CHINA IS THE ASTERISK at the end of every conversation about the environment. Fifty years after Chairman Mao's Great Leap Backward, much of the People's Republic is purged of nature, an eroded, beaten landscape of pilfered mountains and exhausted paddies, with dried-up rivers in the north and murderous floods in the south. The same size as the United States but with an additional billion people, China is battered by deforestation, coal mining, pollution, acid rain, and trash dumps, which together have devastated 50 percent of the country's land in the past half-century. Ninety percent of its grasslands are degraded or facing desertification; the country already has seven of the world's ten smoggiest cities; 400,000 deaths a year are linked to air pollution; and there are more than 2,000 reported environmental accidents a year. Pan Yue, the doomsday-slinging deputy minister of Beijing's own State Environmental Protection Administration (SEPA), has predicted an onslaught of 150 million "environmental refugees" in coming decades, and estimated that pollution costs the Chinese economy 8 to 15 percent of its GDP a year.

Now, voracious demand for almost every commodity on earth is turning the Chinese environmental crisis into a global one. America is, of course, still consumption enemy number one. But in the next 25 years, China, which, like all developing countries, is not subject to the Kyoto Protocol, will spew five times as much CO2 as Kyoto is currently projected to save. Together with India, it will account for 70 percent of the world's projected increase in coal consumption. China has already become the second-largest producer of electricity in the world (behind the U.S.), but that is nowhere near enough: Though the Chinese use almost ten times less electricity per capita than Americans, China is adding the equivalent of one Sweden to its electric grid every year, with total energy use expected to triple over the next 25 years. Despite tight mileage restrictions, 1,000 new cars hit the streets every day just in Beijing, and the country could add more than 100 million vehicles to the planet by 2030. With the scale of it all, the exponential growth of its population and middle class, projections made one week are obsolete the next. Five years ago, Beijing ordered a 20 percent reduction in sulfur dioxide emissions; they actually went up 27 percent. The country's water-pollution index rose 3.7 percent in the six months surrounding my visit in February 2006, and last October, the Yellow River actually ran red from contamination.

It's not as if China's government isn't trying. Beijing is desperately struggling to learn from the mistakes of the United States and other developed nations, with leaders like President Hu Jintao often speaking more candidly about global warming than officials in Washington. Since 2003, Premier Wen Jiabao, China's economic leader and the greenest of its technocrats, has pushed the switch to a green GDP that deducts the cost of environmental destruction from calculations of profit and growth. Under this math, the economy expanded just 7 percent last year, not the 10.5 percent on the books.

But electricity has to come from somewhere, and as Chris Nielsen, executive director of Harvard University's China Project, a multidisciplinary study of energy and the environment, puts it, "For now the major options are basically ugly versus uglier versus ugliest." China currently gets 82 percent of its power from "thermal" sources, mostly coal and some 7.4 million barrels of oil a day. (The U.S., by comparison, consumes about 20 million barrels.) Solar and wind power won't go far in the short term—demand is outpacing the spread of the technology so fast that the price of solar is actually rising. And even if China keeps adding nuclear reactors to the nine it already has, as it plans to do, that alone won't satisfy the nation's appetite.

So what's left? Water. China has more hydropower capacity than any nation on earth, but even with 22,000 dams and counting, it has tapped only about 20 percent of its potential. (The U.S., with 6,575 dams, has tapped about 80 percent.) The Chinese are determined on this issue. The Yangtze's notorious Three Gorges Dam was pushed to completion ahead of schedule, despite a massive global attempt to thwart it, and by 2008 will be the world's largest electricity-generation station. Yunnan, with 80 percent of China's total hydro-power capacity, is next.

China confronts a devil's choice: clean, essentially free hydropower that drowns the wild valleys of Yunnan, or massive expansion of its use of oil, nuclear power, and sulfurous coal. Even worse, China could make no choices at all, and simply do both ugly and uglier, strangling its rivers, burning its coal, and lighting nuclear fires across the landscape.

"The road ahead is long and pretty unpleasant," Nielsen says. China could turn itself around, he points out. It would merely require avoiding or relocating the worst of Yunnan's dams; converting hundreds of planned low-tech coal plants into closed-cycle systems that sequester carbon, a controversial technology in itself; and simultaneously transforming this immense country, with its hundreds of millions of impoverished subsistence farmers, into the world's first entirely green, sustainably capitalist Commie supereconomy. And it would have to perform this "socio-political-intellectual-economic miracle," as Nielsen puts it, overnight.