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China: Climate Leader?

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Chinese President Xi Jinping stepped up as climate change leader in 2020, pledging carbon neutrality by 2060 for the world’s largest energy consumer and polluter (EC Oct.2'20). But as 2021 opens, China needs to start unpacking its plans to peak carbon emissions before 2030 and for its longer-term targets, or Xi could rapidly lose his new climate superhero hat to incoming US President Joe Biden, who has put the fight against climate change at the center of his policies. China’s task is massive: To achieve its “green revolution,” the country needs to eliminate or offset emissions of some 10 billion tons of carbon dioxide (CO2) per year by 2060. The country accounts for about a quarter of global energy consumption and roughly 30% of greenhouse gas emissions. China also needs to walk the tight rope of balancing climate pursuits with economic recovery, especially in the wake of Covid-19. For the world’s most populous nation, which on some aspects remains a developing country struggling with rural poverty, the task is all the more delicate. A white paper on “Energy in China’s New Era" released on Dec. 21 said the “primary goal is to ensure energy supply for people’s life and to ensure that the poverty-stricken population have access to electricity,” with “promoting clean and low-carbon energy” further down the priority list. Tellingly, the white paper also notes that “coal remains the basic energy source.” The construction of coal power plants accelerated again in 2020, as provincial governments sought to stimulate their economies with traditional infrastructure projects. While China has largely recovered from the coronavirus outbreak and is set to be the only major economy with positive GDP growth in 2020, at between 1.8%-2.2%, headwinds remain. Most of the world -- in effect China’s export market -- continues to struggle with successive coronavirus waves, while China itself is keeping a close eye on resurgence at home. As such, Beijing is likely to be cautious in its carbon-neutral strategy for 2060, leaving much of the heavy lifting to the latter phases rather than opting for a front-loaded approach. This year marks the start of China’s 14th so-called "five-year period" for 2021-25 and its master plan, set to be unveiled after the annual parliamentary sessions in March, will be pored over for clues of how the country intends to navigate its course to net zero. For starters, China needs to set up more ambitious targets than those in the five years that just ended in 2020, said recent research by the country’s prestigious Tsinghua University (see table). Among other measures, Tsinghua recommends boosting the ratio of “non-fossil fuels” -- renewables and nuclear -- to 20% by 2025, up from the current ratio of just over 15%. The government has so far kept mum over the 2021-25 targets, but in December Xi followed up on vague 2060 carbon-neutrality ambitions with slightly improved, medium-term, 2030 targets. He pledged a cut of “over 65%” in China’s carbon intensity -- or its CO2 emissions per unit of GDP -- from 2005 levels by 2030, an almost imperceptible upgrade on the previous 60%-65% goal. China will also more than double its combined wind and solar generation capacity to over 1,200 gigawatts by 2030, from just under 500 GW currently. This entails adding around 75 GW every year on average, well under the 100 GW-200 GW of annual increments recommended by some Chinese climate experts. Xi also committed to bumping up the ratio of renewables/nuclear to 25% by 2030. US-China Competition Xi’s carbon-neutrality pledge has won Beijing some much-needed goodwill at a time when the coronavirus pandemic, widely believed to have originated in China, and a tough new security law on Hong Kong to suppress dissent, made the country largely unpopular (EC Jun.5'20). It is also expected to be a conversation starter between Beijing and Washington’s new Biden administration. Incoming White House climate envoy John Kerry, a key negotiator behind the 2015 Paris accord, has said that he sees an opening to work with China despite tensions on trade and other topics (EC Dec.25'20). The Biden administration has its own ambitious climate plans, including carbon neutrality by 2050 and carbon-free power by 2035, in which it will be aided by Democratic control of the Senate (related). These could put pressure on Beijing to accelerate its own targets, if it wants to maintain the first-mover advantage gained last year. Cooperation is likely to come hand-in-hand with competition as China and the US both strive to become market leaders in electric vehicles or smart technologies, efforts that could benefit the whole world by bringing costs further down (EC Dec.18'20). If China fails to rapidly move to reduce its coal-related carbon emissions, there is a risk that its carbon pledge will be interpreted as an empty promise, more aimed at extracting concessions on trade or its muscle-flexing in the South China Sea than to fight climate change. Could the US fall for that? Unlikely, as the new administration is expected to conduct targeted negotiations that will not link climate change to the broader US-China relationship, Zack Cooper of the American Enterprise Institute told the Singapore ISEAS-Yusok Institute Regional Outlook Forum on Wednesday. “The climate change issue has been internalized at the public, and official levels," Dong Wang, of Peking University's Institute for Global Cooperation and Understanding, said at the same forum. Biden’s election opens a window of opportunity over the coming year, for a better US-China relationship. “Climate change would be a good start,” Dong added. Kimfeng Wong and Maryelle Demongeot, Singapore Latest Climate Pledges

Topics:
Low-Carbon Policy, Policy and Regulation, Electric Vehicles
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