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Sean Gallagher Photography

It was a bad week for those who live in Beijing and have to breathe the Chinese capital's air. On Tuesday, a thick grey carpet of pollution - euphemistically described by the government here as "fog" - settled over the southern edge of the city, sending residents scrambling for filter masks and forcing the closing of a major highway as visibility dropped to just a few opaque metres.

The following day, flights in and out of the capital were delayed for hours as another toxic shroud descended over the main airport.

Days like these are all too ordinary in Beijing, one of the most polluted cities in the country that leads the world in emissions of carbon dioxide and other greenhouse gases. But the city of Baoding, an hour's journey by high-speed rail south of the capital, stands as proof that China's government does indeed grasp the scale of its problem and aims to change its carbon-intensive ways.

The same blanket of smog hung this week over this city of 600,000 people that a few years ago was just another smoke-belching stop in heavily industrialized Hebei province. Its coal-powered factories produced automobiles, machinery and textiles. A nearby lake became so polluted that its fish began dying by the thousands.

After the lake debacle, city officials came to a pair of critical and far-sighted realizations. The first was that cleaning up after an environmental disaster was prohibitively expensive. The second was that there was money to be made, lots of it, in green energy.

Mayor Yu Qun closed hundreds of factories that he held responsible for polluting the lake. By 2003, the city's application to establish a green-energy research and manufacturing centre was approved by the central government.

Six years later, Baoding has become China's "Electricity Valley." It stands at the centre of a green-energy push that may hold the key to this country's - and arguably, the world's - efforts to combat climate change.

Consciously modelled on California's Silicon Valley, the industrial park outside Baoding produces solar panels for export across Europe and the United States, as well as wind turbines that fill vast power-generating fields in China's interior.

Many of the city's street and traffic-control lights are solar-powered, as are some neighbourhoods, collectively saving about 230,000 kilowatt-hours of energy a year. According to one measure, Baoding recently became the world's first "carbon-positive" city, meaning the emission reductions created by the technologies produced here now exceed the city's own carbon emissions.

On top of all that, the green shift has created thousands of high-tech, decent-paying jobs in Baoding, which has the highest growth rate of any city in Hebei province. "Baoding gives other Chinese cities another example of how to create GDP growth and jobs. It says that instead of dirty, labour-intensive industries, there is another option," said Yang Fuqiang, director of the climate program at the Beijing office of the World Wildlife Fund.

It's a model other cities in China hope to replicate. By applying some of the same advantages that have made China the world's factory in other industries - economies of scale and cheap labour - Baoding-based companies such as Yingli Group and Baoding Tianwei have rapidly made themselves into global players in the solar- and wind-energy markets. As it throws its enormous weight into becoming a green-energy giant, China could leave Europe and North America far behind.

China already makes one-third of all solar cells produced worldwide, six times the amount made in the United States. The country is on pace to build 100 gigawatts worth of wind turbines in the next decade, an effort that would single-handedly double the global wind-power capacity.

One unexpected advantage in the climate-change fight is China's one-party, authoritarian style of government. While U.S. President Barack Obama is still fighting a political war with the Senate and Congress about the importance of climate-change initiatives, Beijing has made lowering "carbon intensity" - the amount of carbon used per unit of production - a national priority, with President Hu Jintao and Premier Wen Jiabao both supporting new targets that would see cuts of 40 to 45 per cent by 2020.

Announced ahead of next week's Copenhagen conference on climate change, the targets were hailed inside China as the utmost a still-poor and developing nation could do. If achieved, the lower carbon intensity would see China develop in a cleaner fashion than North America and Europe did when they went through their own rapid economic expansion. At current growth rates of 8 per cent a year, however, China could meet its intensity target and still see emissions - which already account for 23 per cent of the global total - double over the next two decades.

While the West has been bailing out financial institutions, China's government set aside large chunks of its own $600-billion stimulus package for renewable energy. A program known as "Golden Sun" uses stimulus money to subsidize half the cost, sometimes more, of solar-power generation and transmission facilities.

"I don't dare say that China is the leader in this [green-energy]movement, but both the government and ordinary citizens have strong enthusiasm for this," said Ma Xuelu, an economist who has been one of the architects of Electricity Valley.

"Some people, until today, are not very clear about [the climate-change problem]" Mr. Ma said as he walked through one of the seven massive Yingli Group factories outside Baoding that produce solar panels for export. "But all of us accepted the fact that we won't have a way out unless we develop green industries. We had no choice but to become a low-carbon city."

The fact that Baoding is already considered "carbon-positive" is a testament to the often-fuzzy math by which emissions reductions are calculated under the Kyoto treaty. For all the changes of the past few years - and for all the clean energy created elsewhere by its solar panels and wind turbines - the city is still a badly polluted place where smokestacks from old factories pump black stuff into the sky just blocks from the high-tech Electricity Valley.

But Baoding has set something in motion. While coal still accounts for 80 per cent of China's electricity production, the government has said it wants at least 15 per cent of its energy to come from renewable sources by 2020.

"As the largest developing country and the largest emitter of greenhouse gases, we are aware of the challenges. China will try with all its means. That is very much assured," Pan

Jiahua, a member of China's negotiating team for the Copenhagen talks, said in an interview.

In a country of 1.3 billion people with enormous economic and environmental challenges, Baoding represented only a very small start, he said. "But it represents the future."

Mark MacKinnon is The Globe and Mail's Beijing correspondent.

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