On 30 June 2015, China submitted its Intended Nationally Determined Contribution (INDC), including the target to peak CO2 emissions by 2030 at the latest, lower the carbon intensity of GDP by 60% to 65% below 2005 levels by 2030, increase the share of non-fossil energy carriers of the total primary energy supply to around 20% by that time, and increase its forest stock volume by 4.5 billion cubic metres, compared to 2005 levels.
The emission levels estimated for 2025 and 2030 resulting from all aspects of the INDC, except the carbon intensity target, we rate medium. However, the emissions resulting from the 2030 carbon intensity targets if taken in isolation are significantly higher and would be rated as “Inadequate.” Based on our analysis, the weak INDC carbon intensity targets, if taken literally, would only be reached at the expense of important national policies and actions, including in relation to reduced air pollution. This appears unlikely in our judgment. Consequently we give a hybrid rating " Medium with inadequate carbon intensity targets”.
This means China’s INDC (and its national actions) are not consistent with limiting warming to below 2°C unless other countries make much deeper reductions and comparably greater effort than China.
Setting aside the carbon intensity target, China’s INDC’s actions and non-fossil energy target lead to GHG emission levels of around 13.6 GtCO2e in 2030 and to an improvement of carbon intensity of 70%. The INDC carbon intensity target, if dominating other elements of the INDC, national policies and actions, would lead to much higher 2030 emission levels of 15- 16.9 GtCO2e.
China is implementing significant policies to address climate change, most recently aiming to restrict coal consumption. The CAT assesses that under a scenario with currently implemented policies, Chinese CO2 emissions are likely to peak around 2025, or shortly after, partly due to important restrictions on coal consumption in the period from now until 2020, as well as other polices.
However, total GHG emissions are likely to continue increasing until 2030, as China has not yet implemented sufficient policies addressing non-CO2 GHG emissions (methane, nitrous oxide, HFCs etc.). This indicates a need for further action in this area, and it is encouraging that the INDC acknowledges that addressing these gases is important. Only a few specific actions are proposed and these are difficult to quantify at this stage, although in general they are likely to reduce emissions below the levels indicated above.
An issue of significant concern, with Chinese emissions still far from a 2°C pathway in 2030, is the time span of the INDC commitment. As with other countries, the 2030 time-frame could effectively lock-in warming above 2°C based on the current levels of ambition. The opportunity is there now for China to set INDC targets for 2025 and to help create a dynamic agreement in Paris rather than lock-in an inadequate emissions pathway for fifteen years. Binding goals for 2030 could be set by 2020.
Our analysis shows that China will achieve both its 2020 pledge and its 2030 plans. The announcement that China will peak its CO2 emissions will have a significant impact on global CO2 emissions in the period after 2030, as most projections foresee increasing emissions for decades after that. As the target consists of changes in the energy mix, additional energy efficiency measures reducing the absolute energy use could decrease emissions even further.
For the post 2020 period, China submitted its INDC on 30th June 2015. It includes a number of elements:
China’s INDC also includes a comprehensive list of actions to achieve its 2020 and 2030 targets. A large number of the policies have already been implemented.
The INDC submission follows an earlier announcement in November 2014, which included the first two elements above (Xinhua News Agency, 2014).
New elements include the carbon intensity target, the increase in forest stock and measures to limit or reduce non-CO2 greenhouse gas emissions. The carbon intensity target raises significant problems analytically, as it appears to be inconsistent with the earlier targets and with national policies measures and actions projected through to 2030.
For China’s November 2014 announcement, we analysed the effects of all the policies and measures in place - including the non-fossil target for 2020 and 2030. To do this, we assumed the share of different fossil fuel energy carriers (coal, oil and gas) developed under the current policy projections that include implemented policies. The non fossil fuel component of primary energy assumed the 20% target for 2030. CO2 emissions from other sectors, cement and industry, were assumed to follow present policies. This resulted in CO2 emissions peaking between 2025 and 2030, with absolute emission levels of 13.6 GtCO2e excl. LULUCF in 2030. The INDC lists a large number of these implemented policies as actions to achieve the post-2020 goals and targets.
