A new report outlines an economically and technologically feasible roadmap to China’s decarbonisation. If it does not materialise, the failings will be purely political.
By Oliver Ward
As the sun sets on the historic Vietnamese city of Hoi An, visitors descend on the riverfront bars and eateries to marvel at the reflection of the city’s yellow-washed buildings and teardrop lights dancing across the water. Patrons chat earnestly over noodle dishes. But few notice the hidden narratives revealed in the dark water line smudges that adorn many of the premises’ walls.
The damp etchings serve as a constant reminder to locals that while the river can dazzle, it can also destroy. In 2017, typhoon Damry brought 1.6 metre floodwaters, damaging more than 120,000 homes, and killing 80.
Last week, Vietnam, Cambodia, Laos, and Thailand saw warnings for another impending disaster. The Mekong River Commission warned governments of countries that make up the Mekong River Basin that from now until January, they could expect severe droughts.
The commission’s Flood and Drought Management Centre in Phnom Penh warned that a shortened wet season would bring an extended drought that could threaten agriculture in the region and prompt water shortages.
Climate change isn’t a forthcoming problem, it is here
The incidents further underscore the realities of climate change. Often referred to in terms of future economic disruption and natural disasters, the impacts of climate change are already visible in the low-lying Mekong Basin.
The Southeast Asia region is among the globe’s most vulnerable to extreme weather conditions. More than 640 million of the region’s population inhabit low lying areas. By the end of the century, the Asian Development Bank (ADB) estimates that Southeast Asia could lose 11% of its gross domestic product (GDP) to the impacts of climate change.
China is the largest global greenhouse gas emitter by a large margin
China is the worst offender for global CO2 emissions. In per capita terms, the country’s CO2 emissions are in line with developed European nations and are far lower than many Middle Eastern countries. However, the size of the population means it is a gargantuan emitter.
Chinese consumers account for 29% of the world’s total CO2 emissions, emitting 9.8 gigatons of carbon dioxide into the atmosphere every year. Any attempt to mitigate the worst impacts of climate change and to keep global warming to manageable levels will have to include China.
China is honouring its commitment to the Paris and Copenhagen agreements
In 2009 at the United Nations Framework Convention on Climate Change (COP15), the Chinese government committed to reducing carbon emissions (from 2005 levels) by 40-45% by 2020. At the COP21 in Paris six years later, it further committed to slashing its carbon intensity, promising to reduce emissions by 60-65% by 2030.
To meet these targets, Beijing devised a carbon trading system for the country’s energy sector which will be fully operational by 2020. The system will incentivise emission reduction by allowing low carbon emitters to sell emission allowances to high emitters. The price per ton of carbon dioxide is set at US$7 and will rise by 3% annually until 2030.
A new report indicates China can become carbon neutral by 2050
A new report from the Energy Transitions Commission and the Rocky Mountain Institute indicates that it is technologically and economically feasible for the Chinese government to achieve net-zero carbon emissions by the middle of the century.
In its roadmap to zero, the report highlights several key sectors which will need to undergo transformation, including transportation, logistics, manufacturing, construction, and energy. Despite the significant industrial overhaul, the report estimates that these transformations would cost the economy less than 0.6% of GDP.
Reducing energy demand will be crucial
Reducing energy demand will be essential for bringing emissions down. The Chinese economy has favourable conditions for doing so.
As the population plateaus, then begins to fall, the demand for steel and cement for use in building construction, which have carbon-intensive manufacturing processes, will drastically fall. The report indicates that by 2050, demand would have fallen to such an extent that recycled scrap steel could meet 60% of total production. Recycled steel meets less than 10% of domestic demand today.
“Electric vehicles (EVs) will soon be economically superior to internal combustion engines,” the report states, “whereas hydrogen fuel cell vehicles (FCEVs) likely will eventually dominate heavy-duty road transport.”
In the freight and shipping industries, where aviation and shipping dominate, biofuels, synthetic fuels, hydrogen and ammonia will eventually replace fossil fuels—once technological advancement and economies of scale align to drive prices down.
Finally, advances in insulation technologies will reduce heat waste in buildings, reducing electrical heating and cooling needs by 75%.
The cumulation of this would be a sharp decrease in the demand for energy. The report estimates that final energy demand would reduce from 88 exajoules (EJ) today, to 64EJ. However, despite a reduction in final energy demand, the increased production of hydrogen and biofuels for transport will require an increase in electricity generated.
