Will China turn the tide in the world’s fight against climate change?

China’s energy-related CO2 emissions are estimated to have increased by about 150% since 2000…and now make up over 25% of the world’s total.” As the biggest CO2 producer in the world, and with the possibility of even higher emissions in the next decade, what are the real prospects for China to curb its emissions?

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This is a massive challenge for China because huge economic growth means even faster growth in demand for electricity, and 65% of this is from CO2 producing coal-fired power stations. Accounting for 50% of the world’s total coal consumption, Chinese producer subsidies are estimated at $5.6 billion. . Whilst emissions seemed to plateau in 2014, in 2017 emissions were already rising again.

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But China has ambitious plans to reduce its CO2 emissions. In Dec 2017 at the One Planet Summit in Paris it announced a huge ‘Emissions Trading Scheme’ to give financial incentives towards low-carbon industry and power generation. So, how significant is this plan? It has been characterised as “a game changer”, being 150% bigger than the EU scheme when fully in place, possibly as early as 2019. Green NGO, the Environment Defense Fund estimates that it will cover over 15% of the world’s total CO2 emissions. This scheme is designed to have a huge effect on moving foreign and domestic investment towards low-carbon industry and will counteract the coal subsidies.

 

Not all the details of the ETS are yet in place so why should we take these Chinese plans seriously?

Firstly, China is known for its strategic outlook. It has a lower short-term political volatility risk, unlike the liberal west, and can take a much longer-term approach. Secondly, China wants to be a superpower. Given recent terrible levels of pollution, the Chinese ‘Ecological Civilisation Strategy’ was created. China intends to rebrand itself as an inspiring new investment opportunity.

 

Why then is this a big opportunity for addressing climate change?

china installed more than 34 Gigawatts of solar capacity in 2016 (source)

This is excellent news for the global community, as China is trying to claim global leadership in combating climate change, filling the void left by the US. China should meet it’s Paris Accord targets a decade earlier than expected, due to a massive investment in renewables. Although that target still allows for a further rise in Chinese emissions, the addition of this new ETS is likely to bring additional dramatic emissions reductions.

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Proportion of Chinese electricity generation from Wind, Water and Solar (source)

These new official statements of Chinese ambition are critical because China won’t want to lose face. As a bonus, this might eventually prompt rivalry with the US in climate change efforts. This is important because China will still be a major exporter of coal power stations to other developing countries, which it must be persuaded to rethink.

 

Why is Chinese domestic politics so important?

In China, it is the “dog” of domestic politics and regime legitimacy that wags the “tail” of geopolitical strategising.’ The environment is an explosive issue within China. Dramatically worsening pollution in cities is causing severe health and social problems, with 1.1 million air pollution-related deaths in 2015. The rising Chinese urban middle class is demanding action, and this is reinforcing the direction China is taking to rapidly reduce emissions.

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