A new element in the INDC – the target for a reduction in the economy’s carbon intensity of 60% to 65% below 2005 levels by 2030 - leads to absolute emission levels of 15-16.9 GtCO2e in 2030 excl. LULUCF with the assumed GDP growth rates. As a consequence, China’s implemented national actions appear much more ambitious than the 2030 target for carbon intensity. We find there is a gap of 1.6 to 3.3 GtCO2e between what China is already implementing, and its INDC carbon intensity target for 2030. If China were to improve its carbon intensity target to a 70% reduction by 2030 from 2005 levels, this would close this gap and limit GHG emissions to 13.6 GtCO2e in 2030 in 2030, all other assumptions remaining the same.
The timing of the peaking of CO2 emissions around 2025, or shortly after, is confirmed by the recent report by Green and Stern (2015) based on a detailed analysis of fossil fuels and cement projections. The CAT calculations do not support the peaking of total GHG emissions by 2025 predicted in this report. Green and Stern assume that the peak of all GHG emissions will follow the CO2 peak. However, as we show below, this may not be the case without further policies.
Based on projections from US EPA, (2012), these non CO2 GHG emissions will continue to grow. This growth will determine the absolute level of total GHG emissions in 2030, and the continuing upward trend points to a need for further policies. China has started to implement some of the actions on non-CO2 emissions indicated in the INDC (see section on current policies), but those are not yet concrete enough to include them to be fully quantitatively in our assessment.
Our briefing from December 2014 details the method we used to determine the peak (Climate Action Tracker, 2014).
How can the apparent discrepancy between the effects of all the INDC goals (except carbon intensity) and the national policies and measures and the carbon intensity target in the INDC for 2030 be explained?
These considerations show that it is extremely difficult to reconcile the INDC carbon intensity goals for 2030 with all other aspects of China’s national policies and actions, as well as the other goals in the INDC.
We also look at the target to increase the forest stock, under limited data availability: Under a number of assumptions , the increase in forest stock by 4.5 billion m3 by 2030 from 2005 levels translates into an additional sink of about 430 MtCO2/year on average over the period from 2005 to 2030. In comparison, the sink was historically around 400 MtCO2/year.
China does not specify whether emissions from forests are included in the carbon intensity target.
China’s 2020 pledge consists of three elements:
We used information from China’s second national communication to quantify this pledge. China presents emissions scenarios for business as usual (excluding all policies implemented after 2005), for current policies, and for enhanced policies. Since the enhanced policies scenario leads to a 45% reduction of CO2 emissions intensity, we interpret it as the “pledge scenario.” In that scenario, combustion-related CO2 emissions are 9.9 GtCO2e in 2020 (The People’s Republic of China, 2012). According to our assessment, including non-energy emissions, this translates to an emissions level of 13.2 GtCO2e by 2030 (excl. LULUCF).
The 2020 pledge has large uncertainties associated with its quantification. In general, the resulting emissions level of the intensity pledge depends critically on future GDP growth. The non-energy related emissions are highly uncertain and not covered by the pledge. In previous years, the CAT had estimated higher emissions from China’s cement industry, and thus we had a higher estimate for the pledge (see description of assumptions at the bottom of this page).
Is China is doing its “fair share” towards global efforts to reduce emissions to levels that would hold global warming below 2°C?
The emission levels estimated for 2025 and 2030 resulting from all aspects of the INDC, except carbon intensity, are in line with effort sharing approaches that focus on historic responsibility and capability and need. Approaches that are more stringent, requiring deeper action for China, focus on equality and capability/costs. Taken together, these emissions are at the upper end of the medium range for China in 2025 and 2030.
However, as discussed above, the 2030 carbon intensity targets stated in the INDC would result in significantly higher emissions that would be rated as “Inadequate.” Our analysis shows that these intensity targets would only be reached at the expense of the INDC goal of peaking CO2 emissions by 2030 or earlier, and at the expense of important national policies and actions, including policies targeting air pollution. In our judgment, this would be unlikely.
A small improvement in the intensity target from a reduction of 60 to 65% to 70-75% by 2030 compared to 2005 levels would unambiguously improve the overall assessment. Our analysis shows that the target of a 60 to 65% reduction in carbon intensity by 2030 need to be considered as "at least" goals.
