Asit K. Biswas and Cecilia Tortajada
BUSINESS TIMES | June 4, 2021
But country says it has plans to adopt ‘more vigorous policies and measures’ to achieve its aims.
In his address to the 75th session of the United Nations General Assembly in September 2020, Chinese President Xi Jinping took the world by surprise by declaring that China will “aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060”. To achieve these objectives, China will pursue “more vigorous policies and measures”.
To objective China observers, this commitment should not come as a surprise. It is a logical extension of China’s earlier policies of ‘Made in China 2025’, ‘High Quality Development Model’ and ‘New Infrastructure Plan’, all of which considered future development through the use of low-carbon and advanced technologies in all sectors.
The aim of reaching carbon neutrality by 2060 also fits in very well with the country’s 2049 goal “to build a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious”.
It is worth noting that Mr Xi announced this ambitious goal at the UN General Assembly and thereby indirectly reconfirmed China’s commitment to multilateralism.
Beijing also played by the rules of the Paris climate agreement which stipulates individual and independent national commitments.
China did not ask for any quid pro quo from other developed or developing countries. It alone made this major unilateral and independent commitment on carbon neutrality by 2060.
China’s commitment had swift impacts. Shortly after Mr Xi’s UN statement, both Japan and South Korea announced that they would both become carbon-neutral by 2050.
It will be a challenge for Japan and South Korea to be carbon-neutral by 2050 and also for China before 2060.
ON PATH TO CARBON NEUTRALITY
Even before Mr Xi’s announcement, China had charted a possible path to carbon neutrality. In fact, many of the policies it had formulated earlier were to reduce its carbon footprint progressively and steadily.
Consider the following facts. Sinopec, China’s largest refiner, estimated in December 2020 that China’s demand for oil products will peak in 2025. Coal’s share of China’s energy mix declined from 68 per cent in 2012 to 58 per cent in 2019. Mr Xi categorically stated during the climate conference hosted by President Joe Biden in April that China will strictly control coal-fired electricity generation projects, and strictly limit increases in coal consumption during its 14th Five-Year Plan and phase it down during the 15th Five-Year Plan.
China’s National Energy Administration is asking regional grid companies to increase their purchase of electricity from non-fossil-fuel sources – from 28 per cent in 2020 to 40 per cent by 2030.
In addition, by 2030, China plans to lower its CO2 emissions per unit of GDP by over 65 per cent from 2005 levels, increase its share of non-fossil fuels in primary energy consumption to 25 per cent, and bring total installed capacity of wind and solar power generation to over 1.2 billion kW. It also plans to increase its forest stock by 6 billion cubic metres during the 2005-2030 period.
China has been leading the world in the use of electric vehicles (EVs). In 2020, 1.3 million EVs were sold in China. This represented 41 per cent of the global total. In contrast, the US accounted for only 2.4 per cent of global sales.
Estimated sales of EVs in 2021 is 1.9 million units.
China continues to lead the world in electric two- to three-wheelers and buses. Of the 500,000 electric buses operating in the world in 2019, the majority were in China.
Over the past decade, it has become a leading manufacturer of green technology, including solar panels, wind turbines, and electric vehicles. It currently manufactures over 70 per cent of the world’s solar modules, 69 per cent of lithium batteries and 45 per cent of wind turbines. China has been leading the construction of hydropower dams in the world.
China has also made immense advances in research and development of contemporary issues. The American Academy of Arts and Sciences estimates that China’s R&D expenditure exceeded that of the US for the first time in 2020. During the past two decades China’s R&D expenditure as a percentage of GDP has more than tripled. Primarily through China’s efforts, costs of solar and wind energy all over the world have plummeted.
Continuing technological advances in energy efficiencies in all sectors, steadily declining costs of renewable energy, and strong political efforts, should help the country to reach carbon neutrality before 2060 without hampering its economic progress.
COSTS AND BENEFITS OF CARBON NEUTRALITY
Making the country carbon-neutral will require major restructuring of its current development patterns. Preliminary estimates by Chinese ministries indicate the cost may be around US$14.5 trillion – US$15 trillion. In comparison, the Marshall Plan to rejuvenate Europe after World War II cost US$135 billion in today’s value.
Phasing out coal from the economy is likely to adversely impact China’s coal-producing provinces since it supports employment in some of the poorer provinces. However, by 2018, renewable energy provided 4.1 million jobs, more than fossil fuel extraction industries. Investments in low-carbon energy are now nine times higher than in fossil fuels: it was only 1.1 times as late as 2008. Nearly 90 per cent of new investments in power generation is already going to non-fossil fuel energy.
In 2020, China was importing over 10 million barrels of oil per day. The shift to renewable sources will save China a huge amount of foreign exchange and also enhance its energy security. In a world where geopolitical events can suddenly make continuing oil imports difficult by sudden supply chain disruptions, a steady shift to renewable energy sources makes considerable political and economic sense.
China will have to reduce its oil requirements for the transportation sector. This will require major structural changes. Currently only about 20 per cent of freight moves by train, compared to 50 per cent by road. The country will have to invest heavily in further improving existing urban public transportation and upgrade city planning.
There will also be considerable health and social benefits due to the shift from fossil fuels to renewables. For example, implementation of strong policy measures has significantly reduced annual average particulate matters of 2.5 micron or less between 2015 and 2019. This has resulted in 90,000 fewer premature deaths. Further reductions will have significant health and social benefits.
The latest models forecast that benefits from an aggressive climate change strategy will increase China’s GDP by 2-3 per cent, reduce demands for fossil fuels by 80 per cent, and lower carbon emissions by 75-80 per cent by 2050. Such developments will improve its global competitiveness, make its economy more resilient, and significantly add to its global soft power. If and when all these are achieved, China would become a leading technology provider on decarbonisation to the world.
Asit K Biswas is a distinguished visiting professor at University of Glasgow, UK, and director of Water Management International Pte Ltd of Singapore. Cecilia Tortajada is a professor at the School of Interdisciplinary Studies at University of Glasgow.
This article was published by THE BUSINESS TIMES, June 4, 2021.