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Northern China suffocates under blanket of hazardous air pollution

Air pollution in northern China including the capital city of Beijing reached hazardous levels for the fourth straight day on Tuesday, highlighting the fallout from resurgent coal production and related demand in the world's second largest economy.

The world's largest coal consumer, Beijing declared a "war on pollution" in 2014, but still faces hurdles in improving air quality after decades of breakneck growth.

"China was making very impressive progress towards cleaner air in 2014 and 2015 after it issued a national air pollution action plan to reduce coal consumption …. But unfortunately over the past nine months, government economic policies shifted toward stimulating some of the heavy industry sectors that are responsible for the heavy pollution in Beijing," said Greenpeace's senior global coal campaigner, Lauri Myllyvirta.

Myllyvirta said the current episode is the worst on record with some 460 million in China exposed to heavy or hazardous pollution from smog-causing coal used in power generation.

By Sunday, 24 cities in northern China had issued "red alerts" for pollution, China's environment ministry said on its website. There were no further updates as of Tuesday in Asia.

Air pollution in China is a thorny social and political issue for the government as three decades of explosive industrial growth have contributed to the problem.

But China is moving to a consumption-led economy and authorities have acted to trim heavy industry overcapacity, including shutting down small coal boilers among other factories. But the loss of jobs and business opportunities has stirred social unrest.

China's coal production fell 10.7 percent from a year ago in the first 10 months of the year, Goldman Sachs noted in a report on Friday, contributing to a price increase of 80 percent as domestic supplies tightened.

The price spike spurred the government to roll back on production curbs temporarily to help steelmakers deal with higher coal prices and also to secure winter power and heating supply. The move led to a 9 percent increase in coal production in November over October, according to official statistics.

"The transition both away from coal and to cleaner coal are both slow processes and also subject to briefer periods of interruption (such as now) which have been put in place to simulate the coal industry ... (as) the price of coal got to unacceptable levels both economically and politically in China," said CEF Holdings chairman and CEO, Warren Gilman.

Barry Huang | CNBC

"Such a vast number of people owe their livelihoods to coal and production of domestic coal (production) was falling too quickly for the government's taste, so they have reversed the policy in the short-term to quickly bring consumption back, so it's having a significant impact on air quality ," he told CNBC's Squawk Box.

Efforts towards cleaner coal—made through improved production processes—are so far modest, he added.

China's environment ministry has put in emergency restrictions to deal with the current rash of air pollution, but some power plants and chemical producers in the region have not scaled back operations to meet the curbs, the ministry said in a post on its website. Some drivers in Beijing have also flouted traffic restrictions.

Current air quality is so bad in some cities that flights have been cancelled and schools closed, local media reported.

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