China announced in November 2014 that it would peak CO2 emissions by 2030 at the latest, and increase the share of non-fossil energy carriers of the total primary energy supply to at least 20% by that time, along with its 2020 pledges. We give this a “Medium” rating. This means it is not yet consistent with limiting warming to below 2°C unless other countries make much deeper reductions and comparably greater effort than China.
The CAT assesses that 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 the other polices. However, total GHG emissions are likely to still be increasing in 2030, as China’s does not yet have policies addressing non-CO2 GHG emissions (methane, nitrous oxide, HFCs etc.). This indicates a need for further action in this area.
China pledged in 2009 to reduce CO2 emissions per unit of GDP by 40-45% on 2005 levels by 2020 and a share of non-fossil energy of 15%.
The absolute level of emissions under both targets depends on the future growth of GDP. China is implementing significant policies, most recently aiming for important restrictions on coal consumption in the period from now until 2020 and, according to our analysis, will achieve its 2020 pledge and its 2030 plans. The announcement that China will peak emissions will have a significant impact on global 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 measures reducing the absolute energy use could decrease emissions even further.
For the post 2020 period, China announced in November 2014 that it aims at peaking CO2 emissions in 2030, or earlier, and at achieving a share of 20% non-fossil energy in the total primary energy supply, also by 2030 (Xinhua News Agency, 2014). Looking only at the non-fossil target, the CAT estimates an absolute emissions level of 13.6 GtCO2e in 2030, which would therefore be the peak level of emissions.
To reflect the effect of peaking CO2 emissions from fossil fuels and industry, our results show a range of two options: the upper end results from peaking of these emissions in 2030. We made the simple assumption that the CO2 emissions growth rate from 2020 to 2030 decreases each year so the CO2 emissions trend is flat in 2030.
We find the 20% non-fossil target does not result in a limit of total GHG emissions to lower than 13.6 GtCO2e in 2030. Alternative scenarios that peak emissions in 2025 (a linear decrease of the emissions growth to zero between 2020 and 2025) and stabilisation at that level do not produce significantly lower emissions in 2030.
Our calculations are based on the GDP growth rate from the IEA World Energy Outlook 2014. As with the 2020 pledge, the announced 2030 plan is not decoupled from economic growth. Different GDP developments could influence the level of emissions in 2030 and the peak year. If we assume that the carbon intensity of energy is determined by the non-fossil target, and it develops linearly between 2020 and 2030, the only way to compensate for GDP growth higher than what is currently projected is through further improvements of energy efficiency (decreasing energy use per unit of GDP), if the same level of remaining emissions and the peaking time were to be reached.
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 more 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 is shown below, this may not be the case without further policies,
Non-CO2 GHG emissions are not part of the pledges and announcements China has made to date and, based on projections from US EPA, (2012), these 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.
Our briefing from December 2014 details the method we used to determine the peak (Climate Action Tracker, 2014).
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). Including non-energy emissions, this translates to an emissions level of 13.2 GtCO2e according to our assessment (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).
In terms of whether China is doing its “fair share” towards global efforts to reduce emissions to a level that would hold global warming below 2?C, we rate China’s initial announcement “medium.” The 2020 pledge is also “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. The 2025 and 2030 emissions levels resulting from the initial announcement are in line with effort sharing approaches that focus on historic responsibility and capability and need. Approaches that are more stringent for China focus on equality and capability/costs.
With currently implemented policies, China will reach an 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.
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 further 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).
The 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 of 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. 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.
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 in 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. 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 emission 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.
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, 2014b) 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 2014 (IEA2014). 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, 2014c).
Post 2020 contribution
The estimate of the post-2020 contribution reflects China’s announcement to peak emissions no later than 2030 and aim at a share on non-fossil fuels of 20% in 2030. We consider three options to quantify emission trajectories: 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 WEO2014 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).
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. 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 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 tons 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 WEO2014 (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 WEO2014 current policy scenario and the new policy scenario for our calculations.
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