Chinese Premier Li Keqiang has declared war on smog, recognizing that years of double-digit GDP growth has seriously damaged the environment, creating a cloud of pollution that can be seen from space, and seriously impacting Chinese citizens’ health.

China Li Keqiang

China will target high-emission vehicles, coal furnaces

“[Pollution is] ‘nature’s red-light warning against the model of inefficient and blind development,’’ Li said today at the National People’s Congress in Beijing, Bloomberg reports. ‘‘Fostering a sound ecological environment is vital for people’s lives and the future of our nation.”

Li specifically mentioned that the government will work to get high-emission cars off the road and reduce the number of coal-fired furnaces in an effort to reduce PM10 and PM2.5 emissions. He also said that clean water regulations are in the works to protect the country’s drinking water.

Li’s announcement that China would impose some form of energy consumption ceiling would have been more shocking in years past, but is actually in line with the government’s goal to cool down GDP growth so that the Chinese economy can gradually absorb large amounts of loose credit and transition from the manufacturing base of recent years to a more service-oriented economy. China has set a 7.5% GDP growth target, which has become a source of controversy between China experts who disagree about whether the government will be able to prevent a hard landing.

Spending on energy-efficient subsidies has dropped

Air pollution has been a growing concern in China for a few years now. Last year China banned the construction of any new coal plants in three of its main industrial regions (though new coal plants continue to be built in other parts of the county), and new regulations have become strict enough to concern some commodity investors.

These stricter policies and some projections that China has hit peak coal naturally have led Citi analysts Timothy Lam and Pierre Lau and others to argue that China will become one of the major drivers of growth in the solar energy sector, but the case may not be as strong as they imagined.

China’s Finance Ministry reported that energy conservation spending fell 9.7% to 180.4 billion yuan ($29.4 billion) because some subsidies promoting energy-efficient devices had been ended. If the Chinese government decides to focus on preventative measures like the ones that Li mentioned in his speech at the expense of subsidizing renewable energy alternatives the growth in Chinese solar energy may not be that rapid.