This energy demand could be met by a carbon-neutral energy mix
The decarbonisation of electricity generation processes will be essential for achieving a zero-carbon economy by 2050. There are already signs that China is on the road to decoupling energy generation from carbon sources.
The coastal sites already earmarked for nuclear power plants would adequately provide the 230GW of nuclear power necessary for the zero-carbon transition.
But the bulk of China’s energy will have to come from wind and solar sources by 2050 to bring a zero-carbon economy to fruition. The Energy Transitions Commission estimates that China’s wind capacity resources stand at 3,400GW of onshore capacity with an additional 500GW of offshore potential, putting a target of 2,400GW within easy reach.
Additionally, given the abundance of sun, the report estimates only 1% of China’s total landmass would need to be devoted to solar farms to capture the 2,500GW necessary to power China’s net-zero economy.
To absorb abnormal weather patterns and seasonal fluctuations that could impact wind and solar production, the Chinese energy sector will need to expand its energy storage capabilities. Today, China has very limited energy storage capabilities. These would need to meet 510GW of energy storage needs caused by 2050. However, with battery technologies improving, and prices falling, this seasonal backup is an achievable target.
To realise this increase in solar and wind power infrastructure, the pace of investment will need to accelerate. The Energy Transitions Commission estimates that solar investment will need to double per annum, while wind will require three- or four times today’s annual levels.
But this investment is not the financial burden it initially appears. The total level of investment required surmounts to less than 0.4% of China’s total GDP. For a nation that invests over 40% of its GDP, this is a relatively trivial sum. Additionally, as the population decreases, real estate and construction will make up a far smaller slice of this investment, freeing up ample funds to be redirected into the nation’s renewable energy sector.
The 14th five-year plan is an opportunity to kickstart decarbonisation efforts
China’s state-led brand of authoritarianism and low level of public and private political participation means any decarbonisation initiative will need to come from the government. The upcoming 14th five-year plan is an opportunity to implement forward-looking policies to put the country on the road to a zero-carbon economy by 2050.
As renewable energy sources become more competitive, a process that requires grid managers to buy from the cheapest energy sources would allow the market to drive renewable initiatives and funnel more money into the renewable sector.
Expanding the existing carbon pricing system to include the whole economy rather than just the energy sector would also force heavy industries to reduce their emissions and explore zero-carbon avenues for industrial processes. If this policy were to be pursued in conjunction with a tightening of building and recycling regulations, industrial and construction sectors would drastically reduce emissions.
Finally, Beijing must acknowledge that climate change is a transnational issue. Any attempt to decarbonise at home will be undermined by its continued financing of coal projects abroad. China does not currently report emissions generated abroad in its national emissions inventory, despite financing coal-burning energy projects across Asia, Africa and Eastern Europe.
Any obstacles will be political
Just because China is blessed with the technology, resource capabilities, and government structure that lends itself to rapid transformation does not mean the targets are guaranteed. There are obstacles to decarbonisation, but almost all are political.
The trade war with the US has diverted attention from decarbonisation efforts. The nation’s steel industry, the primary target of US President Trump’s tariffs, has seen a loosening of environmental controls. The relaxation of industry restrictions caused a resurgence of smog in the region in 2018.
Jules Kortenhorst, the chief executive officer of the Rocky Mountain Institute, told ASEAN Today, “Both the US-China trade war and the withdrawal from Paris by the current US administration are hindering progress in the transition towards a low carbon economy.”
“We are confident that beyond next year, China and the US can resume their joined leadership of international climate diplomacy and the energy transition,” he added.
“China has demonstrated significant political will in the implementation of its initial commitments under the Paris agreement.” He continued, “China has been at the forefront of many of the key low carbon technologies, such as Solar PF and electric vehicles. By leading the transition to zero-carbon, China will also be able to supply the necessary low carbon technologies and set the example for the rest of the world.”
In a sector where scientific outlooks are almost exclusively doom and gloom, the report makes for optimistic reading. China is by some distance the biggest carbon dioxide emitter, but it is unique in the sense that it possesses the finances, resources, and will to take steps to dramatically reduce its carbon footprint. That said, bringing an end to the trade war and bringing some relief to China’s squeezed steel and construction materials sector will be a precondition for any meaningful transition.