China

Critically Insufficient4°C+
World
NDCs with this rating fall well outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would exceed 4°C.
Highly insufficient< 4°C
World
NDCs with this rating fall outside of a country’s “fair share” range and are not at all consistent with holding warming to below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach between 3°C and 4°C.
Insufficient< 3°C
World
NDCs with this rating are in the least stringent part of a country’s “fair share” range and not consistent with holding warming below 2°C let alone with the Paris Agreement’s stronger 1.5°C limit. If all government NDCs were in this range, warming would reach over 2°C and up to 3°C.
2°C Compatible< 2°C
World
NDCs with this rating are consistent with the 2009 Copenhagen 2°C goal and therefore fall within a country’s “fair share” range, but are not fully consistent with the Paris Agreement long term temperature goal. If all government NDCs were in this range, warming could be held below, but not well below, 2°C and still be too high to be consistent with the Paris Agreement 1.5°C limit.
1.5°C Paris Agreement Compatible< 1.5°C
World
This rating indicates that a government’s NDCs in the most stringent part of its “fair share” range: it is consistent with the Paris Agreement’s 1.5°C limit.
Role model<< 1.5°C
World
This rating indicates that a government’s NDC is more ambitious than what is considered a “fair” contribution: it is more than consistent with the Paris Agreement’s 1.5°C limit.

Economy-wide

The CAT expects China’s current policy projections (including COVID-19 impacts) to reach GHG emissions levels (excl. LULUCF) of between 12.4-13.6 GtCO2e/year in 2020 and 12.9–14.7 GtCO2e/year in 2030. This is an increase in total GHG emissions of -3% to +6% above 2015 levels by 2020 and +1% to +15% by 2030. China is still projected to meet both its 2020 pledge and its NDC targets despite increasing medium-term emissions in the upper bound. China’s previous lead climate negotiator, Xie Zhenhua, had also expressed the opinion that China could meet its 2030 peaking targets early, reflecting the conclusions of other studies (Gallagher et al., 2019b; Green & Stern, 2016; H. Wang et al., 2019; Xu et al., 2018), while CAT analysis confirms that China is also likely to safely meet its 2030 carbon intensity target as well.

China’s CO2 emissions are estimated to have risen 2.3% in 2018 and 2.6% in 2019 due to increased fossil fuel combustion and cement production (Grant & Larsen, 2020; Hausfather, 2019; Korsbakken et al., 2019; Myllyvirta, 2019b). The COVID-19 pandemic led to a lockdown of economic activity in China, with carbon-intensive manufacturing, construction, and transportation sectors heavily affected. This led to an emissions drop of approximately 25% for CO2 and over 30% for nitrous oxides and particulate matter in Q1 (ECMWF, 2020; Evans, 2020; NASA, 2020). The CAT further estimates total GHG emissions will rise by 0.8% in 2020 in an optimistic economic recovery scenario and fall by 7.7% in a pessimistic scenario. This is within the range of statistics published by Carbon Monitor, which reports emissions falling by 3.7% between June 2019 and June 2020 (Carbon Monitor, 2020).

In May 2020, during the annual Two Sessions with the National People’s Congress, China’s most important political meeting of the year, Premier Li Keqiang announced the government will drop the national GDP target for the first time since records began in 1990 – a clear lack of faith in the 5 to 6% growth target anticipated at the beginning of the year (The State Council of the People’s Republic of China, 2020). The Premier also hinted at a decrease of the 2020 target on energy consumption per GDP, although he gave no concrete details (Bloomberg News, 2020b). National statistics for Q1 confirmed the economy had contracted by 6.8% (National Bureau of Statistics of China, 2020b). By June 2020, China’s economy was already showing signs of recovery, with the economy growing 3.2% in Q2 from a year earlier, exceeding many economists’ expectations of 2.5%. China’s economy had not failed to grow over a total fiscal year since the 1970s (National Bureau of Statistics of China, 2020a; Reuters, 2020).

