plant.

Because Chinese power plants have no money to invest in clean technology, Japan has started giving China millions of dollars to install filtration systems. The systems won’t help with carbon emissions, but they will reduce the sulfur pollution that is causing acid rain in Japan and other downwind countries.

These payments are, in effect, an offset – for sulfur rather than carbon, but the idea is the same. In the long run, transfers of payments through a market for carbon reduction will almost certainly be part of any strategy for emissions reductions in China.