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China: Driving Climate Solutions or Problems
China, as the world's largest greenhouse gas emitter, is at the forefront of global climate discussions with its ambitious pledge of achieving carbon neutrality by 2060. While this bold initiative signals a significant step towards global climate mitigation, it doesn't come without hurdles. With a rapidly growing economy largely dependent on carbon-emitting fossil fuels - especially coal - and an intricate landscape of industrial sectors, infrastructural needs, and regulatory environments, China's journey to carbon neutrality is fraught with challenges.
The nation's progress in decarbonisation is pivotal for worldwide net-zero objectives. Without China's unwavering commitment to climate action, the global goal of capping temperature increases to 2°C, and ideally, 1.5°C as stipulated by the Paris Agreement, remains elusive.
👉 In this article we’ll explore China’s relationship with climate change - from impacts, to policy, to challenges, we’ll assess whether China is part of the climate solution or a problem.
Impacts of climate change on china
Experts warn that China is poised to be among the nations most severely affected by climate change. Beyond facing challenges related to food and water scarcity, the nation confronts rising concerns over increased poverty, widening inequality, and escalating frequency of extreme weather events. Additionally, China is at risk of enduring the most significant economic setbacks globally due to these climatic shifts.
Let's take a closer look at the primary climate change threats currently impacting the country:
Drought
Warmer weather and heatwaves are resulting in problematic periods of drought in China. In some instances this is even causing whole rivers to dry up - including parts of the Yangtze (the third longest river in the world). The impact of these events doesn’t just increase the risk of water scarcity, they also affect hydropower, disrupt shipping, and force companies to suspend operations.
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Water scarcity
Water scarcity is already a problem for China, and climate change will only make this problem worse. Periods of drought and altered patterns of precipitation, combined with infrastructure issues and a heavy demand from a large population make this one of the most concerning climate impacts for the country.
The effects of water scarcity are far-reaching, with implications for population health, challenges for farmers, decreased crop output, and negative impacts on the livelihoods of many people.
Rising sea levels
China’s coastlines are projected to see higher sea levels as a result of global warming. This is a growing problem for the country as the majority of its megacities lie along the coast. Rising sea levels, tropical storms, and storm surges mean that the country's populations and economic activities are under threat.
Heatwaves
As in most parts of the world, China is also suffering from more frequent, longer-lasting, and more intense heat waves. Just this summer (2023) China’s temperature records were shattered, with 5.2 degrees Celsius being registered in the Xinjiang region. This reflects a growing trend in recent years where China has consistently experienced record-breaking heat waves.
It’s estimated that without adaptation China will see heat-related deaths in 27 of its major cities increase by around 50%. Even more concerning is that China’s north plain could be hit with ‘wet bulb temperatures’ - conditions that are so extreme that humans and other animals are unable to survive.
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Nature and biodiversity
China is already experiencing a decline in biodiversity, with some of its large and medium-sized native animals having even been reduced to extinction. The country’s corals are also in poor condition due to bleaching events. These issues will only get worse as global temperatures rise, resulting in a decline in natural habitat and threatening food supplies for the country's creatures.
Flooding
Another common effect of climate change is increasingly intense precipitation and stronger storms. This has made incidences of flooding a much more common occurrence within the country.
Just this September (2023), relentless rain caused deadly flood waters to rise, resulting in over 100 landslides and trapping citizens in their homes.
To truly grasp the magnitude of the challenge that China faces, we must consider the delicate balance between its susceptibility to climate change and its contribution to the very causes of these shifts. China is at the forefront, experiencing firsthand the severe ramifications of global warming, while simultaneously being a primary contributor to the greenhouse gases that exacerbate the crisis.
This dual role places a unique responsibility on China. As the sections below highlight, while the country grapples with mounting environmental threats, it also bears the weight of introspection regarding its significant environmental footprint. This intricate interplay paints a complex picture, urging us to understand both the adversities China faces due to climate change and the country's imperative role in addressing global emissions.
👉 Take a look at our articles to learn more about the impacts of global warming and to learn more about how climate change can affect the economy.
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China’s environmental impact
China has been the world’s largest greenhouse gas emitter since 2006. Every year the country accounts for around a third of the world's greenhouse gas emissions. And given that the country is a growing economy and developing nation, energy consumption is also increasing year on year. Between the period of 2005 to 2019 for example, energy-related emissions in China increased by 80%.
China's impact on global climate change is substantial, and there are multiple reasons for its significant contribution to global emissions. As the world's second most populous country (it was recently surpassed by India) and a rapidly developing nation, China's push to industrialise and elevate the living standards of its vast population has led to increased energy consumption. The country's reliance on coal, a major source of its energy production, is a primary driver of its carbon emissions.
