It wasn't sheer coincidence that last year marked two pivotal events in the world's vehicle industry. In 2009, China became the largest car market in the world, while in the same year there were four million fewer vehicles on the road in the United States. In a world where the supply of economically viable oil has peaked, or is, at best, growing marginally, driving has suddenly become a zero-sum game.
That means that if millions of new drivers are about to get on the road in China, then somehow millions of other drivers will have to get off somewhere else. Last year, that's exactly what happened in America for the first time since World War II. And unless Boone Pickens is miraculously able to convert the American vehicle stock to natural gas-powered engines, some 40 million other vehicles in the US will similarly be taking the exit lane over the next decade. But more on that later.
That's not news to the auto companies. General Motors is busily expanding its production capacity in China, thanks to bailouts from American and Canadian taxpayers. Nor is it news to Canadian tar patch producers, who are quickly recognizing that China, with one tenth the per-capita oil consumption of the US, will be the real market for the billions of barrels of oil they hope to extract. And belatedly, even the International Energy Agency (IEA), long fixated on shrinking oil demand in its own member OECD countries, has finally recognized what carbon emissions have been saying for the last three years: that China is the world's largest consumer of energy.
And that energy, for the most part, is carbon-based. China may lead the world in energy from renewable sources such as solar and wind, but it's good ol' fashioned King Coal that's powering that country's industrial revolution, just as it powered the Industrial Revolutions centuries ago in the west. China may still only consume half the oil America does, but it's long since passed the US when it comes to coal consumption, which provides China with 80 per cent of its power. Unless abated by cuts elsewhere, the planned expansion of coal-fired generating plants in China and India will almost double world coal consumption over the next two decades.
As with oil, the more coal China burns, the less coal North America can use. If world carbon emissions are to be capped, or even if global emissions growth is to be slowed, there must be an offsetting decarbonization of economies elsewhere. And that means coal plants must be shut down in places like North America if new plants are built in China.
Not only is China the world's largest consumer of energy, but the more carbon-based fuel it burns to power its economic growth, the more our economies will have to make do with burning less.
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