Insightview.eu has invited Joergen Delman, professor, PhD, China Studies, Department of Cross-Cultural and Regional Studies, University of Copenhagen, to follow up on his article in October on expectations to China’s 14th five-year plan. He now analyses the implications of the key central committee meeting in October for China’s ambitions for a green transition. He argues that Xi Jinping is called out to make good on his 2060 carbon neutrality promise and to finally make a plan to phase out China’s dirty coal.
Joergen Delman works on China’s political economy, politics, civil society, climate and energy politics, and environmental issues. He is a frequent public speaker and media commentator on these topics and lived in China for ten years, working as a consultant for international development organisations, as well as Danish and international businesses. He has worked with and within Chinese government organisations at central and local level. Joergen Delman is a co-coordinator of ThinkChina.dk.
While the US was preoccupied with its elections and the disastrous impact of Covid19, a top-level
Communist Party Central Committee meeting in a Covid19 free Beijing in late October focused on the long-term vision for China’s development until 2035 and the guiding policies for the upcoming 14th 5-year plan for 2021-2025. The
Central Committee stressed that China is on a stable course despite the international turbulence experienced from the Covid19 pandemic and the conflict with the United States. Yet, the Central Committee called for new efforts to promote long-overdue reforms. ”Market” driven structural change was seen as a key to such reforms, and the word “market” [市场] was used no less than 45 times in the
communiqué in Chinese published after the meeting.
Despite the importance of the decisions made at the meeting for China’s future development,
the communiqué primarily reiterated well-known policy headlines without specific details. Even more, the communiqué did not stipulate concrete policies to support
Xi Jinping’s new catchphrase for a shift in China’s economic development strategy, called “
double circulation”.
Xi has promoted that idea since May this year to counter international efforts led by the US to contain China’s economic and technological progress.
The only specific indication of expectations regarding economic growth came in a
Xi Jinping’s speech at the meeting. He noted that China’s economy could double its size by 2035 as compared to now, implying an indicative growth rate of about 4.7% annually in years to come. This would be within the range of the so-called New Normal that
Xi Jinping defined as the medium-term growth platform for China back in 2014.
In advance of the Central Committee meeting,
speaking to the 75th General Assembly of the United Nations on September 9.,
Xi Jinping made the surprise announcement that: “We aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.” The 2060 target was brand new. It indicated a turn in China’s approach to its green transition. This will have profound implications for the coming five-year plans. However, the 2060 target did not make it into the Central Committee’s communiqué, which simply reiterated the already well-known position that green, environmental and low-carbon policies would have to be mainstreamed into the overall policy framework of the five-year plan.
Leadership puts pressure on itself
For decades, economic growth has been the dominant target in China’s development plans and it has come at the expense of the wellbeing of the environment. However, in recent years, China has formulated more coherent environmental policies and laws and tried to bolster its environmental governance. Overall, the regulatory framework has become more stringent according to an
OECD report from 2018 on China’s move towards green growth. Yet, China is not doing well in international comparison in relation to environmental policy implementation. The country ranked no. 120 on Yale University’s Environmental Performance Index in 2018.
While there is no doubt that the Chinese leadership under
Xi Jinping are protagonists of green change, they now feel under pressure to ramp up and coordinate, simultaneously, the implementation of environmental, energy, and climate change policies.
Xi Jinping’s stunning announcement at the UN General assembly in September reflects that the leadership has set a new course with profound implications for the ‘green’ quality of China’s future development.
The experts chip inPresumably, Xi’s announcement came after internal deliberations between policymakers and experts on climate policy.
China’s climate change and energy experts were asked to provide inputs to the 14th five-year plan already one year ago, like expert groups in other sectors. Such use of expertise is common when the Chinese authorities prepare new 5-year plans.
At a
press conference on October 12, professor He Jiankun from the Tsinghua Institute of Climate Change and Sustainable Development [ICCSD], who is also Vice Chairperson of the National Committee of Experts on Climate Change, presented the results of an authoritative, government-mandated project: “China’s Low-carbon Development Strategy and Pathway”.