While developed nations went through similar high-emission phases during their own periods of industrialisation, China's scale makes its impact more pronounced on the global stage. Additionally, as China seeks to grow its economy, the demand for energy and resources surges, resulting in a continuous expansion of its carbon footprint. Although efforts are being made to transition to renewable energy sources, the immediate demands of economic growth and development make it a challenging balancing act.
👉 To understand why the Industrial Revolution is responsible for our current climate predicament why not check out our article.
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China’s climate targets and policies
China’s climate change commitments have significantly grown over the last few decades, as has its climate policy and strategy. Their most ambitious target to date came in 2020, when China’s president, Xi Jinping, announced at the UN General Assembly that the country would be pursuing the target of carbon neutrality by 2060.
Alongside this target, Xi Jinping also announced that China would aim to see peak carbon emissions by 2030 and that it would be submitting stronger goals under the Paris Agreement. These targets were incorporated into China’s Nationally Determined Contributions (NDC) - as required under the Paris Agreement. China submitted its most recent NDC in 2021.
Under the NDC China has also outlined plans to decrease its carbon intensity by 65% compared to 2005 levels, and to reach a goal of 1,200 GW of installed wind and solar power.
Traditionally, China’s climate change policy was incorporated into its energy consumption and economic development policy. However, from 2010 onwards the country began to formulate specific policies concerning mitigation and adaptation. These are also incorporated into China’s Five-Year Plans (a series of social and economic development initiatives that are initiated by the Chinese Communist Party). This is where we can find the policies to support its ambitions of reaching peak emissions by 2030.
China’s net-zero plans are also being supported by its “Action Plan for Carbon Dioxide Peaking Before 2030” (also referred to as its “1+N” plan), and its “Working Guidance for Carbon Dioxide Peaking and Carbon Neutrality”. The Chinese government has also created a “Leading Small Group” in order to provide coordination between different government departments and local governments on climate change policy.
So how exactly does China intend to achieve its climate targets?
- Installation of solar and wind power generators - China intends to create solar and wind power facilities with a combined capacity of 2 billion kilowatts by 2030;
- Renewable energy increase - 25% of China’s total energy consumption will come from renewable sources by 2030 - the current contribution is almost 15%, which is already double the decade prior;
- Increasing carbon sink capacity - China has stated its intentions to boost forest cover in the country by around 6 billion cubic metres;
- Boost to nuclear power capacity - seven new reactors are under construction across the country;
- Incentivising EVs - in a growing number of cities China is incentivising the use of eclectic vehicles. 2020 alone saw an increase in EV sales of around 11%;
- National emissions trading scheme - China is developing a national emissions trading scheme that will place the onus on polluters to pay for harm to the environment.
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China’s role in global climate action
China's role in the global climate landscape is pivotal, with its actions having profound implications for the world's transition to net-zero emissions and the collective ambition to achieve the Paris Agreement target. Being the largest emitter of greenhouse gases, accounting for almost a third of global emissions in 2020, China's trajectory towards peaking its carbon emissions and its commitment to carbon neutrality by 2060 is central to realising the global temperature objectives.
In recent years China has emerged as a collaborative force in international climate diplomacy. Through its engagement in the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol, as well as its own initiatives like the South–South Climate Cooperation Fund and the Belt and Road Initiative (BRI), China is facilitating global climate cooperation. Furthermore, strategic alliances with powerhouses like the EU and the U.S. solidify China's commitment, even amidst geopolitical tensions, emphasising the gravity and priority given to the climate agenda.
👉 Find out more about the Paris Agreement in this article.
Challenges for China’s climate transition
However, China’s transition to carbon neutrality is not without challenges. It is after all still a developing economy which means that energy demand will continue to rise for the foreseeable future. The issue with this is that China’s current energy mix is heavily reliant on fossil fuels. If we look at China’s 2021 energy mix for example, we can see that 55% of China’s total energy consumption comes from coal (one of the dirtiest of all fossil fuels), 19% comes from petroleum, and 9% from natural gas. This means that 83% of China’s energy supply can be traced back to carbon-emitting fossil fuels. This will make it very difficult for China to pursue continued economic growth while also reducing its carbon emissions.
Yet despite the scale of the challenge, climate experts do believe that it’s possible. The Energy Transitions Commission (a global coalition of energy experts and industry leaders) published a report detailing that it could even be possible for China to reach this goal by 2050.
It is technically and economically possible for China to achieve net-zero emissions by 2050 at a very small economic cost to growth and consumer living standards, and China is well placed to gain technological competitive advantage from the transition to net-zero emissions.
