In a surprise announcement at the UN General Assembly, chairman Xi declared that China will aim to peak CO2 emissions before 2030 and achieve carbon neutrality before 2060 – the earlier pledge was for emissions to peak “around” 2030 with no word of what would happen after. While any increase in ambition is a positive signal, the upcoming five-year plan will be a key test of what the new pledge means in practice.
The one-sentence announcement leaves plenty of space for different readings, the least ambitious being that there’s still another decade of time to build more fossil fuel infrastructure and increase emissions. Conventionally, the expected lifetime of power plants, factories and other assets in China is quite short, so 2060 is very far away.
A more progressive interpretation would be slowing down emissions growth immediately and getting into a clear decline before 2030.
With finishing touches being put on China’s next five-year plan, which will include energy and emissions targets for 2025, and the deadline for upgrading the Paris pledges coming up, my fear was that the next five-year plan gets wrapped up before the commitments are upgraded and then we are stuck with the old commitments for another five years. The other big fear was the emissions peak being followed by a long plateau near the current level.
What we need to see now is this long-term ambition and earlier target date for emissions peak translated into more clean energy and less coal in that five-year plan.
Does a 2060 “vision” matter?
Having a long-term vision only makes sense if it changes what you do now – otherwise you might just as well wait another decade before announcing it. The key challenge and key test is how the vision can be translated into the five-year plan to make tangible progress towards an emissions peak, and take the first step towards a fully decarbonized economy.
Achieving carbon neutrality requires eliminating most fossil fuel use in power generation, heating, industry and transport. This is definitely achievable and if it is made the guiding vision for investment, innovation and policymaking in China that can be a genuine breakthrough. With China having the world’s largest renewable energy industry, investment budget and industrial base, this is eminently achievable.
The plans for new coal power plants are one litmus test on this: permitting has accelerated this year, with a total of 17 gigawatts of new coal-fired capacity approved and 41 gigawatts announced just in the first six months of the year, more than the previous two years combined. The power industry has been calling for hundreds of new coal plants this decade. This would obviously be in direct contradiction with “striving to peak emissions”. Revising these plans would show that the long-term goal is being taken seriously now and not just sugar-coating another decade of increasing emissions.
Business-as-usual?
Highlighting the debates around nearer-term targets, Bloomberg is reporting, based on unnamed sources, that China is mulling “stronger” clean energy goals for the upcoming five-year plan, covering the years 2021 to 2025. The numbers are a 20% non-fossil energy target for 2025 and a target of limiting the share of coal in the total energy mix to 52%.
If the numbers that Bloomberg reported are considered the “strong” option, then there is a long way to go.
China has plenty of scope to upgrade the pledge made under the Paris agreement without really stepping up climate measures. The current non-fossil energy target, in particular, is quite weak, targeting a share of 20% by 2030, while the current share already stood at 15.3% at the end of last year. This target would allow the growth of low-carbon energy to slow down substantially, from about 9% per year in the past four years to less than 5% in the next 10 years – an outcome that hardly anyone is expecting.
A 20% non-fossil energy target by 2025 implies the same growth rate as 2015-2019. Non-fossil energy grew 9%/year from 2015 to 2019, and from 12.1% of total energy to 15.3%. Assuming primary energy consumption growth of 2-3%/year, the 20% target would mean 7-8% growth in non-fossils from 2021 to 2025.
In the same vein, reducing the share of coal in total energy to 52% by 2025 would still allow slow growth in coal consumption, at around 0.5% per year from 2020 to 2025 – the same as 2015-2019. CO2 emissions would continue to increase at maybe 1-2%/year.
Backstopping renewables
The most well-justified positive reactions to the rumors of 2025 targets are related to the development of renewable energy in China. As David Fickling rightly highlights, these targets would give a strong backstop to renewable energy installations. Because non-fossil energy is almost entirely electricity, a 20% share in all energy means a much higher share on the power sector, around 1/3.
As hydropower and nuclear installations slow down from last decade’s pace, wind and solar investment has to grow substantially just to maintain the growth rate in overall non-fossils. This would ensure targets and policies that support the growth of the industry and put it in a position to start pushing emissions down towards the end of the five-year period.
Furthermore, renewable energy targets do have a tendency of being exceeded by a good margin.
When will emissions peak?
China’s CO2 emissions per capita have already exceeded the world average, and under a continued growth scenario would soon overtake the average of OECD countries, making it clear that further increase is in direct contradiction with the urgency of peaking and declining global emissions – surely any space for emissions increases needs to be reserved for countries that are far below the average.
There’s no question that any non-fossil target in China will involve an impressive amount of investment in absolute terms. Everything in China is big. It’s important not to be taken in by the scale but to assess whether the combination of targets and policies is genuinely making progress towards that emissions peak.
Here is a comparison of the implications of the possible targets given in the Bloomberg News report with recent trends, showing that the rumored targets would not guarantee much progress towards slowing down and peaking CO2:
| 2015-19 growth rate | 2021-25 projected growth rate | |
| Coal consumption | 0.5% | 0.7% |
| Non-fossil energy consumption | 9.3% | 7.6% |
| CO2 emissions | 1.7% | 1.2% |
| Coal share of total energy | -1.6% | -1.0% |
| Non-fossil energy sources share of total energy | 0.8% | 0.9% |
Therefore, the rumored targets would leave the door open to a CO2 peak around 2025 but in no way ensure that emissions will go into a decline. They could just as well be leading to a plateau out to 2030.
Breakthrough?
For those of us who have despaired over the rebound in China’s coal use in the past few years, and a new surge in permitting and construction of new coal power plants, it is tempting to see the 2060 carbon neutrality announcement as the turnaround that we’ve been hoping for.
There is some reason for optimism – Chinese government has taken its previous climate commitments seriously, and had little reason to make a major new announcement right now, so I fully expect this to be more than a cheap PR stunt.
A broad announcement by chairman Xi, and one made in front of the world’s assembled heads of state, has the potential to mobilize the resources of the society and re-align the five-year plan targets. If the signal goes out to the bureaucracy that this vision is something to be implemented from now on, it can kick China’s energy transition into high gear. But one can just as easily imagine a future where this target gets relegated into the category of lofty long-term visions to be addressed by the distant successors of current bureaucrats and state-owned company bosses.
In a world where few countries’ emissions targets are aligned with the global goal of limiting climate change, it would be silly to expect China to come out with a substantially improved, specific, measurable and ambitious commitment out of nowhere. But the country is in a bit of a hurry given that final touches are already being put on the 2025 energy targets.
We need to see similar signals from others and maybe then we can hope for a dynamic similar to the one created by the Obama-Xi announcement in the run up to Paris where many countries step up, enhance their targets and see China’s vision articulated in a lot more measurable detail.