The project was supervised by China’s senior chief climate negotiator, Xie Zhenhua.
The study focused on a 2050 and not a 2060 pathway towards low carbon development, indicating that, even to the experts,
Xi Jinping’s 2060 target was new. In the short-term perspective of the 14th 5-year plan, He Jiankun’s team recommended to move two key green change targets forward from 2030 till 2025 [marked in red in Figure 1 below
from original presentation].
He Jiankun’s team suggested that China must review its existing commitments to the Paris Climate Agreement and decide between a compliant policy or a reinforced policy scenario that will determine China’s contribution to a 2oC or a 1.5oC global temperature increase respectively by 2100, such as the Paris Agreement requires. The team recommended that, ideally, China could align its strategy with the 1.5oC scenario, which would result in net-zero emissions in 2050, and not in 2060. These proposals could help ensure that China can reach its green transition goals in 2050, well in advance of
Xi Jinping’s 2060 promise. However, at this stage, China is still far from the 2oC target according to
an authoritative international review.
A team from China National Renewable Centre [CNREC], which belongs to the Energy Research Institute under the National Development and Reform Commission [
NDRC], was part of He Jiankun’s national project group and looked at China’s energy transition pathways. This team works with two similar scenarios in studies that are regularly updated in the annual China Renewable Energy Outlook [CREO for short]. In the latest edition,
CREO 2019, the Centre promoted a conceptual framework called “the two energy revolutions” to support its recommendations:
• The Energy Consumption Revolution is an energy efficiency revolution based on so-called deep electrification. Energy efficiency is a key demandâ€side pillar to ensure that the pace and scale of supplyâ€side deployments are adequate to support the economic growth required. Electrification is a means to drive fossil fuels out of endâ€use consumption and to decarbonize electricity supply;
• The Energy Supply Revolution is a renewable energy revolution that emphasizes “deep electrification” through use of renewable electricity. According to the study, technological progress and cost reduction will make renewable energy commercially viable in bulk, particularly through renewable electricity.
The policy measures necessary to ensure that the energy transition will deliver the required reduction of CO2 emissions to meet China’s obligations towards the Paris Agreement are shown in Figure 2.
Finally, the Renewable Energy Centre made the following key recommendations for the 14th Fiveâ€Year Plan:
• Set ambitious, but realistic endâ€targets for the period: Achieve 19% nonâ€fossil energy by physical energy content; target a reduction of energy intensity of the real GDP by 21% [1 % more than He Jiankun’s proposal in Fig. 1]; and reduce CO2 emissions targeting a reduction of real GDP CO2 intensity by 27% [8 % more than He Jiankun’s proposal in Fig. 1.]
• Leverage cost reductions in wind and solar energy and scaleâ€up the pace of renewable energy installations
• Ensure supportive renewable energy policies, such as strong renewable energy purchasing requirements, through a transition from subsidised to market prices
• Internalise the external costs of fossil fuels use and abatement costs through a refined emissions trading system (ETS)
• Pursue electrification with a focus on the need for the industry to reduce coal consumption and the transport sectors to reduce the growing consumption of oil products
• Avoid new coal power plants and conduct orderly prioritised closures of inefficient plants and coal mines.
These recommendations are somewhat more ambitious than those presented in Figure 2 above. Figure 3 below shows the key results under the reinforced policy scenario analysis in CREO2019.
Figure 3 shows that, in 2050, the total final energy consumption can be slightly lower than its 2018 level at 3,050 million tons coal equivalent per year. Until 2035, the final energy consumption would increase to around 3,350 million tons coal equivalent annually. After that, it would start declining. This would happen under continuous economic expansion, thus satisfying
Xi Jinping’s wish for stable economic growth.
