The Buzz

China's War Against Carbon Begins

China's long-anticipated formal pledge to international climate change negotiations, it's “intended nationally determined contribution” or INDC, has arrived.

China's target is a 60% to 65% reduction in the emissions-intensity of the economy by 2030 pegged at 2005 levels, with carbon dioxide emissions peaking around 2030, perhaps earlier. China has also pledged to increase the share of non-fossil fuels to 20% of total energy use and a large increase in forest carbon stocks.

The emissions-intensity target means reducing the ratio of carbon dioxide emissions to GDP by 60% to 65%, or conversely, increasing the amount of economic output per tonne of carbon by almost two-thirds. It's the only new commitment in addition to what China pledged at a joint announcement with the US at last year's APEC meeting. And it packs some punch.

Decarbonization and how to do it

What it means is that China aims to continue until 2030 the rate of decarbonization targeted for the 2005 to 2020 period—around 4% per year. This target will require strong action to improve energy productivity and shift to zero-carbon energy sources.

Such a pace of cleaning up  economic growth has rarely been achieved elsewhere over a significant period of time. The decarbonization rate in the U.S. since its emissions peak in 2007 is 3.3% per year, and this has included an unprecedented boom in cheap gas. EU carbon dioxide emissions peaked in 2002, and its collective emissions intensity declined by an annual average of 2.2% during the following ten years. The main historical precedent for decarbonization rates above 4% per year over extended periods of time are Russia and other parts of the Eastern bloc following the 1990s collapse of Soviet-era industrial structures.

The long list of actions listed in China's INDC is a fair indication of the magnitude of the task, and it is a sign of the resolve of the Chinese Government. They range from higher efficiency in coal use and a limit on the total amount of coal; fast development of solar, wind, hydro, nuclear and gas; energy efficient and low-carbon industrial systems; and cutting emissions from buildings and transport. The actions also include broader support for R&D, low-carbon growth patterns, a strong commitment to national emissions trading and to “make the market play a decisive role in resource allocation.”

Change is underway

Yet China could do better still. China is likely to outperform the 2020 target, given that average annual reductions from 2005 to 2014 were 4.5%, as reported by Beijing. Energy productivity greatly lags that of advanced economies. Enormous gains can be made by further improving technical efficiency and by accelerating the shift in economic structures away from energy-intensive industries. And China will continue to shift its energy mix away from coal and towards nuclear, gas and renewables, and also towards reducing the emissions-intensity of every unit of energy used.

Fundamental changes in the factors that drive China's greenhouse gas emissions are already happening. Total coal use in China fell in 2014 compared to 2013 (on the basis of preliminary data). This is partly because industrial output such as steel has leveled off, heralding the 'new normal' of Chinese economic growth. The era of extremely rapid expansion of infrastructure is coming to an end and the sources of economic growth are shifting to less resource-intensive activities.

Alongside structural changes, China is achieving rapid improvements in the efficiency of energy use. New coal-fired power stations are still being built, but they are state of the art and are replacing old inefficient plants. Industry, road transport and buildings are all getting more efficient and there is huge potential for further improvements. Add to that the push for the expansion of hydroelectricity and nuclear power, as well as solar and wind plants, all of which are beginning to make a dent in China's energy supply.

China's emissions turnaround is driven partly by circumstance and partly by a strong policy effort. That effort is not being undertaken out of altruism for the global climate but for solid reasons of national self-interest. A lower carbon trajectory has tangible short to medium-term benefits for China, as I explained in a recent paper with my colleague Teng Fei from Tsinghua University.

A flat and early peak?

It all adds up to the prospect that China's emissions could peak well before the target date of 2030, as argued recently by Nick Stern as well as Ross Garnaut. Many experts see a peak in the first half of the 2020s as possible, and some think it could happen even earlier.