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China on Tuesday finally submitted its INDC to the UN, but is the world’s biggest greenhouse gas emitter ambitious enough?
In the INDC, China pledged to cut its carbon intensity by 60-65% from 2005 levels by 2030, an increase of the 2020 40-45% target. It also promised to peak its carbon emissions by the end of that decade.
But with coal consumption plummeting and emissions growth already showing signs of slowing down, is China’s UN pledge in line with what could and should be expected from it? And what does China need to do to achieve the target? We asked a group of China climate policy experts and will publish responses as they come in.
China’s new climate pledge will require significant efforts, while setting the stage for even more ambitious reductions. A 60 percent cut in carbon intensity below 2005 levels is equivalent to the 51 percent reduction below 2010 levels that Bloomberg New Energy Finance calculates China would need in order to peak its carbon emissions around 2030. BNEF ranks this effort as among the most ambitious carbon intensity targets of any country, on a par with the INDCs of developed countries.
China’s non-fossil target will require it to add the equivalent of the entire U.S. power generating fleet in zero-carbon emission capacity in 15 years. Although some called it unrealistic, this target seems within reach, given the level of China’s investment in renewable energy (nearly $90 billion last year) and the breakneck growth of wind and solar power installed capacity (now 90 and 400 times 2005 levels, respectively).
Yet China can do even more, according to its National Center for Climate Change Strategy and International Cooperation (NCSC). NCSC released two new studies on June 10 as part of the China Coal Cap Project coordinated by NRDC, detailing how China’s CO2 emissions could peak by 2025 if it enacts a strong national coal cap policy that controls coal consumption to four billion tons by 2020 and 3.5 billion tons by 2030. A national coal cap could also save nearly 50,000 lives and $6.2 billion every year by 2020.
China’s leadership knows that protecting the climate is essential in order to safeguard public health and ensure the security of its own food, water and energy supplies. China is already on track this year to post the largest annual CO2 cut ever seen in any country. We expect that China will continue to accelerate its efforts as it begins to reap the benefits of its low-carbon transition.
China’s INDC submission continues in the direction of its first announcement of possible post-2020 targets in November. It also lists a comprehensive set of measures aimed at achieving its targets, measures that cover all relevant areas, including targets for renewable energy capacity, support for energy efficiency and the reduction of non-CO2 greenhouse gases. Some of these actions are already being implemented.
Another key additional element is the reduction of carbon intensity, which was not included in the November announcement. Emission levels resulting from this element seem to be higher than what China will achieve with the climate policies it has already implemented, and the target to increase the share of non-fossil energy to 20% by 2030, according to the Climate Action Tracker. Under that scenario, carbon intensity would decrease by 70% below 2005 levels.
We have seen before that China only sets targets that it can be sure of achieving. It is thus not only interesting to ask how ambitious is the target itself, but also how ambitious is the action happening on the ground. With the INDC, China continues its efforts of recent years towards ambitious and effective climate policy making. By implementing the measures listed in the document, China’s CO2 emissions will likely peak well before 2030.
China’s target of 20% non-fossil energy by 2030 is also encouraging. Coupled with the peak in emissions, and the policies already in place, China is speeding up decarbonisation of its economy, but is not yet on a pathway consistent with holding warming below 2˚C.
It is also interesting to see that China is increasingly engaging with other governments in the communication of its climate targets, making both recent announcements in conjunction with, first, the US and, this week, the EU. This contributes to a solid ground for conversations in the negotiations of the new agreement.
China’s 2030 emissions pledge is not at all a weak target. A 65% reduction in carbon dioxide emissions intensity means that the annual decarbonisation rate would continue at around 4 per cent per year throughout the 2020s. Such a pace has been rarely achieved anywhere over a significant period of time, and in no significant economy consistently over a 25 year period. The long list of actions listed in China’s INDC is in line with the magnitude of the task, and indicate the resolve of China’s government.
If China exactly achieved the targeted 45% reduction at 2020 and went on to a 65% reduction at 2030, this would increase the rate of annual improvement in emissions intensity from 3.9% until 2020 to 4.4% in the 2020s. However, China is likely to outperform the 2020 target, given that average annual reductions from 2005 to 2014 were 4.5%, as reported by China’s government.
Nevertheless, China could do better. Energy productivity greatly lags that of advanced economies. Enormous improvements can be made by further improving technical efficiency, and by accelerating the shift in economic structure away from energy intensive industries. And China will continue to shift its energy mix towards less coal and more renewables, nuclear and gas, reducing the emissions intensity of every unit of energy used.
The arithmetic of peaking emissions is simple: annual decarbonisation rates need to exceed annual GDP growth rates. GDP growth has begun to slow, and it is quite possible that will slow to 5% or less per year in the 2020s. If decarbonisation rates can be maintained in a slower-growth environment, this means carbon dioxide emissions will begin to fall. The key question is not so much the precise timing of the peak, but the level of emissions that China will have reached then. The pledges in the INDC do not give a clear idea about this, because it depends on China’s GDP growth rates over the coming decade.