While their climate targets emissions target certainly seem to be feasible, is it realistic? What factors might get in the way of China successfully achieving these goals?
Transformation of infrastructure
Reaching carbon neutrality means that China will need to transition away from fossil fuels and replace its reliance on these energy sources with renewables such as solar and wind. China is already a world leader in wind and solar power, but the country will need to produce fifteen times as much if it wants to replace traditional energy sources. This will require significant levels of investment - estimates suggest that investment in solar energy will need to double and that this needs to be as much as four times as much for wind.
In addition to investment in the actual renewable energy facilities themselves, China will also need to develop a large system to support the renewable energy industry. This will require the development of batteries, pumped-hydro storage, thermal capacity, nuclear power, hydropower, and biomass facilities. And it doesn’t end there! Buildings, industry, and transportation will also need to be transitioned so that they are able to effectively support green energy. The scale of this task cannot be understated.
As it currently stands China’s energy infrastructure is significantly lacking with shortfalls in interconnectivity between regional grids and power supply issues. It hasn't been able to keep pace with China’s growing renewable energy sector and requires urgent investment and updating.
Industrial sector transition
China has a large industrial sector, which is also reliant on long-distance transportation from shipping, aviation, and trucking. The issue with this is therefore two-fold.
Although green transportation alternatives are available, the challenge in China is that the vast distances over which goods are transported often make existing green technologies unsuitable.
The second issue is that its industrial activities are notoriously difficult to transition to renewable alternatives. The methods of production often mean that fossil fuels are the best option. Take steel or cement production for example, these processes require extremely high temperatures, and the best/most efficient fuel for reaching these temperatures is currently coal.
Hydrogen is a possible alternative but the technology is still expensive and hydrogen production faces its own challenges if it’s to be considered as green energy.
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Rust belt transition
Often called the birthplace of Chinese industrialisation, China’s so-called “rust belt” is based in the country’s northeast provinces of Liaoning, Jilin, and Heilongjiang. The region has traditionally been heavily reliant on the steel and coal industries, however in recent decades the regions have suffered from economic stagnation and declining populations.
In efforts to revitalise the region and move away from these heavily emitting industries, the Chinese authorities have announced plans for clean-energy projects in the area, hoping that they can create jobs and prosperity while also contributing to their climate targets.
This all sounds great, however, the situation is not quite so simple. Such significant institutional reform is not straightforward, and existing energy policies stand in the way. What’s more, is that the region is suffering from complex social issues. The areas have faced decline in recent years and significant numbers of younger workers have left in search of better opportunities in larger cities elsewhere. This means that not only is China going to have to retrain workers from the coal and steel industry, but they’re also going to have to entice younger skilled workers to return to the region if they want to grow a renewable energy sector within these provinces.
The Chinese government's announcement of the construction of a renewable energy project in the Liaoning province will be a real test for its plans to create a renewables sector in the northeast of the country. If successful, the 83 billion USD project is planned for completion by 2030 and is expected to generate energy capable of supplying a medium-sized country such as Vietnam.
China’s energy market regulation
Another challenge that China’s leaders will need to face in their efforts to transition the economy to carbon neutrality is the over-regulation of China’s power markets. The current system involves central planning for production, consumption, and price setting and this doesn’t always align with the realities of supply and demand. Bilateral energy contracts between provinces are also better suited for traditional energy sources like coal than renewables, which might prevent renewable energy from being sold between provinces.
According to experts, significant reform is needed to improve the inter-provincial trading system. Thankfully, the Chinese government seems to be aware of this need and has disclosed plans to create a primary national energy market to complement provincial markets.
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Reliance on coal
One of the most significant challenges that China faces when it comes to decarbonisation is its over-reliance on coal as an energy source. According to experts, China’s targets of carbon neutrality realistically necessitate a move away from coal immediately, as opposed to in ten years time.
The Chinese government might have pledged to stop building coal power plants overseas, however domestically it is still approving new coal projects at a rate of around two plants every week - this is simply unsustainable if the country is to have any chance of achieving its climate targets. This concerning growth of the Chinese coal market comes in response to energy security issues.
If this rate of growth continues within the coal sector, China will be unable to reduce its coal-fired capacity by 2030 unless it cancels planned projects or implements the early retirement of existing projects.
Investment and funding
Financial institutions in China face a number of hurdles when it comes to green investment. One of the most significant is that there is a lack of GHG emissions data and carbon accounting tools within the country. This makes it difficult for investment firms to accurately gauge the emissions performance of companies, meaning they have to rely on estimates - which can often be inaccurate.
What’s more is that transition scenarios are often geared towards developed nations, which means that they don’t reflect China’s timelines, or industry and technology development scenarios.