As a consequence of this situation the Climate Action Tracker is reluctant to assign a rating of “inadequate” to China’s INDC, but nor can we assign an unambiguous “medium.” Our reluctance to assign an “inadequate” rating is due to the weight that we give to the visible climate policies and actions being undertaken in China, and expressed in our current policy projections, and which are reflected in the INDC in some detail. Unlike many governments, China’s current policy projections embed many climate policy-related actions and goals, and bring the country close to achieving its targets for 2030.
On the other hand, given the INDC is a measure of the overall level of international ambition, the carbon intensity target does not offer as strong a signal as is needed, a signal that would be consistent with China’s own national policies and actions. One plausible explanation is that the carbon intensity target provides a “safety” provision for China, allowing the possibility for higher emissions should its national actions and policies not work out as presently projected.
We therefore recommend a hybrid rating of “Medium with inadequate carbon intensity target.”
China’s 2020 pledge is “Medium” on our scale. The underlying data for the effort sharing ranges considers more approaches than in previous years. Further, China’s emissions have increased significantly in recent years and this change in base level leads to a less stringent assessment.
With currently implemented policies, China will reach a GHG emissions level of between 12.2 and 12.6 GtCO2e in 2020 and 13.8 – 14.4 GtCO2e in 2030. Of these, 8.9 - 9.2 GtCO2e in 2020 and 9.6 – 10.2 GtCO2e are energy-related CO2 emissions. This is an increase in emissions of 22% above 2010 levels by 2020 and 33% - 44% by 2030.
This means, that according to our assessment, China will meet its 2020 pledge but will be substantially above current emissions levels. Compared with previous CAT analyses, the current estimate is somewhat lower due to a change in assumptions on non-energy-related GHG emissions. The Climate Action Tracker results are in a slightly lower range than Zhang et al (2014) as their scenarios do not yet include the most recent, more aggressive measures for reducing coal consumption. Much of the increase in emissions, which we project in spite of the decrease of coal consumption, relates to emissions of gases other than CO2, an area where the CAT finds no relevant policy action.
China has a range of implemented policies in most sectors. Most significant is its commitment to a strong increase of renewable and low carbon energy. Since the Medium and Long Term Development Plan for Renewable Energy from 2007, China has increased its renewable energy capacity plans multiple times. Its INDC notes that installed solar energy capacity has grown 400% since 2005.
In its latest update of the 12th Five Year Plan, China decided to aim for a target of 700 GW of renewable energy capacity in 2020. This target was confirmed by the National Action Plan on Climate Change released in September 2014, which defines a number of actions and targets for 2020 (The People’s Republic of China, 2014). In March 2015, China expressed its willingness for a strong increase of renewable energy, planning to increase solar capacity by 17.8 GW in 2015, instead of its previously planned 15 GW (Bloomberg, 2015a).
Bloomberg New Energy Finance expects an increase of RE capacity of 809 GW between 2010 and 2030 (Bloomberg New Energy Finance, 2013), which would add up to more than 1100 GW in 2030. While the emissions per kWh electricity produced in China were roughly stable from 1990 to 2004 and are still above world average, the country has turned towards a trend of decarbonisation of their energy supply in recent years (IEA 2014b).
A report by the Energy Research Institute illustrates a scenario of a high penetration of renewable energy, reaching a share of more than 50% of electricity generation in 2030. While the research is a scenario analysis and not linked to any policies, the report still shows that renewable energy is seen as an important pillar of energy supply in China and can significantly contribute to a long-term sustainable energy system (Energy Research Institute, 2015).
China’s National Action Plan on Climate Change mentions - in the context of the “reasonable control of the total coal consumption” - a target to increase the share of gas in the total primary energy supply to 10% in 2020. The Energy Development Strategy Action Plan (2014 – 2020) further defines the “reasonable control of the total coal consumption” as limiting coal to a maximum of 4.2 billion tonnes of coal by 2020.