Evaluation of China’s COVID-19 economic recovery stimulus strategy in the climate field is mixed. While the government is intentionally staying away from the carbon-intensive recovery packages following the 2008 financial crisis, showing that low-carbon growth is indeed a priority, it is also clear that China will not focus on a green recovery similar to the European Union and South Korea, with only a small proportion of economic stimulus going to green projects (Vivid Economics, 2020).

The Ministry of Finance is expected to issue more than CNY four trillion (USD 565 billion) worth of stimulus in 2020, roughly the same amount of the post-financial crisis despite the economy being twice as large today (Bloomberg News, 2020a). The post-COVID-19 packages are less focused on infrastructure projects including heavy steel and cement production, instead focusing on “neo-infrastructure” including 5G networks, artificial intelligence, and other forms of cutting-tech innovation. However, the expansion of networks and data centres also have serious climate implications for a country whose data centres consume more than 160 TWh of electricity a year while predominantly running on coal (He & Ruiqi, 2020).

High-speed rail construction, public transport, and electric mobility projects, which could displace conventional carbon-intensive modes of transport, are also included in the scope of the stimulus. While on paper the stimulus looks cleaner than expected, there is no explicit large budget earmarked for low-emission projects and little guidance from the government on how provinces and municipalities can use the stimulus. Without this guidance, provinces may continue the concerning 2020 trend that has seen high investment into construction and coal (Gosens & Jotzo, 2020).

China’s national emissions trading system (ETS) is the most significant economy-wide climate policy in the country. The ETS plans to start operating in 2020 and initially applies to the power sector (coal and gas plants) but will expand to seven other sectors in the future, becoming the world’s largest trading system covering one-seventh of global CO2 emissions from fossil-fuel combustion. The policy instrument is aimed at encouraging further development in slowing CO2 emissions-intensity improvements of coal plants, as well as earlier retirement for a young coal-fired power plant fleet (IEA, 2020a).

Previous caution regarding the emissions impact of the system is now looking more justified (Jotzo et al., 2018). Reports suggest the Ministry of Ecology and Environment (MEE) have proposed new relaxed intensity benchmarks for power plants, including 1.003 gCO2/kWh for coal plants with capacity over 300 MW. Considering that China Energy Investment Corp, China’s largest coal power company, emitted an average intensity of 0.719 gCO2/kWh across all plants in 2019, the MEE’s new proposal could result in an almost 30% over-allocation of allowances. Gas-fired power plants also received a proposal to relax the intensity benchmark by 6%, to 0.404 gCO2/kWh. Over-emitting power plants may also not need to pay penalties for additional emissions past a ceiling of 20% (Reklev, 2020).

China’s actions abroad will also have an important impact on future global greenhouse gas emissions, due to the financing and building of both fossil-fuel and renewables infrastructure worldwide through its Belt and Road Initiative (BRI), which involves 126 countries that could account for as much as 66% of global carbon emissions in 2050 (Jun et al., 2019).

Since 2014, Chinese banks have invested over five times more in developing coal-fired capacity than wind and solar capacity in Belt and Road countries; since 2000, loans have totalled upwards of USD 50 billion (Reuters, 2019b). Of all coal-fired power plants under development outside of China, one quarter, or 102 GW of capacity, have been committed to by - or involve proposed funding from - Chinese financial institutions and companies (Shearer et al., 2019).

The global pandemic has also impacted BRI as investments dropped by roughly 50% (25 USD billion) in the first half of 2020 compared to 2019. Although this drop in overall investment led to the highest share of renewable energy investments in BRI in the first half of any year, investments into coal-fired power plants still make up 35% of all energy-related BRI investments so far in 2020 (C. N. Wang, 2020). China’s global policy banks have also issued loans totalling upward of USD 50 billion for coal projects since 2000. BRI policy has solidified China’s position as the top global source for coal financing, even as the second and third largest coal finance lenders (South Korea and Japan) signal moves away from such lending in the post-pandemic era (Climate Action Tracker, 2020a, 2020b; Pearl, 2020).

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