Another notable barrier to green investment and funding is the lack of consistent, transparent, and effective ESG ratings. ESG metrics are not consistently measured and reported on by Chinese companies, however, this is an area that is starting to develop within China, and its central bank is working to promote ESG disclosures, so there is hope that the landscape will change in the near future.
Carbon neutrality does not equate to net zero emissions
A further point to note when it comes to China’s climate targets is that they have committed to “carbon neutrality” by 2060 - this is not the same as net zero emissions. Carbon neutrality covers carbon dioxide emissions, whereas net zero emissions incorporate all greenhouse gas emissions. China’s Long Term Strategy (LTS) for Decarbonisation clarifies that the target covers carbon emissions only.
👉 To learn more about the difference between the terms net zero and carbon neutral check out our article.
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Are the west guilty of outsourcing emissions to China?
Often dubbed "the world's factory," China has become a magnet for global production, drawing businesses with its cost-effective labour, robust industrial infrastructure, relaxed regulations, favourable tax incentives, and competitive currency valuations. Consequently, many Western nations have redirected their manufacturing to China, fuelling its economic growth and boosting its GDP. However, this surge in production has come at an environmental cost, exacerbating China's carbon emissions challenges.
During the early 2000s, the concept of "emissions transfers" gained prominence as large parts of Western manufacturing relocated to Asia, particularly China. This shift saw numerous factories from sectors like electronics, apparel, and furniture close down in the US and other countries, only to reopen in China. As a result, while products manufactured in these new factories were shipped back to the West for consumption, China bore the brunt of the environmental pollution, though it also benefited from job creation.
Post the 2008 financial crisis, this dynamic of emissions outsourcing began to stabilise, even showing signs of a decline. Notably, a vast majority of China's industrial production, including about 87% of its steel and 99% of its cement, is used domestically, suggesting that China's escalating emissions aren't solely attributable to external demand but are significantly driven by domestic growth.
A pivotal debate in international climate negotiations is the responsibility-sharing concerning these outsourced emissions. As per the Paris Climate Agreement, nations are accountable for the emissions generated within their territories. However, the issue arises: Should countries like the US or Europe also shoulder responsibility for the emissions resulting from the production of goods they import? This perspective, although crucial, remains on the fringes of global climate discourse, largely due to the complexities involved in accurately measuring CO2 outsourcing.
How is China progressing against its climate targets?
Climate Action Tracker is “an independent scientific project that tracks government climate action and measures it against the globally agreed Paris Agreement aim of holding warming well below 2°C, and pursuing efforts to limit warming to 1.5°C.” According to their analysis, “China’s emissions under current policies remain sky high with no substantial emissions reduction before the 2030 peaking timeline”.
It outlines that the country’s dependence on fossil fuels is predicted to continue due to energy demands and the Chinese government’s insistence on continuing to rely on fossil fuels while transitioning the energy sector. China still seems to view maximising coal production and oil and gas exploration as crucial to providing the country with energy security.
According to Climate Action Tracker, greenhouse gas emissions in China are expected to peak and plateau by 2025. However, China’s current policies have been deemed to not be strong enough to actually drive down emissions.
This is not to say that China will miss its targets - in fact, it is believed that China will overachieve on some targets. The point is that its targets don’t go far enough.
If China is going to be able to effectively reduce overall emissions and transition to carbon neutrality, the government will need to:
- Reduce energy demand and reliance on fossil fuels;
- Increase the ambition of NDC targets;
- Improve the formulation of climate targets - current targets set an absolute economy-wide peaking target which means that peaking, carbon intensity and energy share targets are relative to economic growth. Effectively this means they can increase emissions while still keeping NDC commitments;
- Accelerate the decarbonisation of industries that release large amounts of greenhouse gases.
Yet it’s not all bad news, China has made commendable progress in some aspects. It is investing significant effort into its renewable installations. In fact, the country is a global leader in terms of investment in renewable energy, energy storage, eclectic transport, and the circular economy.
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Can we reach net zero without China?
To put it simply, the answer to this question is no. The world cannot reach net zero until China does.
The world depends on China transitioning to a low-carbon economy in order to meet global net zero goals. China is the world's largest emitter and accounts for 27% of global carbon dioxide emissions and a third of total greenhouse gas emissions. This is why their success is the world’s success, and we cannot transition effectively without them.
What about Greenly?
At Greenly we can help you to assess your company’s carbon footprint, and then give you the tools you need to cut down on emissions. Why not request a free demo with one of our experts - no obligation or commitment required.
If reading this article has inspired you to consider your company’s own carbon footprint, Greenly can help. Learn more about Greenly’s carbon management platform here.
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