Additionally, in February 2015, the Ministry of Industry and Information Technology (MIIT) and the Finance Ministry released the 2015-2020 action plan on the efficient use of coal, aiming at decreasing coal by 160 million tonnes in the next five years (Xinhua 2015). These actions go beyond the WEO 2014 projections and lead to significant emissions reductions in the CAT assessment of China’s current policies projections. We expect these actions to be important drivers on a pathway towards peaking emissions in China at the latest by 2030, if not earlier. While this is a deviation from most current projections, it reflects most recent developments of at least a short-term decrease in coal consumption in China in 2014: the National Bureau of Statistics of China (NBS) communicated in February that coal consumption in 2014 had declined over 2013 (NBS 2015). To combat air pollution, China is also shutting down coal fired power plants, for example in Beijing, where the last remaining coal fired power plant will be shut down next year, and replaced with gas power plants (Bloomberg 2015b).
Policies to reduce energy consumption support the energy intensity targets in the Five Year Plan. In the industrial sector, the TOP 1000 enterprises programme has proven to lead to effective energy savings in the past and has been extended to 10,000 installations. There is also an increasing number of efficiency standards for appliances, buildings and cars.
In 2013, China published the Air Pollution Control Action Plan (Government of China, 2013) that, besides other measures, bans construction of new coal-fired power plants in various coastal provinces in order to decrease air pollution. The effect on emissions will likely be small, as the regions with major extension plans for coal-fired power plants are not touched by the regulation (Ailun Yang and Ryna Yiyun, 2013). Eventually, the impact on emissions will be dependent on the energy source used to replace the plants affected by the regulation.
In 2014 and 2015, China has also started to tackle non-CO2 emissions, most notably HFC emissions. NDRC is investing in demonstration projects for the controlled disposal of HFCs in industry. Further, it is setting up a reporting and monitoring instrument for f-gases for industrial companies (ESCO Committee of China Energy Conversation Association 2015). The INDC document also states targeted reductions of HCFC22 production of 35% by 2020 and 67.5% by 2025 below 2010 levels, and also refers to controlling HFC23, which is largely a by product of HCFC-22 production. According to our initial assessment, this could lead to reductions of HFC23 of 230 MtCO2e in 2020 and 300 MtCO2e in 2025. As there is no clear regulation yet that assures implementation of these targets, we have not included these reductions in the current policy projections. However, they are an important stepping stone towards tackling this sector (EIA 2015).
Updates in most recent statistics
In February 2015, the National Bureau of Statistics of China (NBS) communicated that consumption of coal had fallen by 2.9% in 2014 from 2013 levels, while total energy consumption increased by 2.2% to 4.25 billion tonnes of coal equivalent (tce) (NBS 2015). This communication was accompanied by an update of the statistical methodology, which corrects energy consumption levels upwards.
Using the recent communication, 2013 energy consumption can be calculated backwards as 4.16 billion tce, while the 2014 statistical yearbook – still applying the former methodology – states energy consumption of 3.75 billion tce in 2013. The statistical changes thus reflect an increase of 17% on the 2013 numbers. The methodological update is to be applied to all historic values, and will affect previous energy statistics and emissions inventories.
The Climate Action Tracker analysis relies mostly on the IEA Energy Balances and the World Energy Outlook for its data around China’s energy-related emissions. The level of energy consumption was already higher in IEA data before the update of Chinese statistics. The adjustments in Chinese statistics bring the values of IEA and NBS closer together. Energy-related emissions reported by the IEA for the years 1994 and 2005 are very similar to the values reported in the national emissions inventories, based on the previous method for underlying energy data. Updated inventories are not yet available.
As the effect of the correction on past data is still unclear, the CAT does not yet include the reported drop of coal from 2013 to 2014 in its analysis. However, the most recent policies, aiming at reducing coal by 2020, are included in our scenarios and lead to significantly lower emissions projections than in previous years.
In September 2015, the NBS published revised energy statistics for the period 2000 to 2012. The revision reportedly solves a number of technical issues: most importantly, previously unallocated coal demand now being attributed to final consumption in industry (IEA 2015b). However, in the newest IEA publication of CO2 emissions from fuel combustion (IEA 2015c), these updated energy balances have only been taken along from 2011 onwards, resulting in a discontinuity in the emissions time series between 2010 and 2011. Thus, the CAT still uses the previous (2014) IEA data on emissions from fuel combustion instead of the newest 2015 data, to prevent using an inconsistent time series. We note here that this data is to be replaced in a future CAT update, once revised energy and emissions data are available starting from 2000.
