As the world’s largest greenhouse gas emitter accounting for approximately 27% of global GHG emissions (excluding LULUCF), China’s actions both at home and abroad have an enormous impact on global greenhouse gas (GHG) emissions. China’s 2030 Paris Agreement Nationally Determined Contribution (NDC) is however rated “Highly Insufficient”. The country's current domestic policies however are headed in a slightly better direction towards an "Insufficient" rating, indicating a significant potential for the country to increase its NDC level of ambition.
In the last few years there had been hopeful signs that China's CO2 emissions were flattening. However, discouragingly, increased fossil fuel consumption drove an estimated 2.3% increase in Chinese CO2 emissions in 2018 and 4% in the first half of 2019, marking a third year of growth after emissions had appeared to level out between 2014 and 2016. Exacerbating this deteriorating picture is the fact that China started construction of 28 GW of new coal-fired power capacity in 2018 after lifting a previous construction ban, bringing its total coal capacity under construction to 245 GW. China’s recent increased coal consumption and development is inconsistent with the Paris Agreement, under which 1.5˚C compatible pathways for non-OECD Asia coal power generation would need to be reduced 63% by 2030 [below 2010 levels], leading to a phase-out by 2037. China’s emissions, like the rest of the world’s, need to peak imminently, and then decline rapidly.
In addition to its domestic actions, China’s actions abroad will also have an important impact on future global greenhouse gas emissions, and China is financing and building both fossil-fuel and renewables infrastructure worldwide. Of all coal plants under development outside of China, one quarter, or 102 GW of capacity, have committed to or proposed funding from Chinese financial institutions and companies. That’s roughly double Germany’s current coal capacity. China is not alone in supporting coal development outside its borders as countries such as Australia, Japan and South Korea are also very active.
Almost paradoxically China is simultaneously the world’s largest consumer of coal and the largest developer of renewable energy – so the choice it makes, domestically and abroad, between the technology of the past versus the renewable future will have a lasting effect on the world’s ability to limit warming to 1.5˚C.
With its current policies, China’s greenhouse gas emissions are projected to rise until at least 2030, although the rate of increase is projected to slow towards the end of the 2020s. Under optimistic renewables growth assumptions, energy-related CO2 emissions could level off over the next few years, but these emissions continue to grow in our upper-bound scenario. Consequently, China is on track to overachieve its 2030 NDC targets based on its current policies. If one were to recalculate its NDC based on current policies, China’s target of a 20% share of renewable energy in total primary energy demand in 2030 would be increased to a minimum of 23%, and its carbon intensity target would be strengthened from 60-65% below 2005 levels to approximately 68%. Therefore, in updating its NDC, China will need to go beyond this level in order to achieve a significant progression in scaling up its climate action.
China’s next step could be to submit a strengthened NDC to the Paris Agreement by 2020, something it has indicated it intends to do, which would set a positive example for others to follow. In a bilateral meeting between France and China in November 2019, Chinese President Xi Jingping signed a pact recommitting to achieving the goals of the Paris Agreement, which hopefully is a positive signal in this direction (for details on China’s NDC, see “pledges and targets” section).
China has policies in place to reach the targets set in its NDC. If reached, they would result in GHG emission levels of roughly 13.7–18.4 GtCO2e/yr in 2030. The NDC carbon intensity targets on their own would lead to 2030 emission levels of 14.5–18.4 GtCO2e/yr. As the intensity targets are likely to be reached automatically if the peaking and non-fossil targets are achieved, and our rating is based on achieving all NDC targets, we do not address the intensity targets separately here. (China’s intensity target on its own would also result in a “Highly insufficient” rating.)
However, this range also implies that China’s NDC and its national actions are not yet consistent with limiting warming to below 2°C, let alone 1.5°C, unless other countries make much deeper reductions and comparably greater effort than China. We therefore rate the emission levels estimated for 2030 resulting from the most ambitious aspects of the NDC as “Highly insufficient.”
Our analysis shows that China will achieve both its 2020 and 2030 pledges. Current policy projections show that total greenhouse gas emissions will rise to between 13.7 and 14.7 GtCO2e/yr in 2030. Under the most optimistic assumptions, the share of non-fossil fuels in China’s primary energy supply grows to 29% in 2030; under more pessimistic assumptions, the country’s share of non-fossil fuels grows to 23%. CO2 emissions continue to rise in both cases, albeit with low growth rates in the optimistic scenario. Total CO2 emissions reach between 11.0 and 12.0 GtCO2/yr in 2030.
China is implementing significant policies in multiple sectors to address climate change, and also aiming to restrict coal consumption. China’s 13th Five-Year Plan (covering the period 2016-2020) stipulates a maximum 58% share of coal in national energy consumption by 2020, among other energy related targets. China is implementing an emissions trading system, with the first trades expected in 2020, and has also announced a mandatory renewable energy certificate scheme that sets targets for renewable energy for each province individually.
However, the Chinese government abruptly suspended approvals for subsidies on solar projects in 2018 and issued new policies to reduce solar and wind subsidies in 2019. The government has also lifted a two-year ban on new coal-fired power plant construction.
China’s NDC acknowledged the critical role of non-CO2 GHG emissions (CH4, N2O, HFCs etc.) Under current policy projections, 19-20% of China’s GHG emissions in 2030 will be non-CO2 emissions. Since 2015, China’s government has implemented or announced a series of policy actions to phase out non-CO2 emissions.
Over 1.25 million electric vehicles were sold in China in 2018—a 2018 market share of 4.2%—achieving an aim of the transport component of the formerly named “Made in China 2025” policy initiative two years early. China has both subsidies and tax exemptions that apply to new energy vehicles, which are expected to make up 10% of annual sales in 2019 and 12% in 2020, although these subsidies will end in 2020.
China’s government has been actively reducing the fuel intensity of road transport, with a new fuel standard implemented for light duty trucks in 2018, and planned standards coming into effect for passenger vehicles in 2020 and heavy-duty vehicles in 2021.