CHINA’S DRAMATIC URBANIZATION
Meeting climate targets challenging as higher energy use per capita lies ahead
LONDON China’s urbanization over the past four decades has been described as the largest human migration in history, with several hundred million people relocating from rural villages to towns, cities and supercities.
Rural-urban migration has helped support an enormous increase in labour productivity, household incomes and energy use, transforming the country into the world’s largest energy consumer.
But urbanization is a worldwide phenomenon. The proportion of the world’s population living in rural areas has fallen from two-thirds at the start of the 1960s to around 45 per cent last year, according to World Bank data.
Without exception, high-income economies have high levels of urbanization: urban living, rising energy use and rising incomes go together.
Urbanization absorbs surplus labour from the countryside, facilitating the reorganization of farms into larger and more efficient units, increasing productivity in rural areas.
It also provides bigger markets and permits the development of increasingly complex manufacturing and service industries, raising urban productivity still further.
China is perhaps halfway along the path of urbanization marked out earlier by the advanced economies.
Queued up behind China, other fast-growing developing countries with large populations are embarking on the same urbanization process.
As they pursue the same path toward greater urbanization, their per capita energy consumption is set to increase substantially.
China’s rural population peaked at 860 million in 1995 and had fallen to 577 million by 2017, according to the country’s National Bureau of Statistics (NBS). Over the same period, the urban population had grown from 352 million to 813 million, average annual growth of 3.9 per cent.
The country has been slowly urbanizing since the middle of the 20th century, with a marked acceleration after 1978 with the onset of reform and opening.
Nonetheless, 41 per cent of the population were still living in rural areas in 2017, more than double the percentage in the United States (17 per cent) or the United Kingdom (17 per cent).
China’s current level of urbanization is roughly the same as the United States in 1950, according to census data.
China’s urbanization will likely continue for the next few decades, assuming the country follows the same trajectory as every one of the advanced economies in the Organization for Economic Cooperation and Development (OECD).
And the process will continue driving a significant increase in energy consumption per capita as more and more households reach middle-class status.
In every recent historical case, the process of urbanization and economic development has been accompanied by an enormous increase in the consumption of energy per capita.
Greater population density in urban centres can lower some forms of energy consumption, for example by increasing the use of public transport and promoting the use of smaller, more compact dwellings.
But greater density and urbanization also tends to raise productivity, which in turn increases incomes and total demand for energy services, including heating, cooling, lighting, power and transportation.
In every case, greater urbanization and the associated increase in the number of middle-class households with more discretionary income has helped fuel a big net increase in energy use.
Greater population density and market concentration also facilitates the provision of an increasing variety of energy-intensive goods and services, which tends to raise total energy consumption.
China’s per capita energy consumption has grown at an average annual rate of more than four per cent since the launch of reform and opening in 1978.
Energy consumption increased by more than 1,000 kilograms of coal equivalent per capita per year for each migrant from a rural to an urban area between 2000 and 2007, according to researchers at Lanzhou University.
The country ’s continued urbanization will likely drive significant increases in per capita energy consumption for the next several decades.
India’s rural population has fallen from 80 per cent of the total in the 1960s but is still as high as 67 per cent — far behind China and roughly where the United States was in the 1880s.
Rural populations are also still relatively high across the Middle East and North Africa (35 per cent), sub-saharan Africa (60 per cent) and Central Asia (40-70 per cent), the rest of South Asia (60-80 per cent) and ASEAN (25-65 per cent).
If the experience of China and the OECD countries is a guide, these regions and countries are all likely to continue urbanizing well beyond the middle of the 21st century.
The enormous implied increase in energy consumption in developing countries is why most projections show increased use from all sources through the middle of the century.
Rising energy demand will likely support an increase in consumption from both fossil fuel and clean energy sources, requiring substantial investment to meet demand, and making CO2 emission targets very challenging.