As China only makes available two inventory years which do not have the same scope and are thus not directly comparable, we use a combination of international data sources for energy related emissions (IEA 2014a) and non-energy emissions (EDGAR 4.2 (EC/JRC/PBL, 2011), CDIAC (Boden, 2013)), and inventory data for LULUCF to determine historic emissions until 2010. For the projections, we used the enhanced policy scenario from the second National Communication until 2020, which leads to 45% improvement of emission intensity for energy related emissions. After 2020 we use growth rates of the World Energy Outlook 2015 (IEA 2015a). We add projections from US EPA (2012) for non-CO2 emissions. For CO2 process emissions, we use growth rates from the non-OECD region from the IEA’s Energy Technology Perspectives report (IEA 2014b).
The estimate of the post-2020 contribution reflects China’s announcement to peak emissions no later than 2030, decrease carbon intensity by 60% to 65% below 2005, and aim at a share on non-fossil fuels of 20% in 2030. We consider four options to quantify emission trajectories: calculate absolute emissions from the targeted intensity and projected GDP, the share of non-fossil fuels, peak emissions in 2030 and peak emissions in 2025. For the non-fossil target, we start from the current policy scenario of the WEO2015 and add the effect of recently-adopted policies including the cap on coal and the target for gas of at least 10% and a share of 20% non-fossil fuels (excl. biomass).
For the calculation of the intensity target, we use historic data from China’s Statistical Yearbook and GDP projections from WEO2015 and IMF.
To illustrate potential peaking scenarios, we assume the growth rate of emissions linearly approaches zero in the respective years. Assuming that the minimum non-fossil share and the latest possible peaking (in 2030) are consistent, we adapt the starting growth rate in 2020 so that the absolute total emission level matches the calculated level resulting from the non-fossil fuel target.
Current policy projections
For projections of energy-related CO2 emissions, we use projections from the World Energy Outlook 2014 (IEA 2014c). We adjust the renewable energy capacity based on the Bloomberg New Energy Finance report (Bloomberg New Energy Finance, 2013), and the share of gas and the cap on coal according to the National Action Plan on Climate Change (The People’s Republic of China, 2014). For non-CO2 emissions, we use growth rates from US EPA’s anthropogenic GHG emissions projections applied to the historic data, and use growth rates from the IEA’s Energy Technology Perspectives report (IEA, 2010) for CO2 process emissions. Later ETPs do not provide country level data.
We further reduce emissions based on calculations on the impact of the increased renewable energy capacity targets, the target of 10% gas and the targeted decrease in coal consumption. The cap resulting from the coal decrease uses the Chinese data from the recent communication as a starting point: the 160 million tonnes of coal are converted to Mtoe and subtracted from the 2014 value (assuming that coal consumption in 2015 will be at a similar level as in 2014).
To quantify emission reductions from the fuel switch, we consider two options. The first is to maintain the total primary energy fix as in the current policy scenario of the WEO2015 (we assume that the targets are met by shifting from coal towards gas and renewables). The second option is to allow for some flexibility in the total primary energy demand and assume that the coal cap is reached through increasing efficiency additionally to the already expected development of renewable energy and gas.
When shifting away from coal, it is likely that China will shut down older combustion facilities first. This changes the efficiency of the combustion of the primary energy and thus the emissions factor. To reflect this, we use an average of the WEO2015 current policy scenario and the new policy scenario for our calculations.
To calculate the reductions of HFC23, we assume that a direct correlation exists between HCFC22 and HFC23 in China. This means that we apply the reduction targets for HCFC22 from the INDC to HFC23 emissions in 2010. We compare this against the reference case – the current policy projections – where we use a historic value from the EDGAR emissions base for HFC23 and growth rates from US EPA for HCFC22, again assuming a linear correlation to HFC23.
We use Global Warming Potentials from the Second Assessment Report of the IPCC.
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 Assuming a wood stock density of about 1.3 tonnes of biomass per cubic metre with a 50% carbon content.