After a long wait China’s INDC has finally arrived, making countries representing well over half of global emissions committed to post-2020 actions. To make sense of it, it is important to understand both the politics and the substance.
On the political side, China is becoming much more active on climate diplomacy than in the Copenhagen years. This is featured by continuous and extensive high level political attention attached to the issue. The US-China summit between Presidents Obama and Xi last November and the official visit of Premier Li to Paris this week are the best cases in point. The former gave the world a preview of China’s post-2020 climate plan by introducing emission peaking, a non-fossil fuel target, and a new way of interpreting CBDR; while the latter completed the picture by adding the essential element of the carbon intensity reduction target (too bad this could not be done in the EU-China summit happened just a day before). With this information, climate “hikers” will know both when they will be able to see the “Mount Everest” (around 2030 or earlier) and the overall contour of the mountain they are climbing.
On the substance side, the “mountain”, as outlined by the carbon intensity reduction target of 60-65%, is simply too high. Taken together with the offers that have already been presented, the collective ambition simply won’t ensure the globe staying below 2 degrees. More importantly, the carbon intensity target seems to overlook the tremendous energy transition that is taking place at home. Coal consumption, which contributes close to 80% of China’s energy-related CO2 emissions, dropped last year by 2.9%. Instead of growing further, China’s CO2 emissions actually declined by 1.5% in 2014. Combined with a continued bearish coal market so far this year, strong renewable energy growth, and the urgent need to clean up China’s air, a systematic emission stabilisation and decline will come much earlier than previously thought. It’s unfortunate therefore that China missed a valuable opportunity to back its increasing political commitment with ambitious emission reduction leadership.
What all this leaves for Paris is a daunting gap between pledged action and what is required by climate science. In the run up to Paris, countries need urgently to consider how their actions will be reviewed and work out a way to gradually ramp up ambition. China will no doubt have an important role in this exercise.
China’s newly released Intended Nationally Determined Contribution (INDC) represents an important contribution by this major economy and carbon emitter to the UN process to come to an agreement on global climate targets. China’s INDC is in line with the country’s prior policy announcements and commitments for carbon reduction, which are significant, especially China’s agreement under the recent China-U.S. accord signed in November 2014.
As a developing country that relies heavily on coal, China has a larger decarbonization challenge than any other large country, and has been facing that challenge head-on with regional coal caps, aggressive renewable energy development, and pilot projects to test carbon trading. China’s coal-cap goals have the potential to dramatically reduce carbon emissions and drive economic growth. A 4.2 billion ton coal cap by 2020 would reduce coal’s share in China’s primary energy mix to 62%, which is tightly in line with the nation’s commitment to peak carbon by 2030. If firmly implemented, the cap will naturally accelerate clean development, creating jobs in renewable energy, energy efficiency products and services, and education. A recent study by the Natural Resources Defense Council (NRDC) estimated that the cap would result in an overall net gain in power sector jobs and create over 5.6 million direct and indirect jobs in the solar and wind industries alone by 2050. On a national level, China is also working to reduce conventional and greenhouse gas emissions through tightening environmental laws, strengthening enforcement and increasing penalties.
We believe that placing a price on carbon, such as through the national carbon trading system, would be the most significant factor in helping China meet its own carbon emission targets. Other market-oriented reforms in the power sector could also help the country’s grid absorb more renewable energy (currently, a large amount of energy generated by wind, solar and hydro is wasted) and prioritize investments in end-use energy efficiency. Financial sector policies are also critical to speeding the transition away from energy-intensive heavy manufacturing industries and towards consumer-oriented and services-oriented industries.
China’s INDC reflects its evolving stance towards a global climate regime by going beyond the requirements for developing countries of the UNFCCC and its Kyoto Protocol. China’s official pledge and its intended contribution under the new Paris agreement is the first among major developing emitters. Its intention of integrating a carbon constraint for its social and economic development will contribute to both global climate security and China’s domestic ecological progress, which is corner stoned by its planned revolutionary energy transition.
Besides, from the target announced by President Xi (together with his US counterpart President Obama) to concrete implementation of a roadmap as endorsed by the whole administration, the INDC preparation process also reflects high-level leadership consensus and national level mobilization. Hence, we expect China will use the relevant legislation process to make the targets legally binding and enforceable, and hopefully over-deliver.
One thing we do notice is China’s softening tone on the South-South Cooperation on Climate Change Fund, which China announced last September during the UN Climate Summit. We believe that China will continue to strengthen cooperation for mutual benefits among developing countries, and this Fund could also generate new and additional resources to support the least developed and vulnerable countries. Developed countries need to fulfill their commitment of mobilizing $100 billion annually by 2020 for developing countries to enhance their climate actions. China’s potential financial and technology contributions are voluntary and complementary, and we hope that enhanced finance commitments can be leveraged by developed countries.
Compiled by Stian Reklev. Email us at email@example.com