The indicative figure for final energy consumption in Figure 3 would also have a significant impact on energy-related CO2 emissions. The 2018 level of 9,550 million tons of annual CO2 emissions will drop to 5,150 million tons by 2035 and 2,600 million tons by 2050. The scenario has approximately 195 billion tons of accumulated CO2-emissions in the period 2018 – 2050, which according to CREO2019, “significantly and responsibly contributes to the global emission reduction effort” [
CREO 2019, p. 16].
If the Chinese leadership pursues the expert recommendations above, especially the recommendation for pursuing deep renewable electrification, China could likely attain
Xi Jinping’s 2060 carbon neutrality goal ahead of time.
Bureaucrat policy entrepreneurs pushing the climate change agenda
At a
press conference on October 28, the day when the Party Central Committee concluded its meeting in Beijing, a high-level representative of the Ministry of Ecology and Environment [MEE], which is also responsible for China’s climate change politics, explained that
Xi Jinping’s 2060 carbon neutrality goal would undoubtedly exert profound influence the 14th as well as the 15th five-year plans.
The representative outlined initiatives that would be essential to ensure compliance with the carbon neutrality target. First, he called for more detailed plans and policy instruments and for close monitoring of implementation by local authorities, since they have often had other priorities than green change. Secondly, the existing leadership over climate change politics would have to strengthen the coordination of all climate change and environmental policy and governance initiatives across administrative divisions and use market mechanisms more actively than now to stimulate the green transition. Third, more effective and stringent measures are necessary to constrain the use of fossil fuels and to change the energy pricing system that favours fossil fuels. In this connection, China must promote electrification wherever possible to ensure that green energies replace fossil fuels. Four, China must push ahead with plans for green industrial and business systems, covering all sectors of the economy. Five, apart from promoting low carbon production, the MEE representative also proposed that China’s citizens must shift to a low carbon lifestyle. Finally, China will have to continue its international engagement with the Paris Agreement negotiations and continue its collaboration on climate change challenges with international partners.
Struggle with coal
CREO2019 warned that mismanagement of the green energy transition could lead to a reversal of positive renewable energy development trends and a resurgence of power generation investments based on fossil fuels, which would lead to technology lockâ€ins, more stranded assets and overshooting of China’s greenhouse gas emissions visâ€àâ€vis the targets in the Paris Agreement.
Indeed, coal is still dominant in China’s energy supply [see Fig. 3] and it remains an ‘enemy’ of
Xi Jinping’s 2060 carbon neutrality goal. China could have stopped its expansion of coal power years ago, but sustainable energy remains “
dwarfed” by polluting fossil fuels In China’s industrial hubs. According to
Global Energy Monitor, the problem is aggravated by the day. While other countries are trying to discourage coal,
China continues to build new plants at a phenomenal pace. China has 249.6 gigawatts [GW] of coal-fired capacity under development [97.8 GW under construction and 151.8 GW in planning], which is a 21% increase over end-2019 [205.9 GW]. The amount of capacity under development [249.6 GW] is larger than the existing coal fleets of the United States [246.2 GW] or India.
According to
CREO2019, residential consumption of coal has decreased due to policies aimed at controlling emissions. At the same time, however, due to industrial consumption growth, China’s coal consumption reached 3.84 billion tons in 2018, an increase of 1% yearâ€onâ€year. The proportion of coal used for power generation increased by 8% compared with 2017.
Therefore, while
China is trying to clean up its coal act and to reduce its carbon emissions from coal, the coal sector continues to expand. Even more, according to
Global Energy Monitor, lack of coal power capacity to generate electricity is not the reason for the resurgence in coal plant development. Rather,
the development is driven by misguided incentives. Local authorities and energy companies constitute powerful vested interests that are engaged in a race to grab market shares in power generation and coal mining with huge investment projects that aim to boost GDP growth to please
Xi Jinping and his leadership. They do it with the help of state-owned banks that lend to state-owned utilities without due diligence. According to
Global Energy Monitor, recent local lending quotas and local calls to boost spending in an effort to offset the economic impact from Covid19 aggravate existing efforts to stop coal investments. Actually, new investments in coal power are wasted since the utilization rates of the average thermal power plant only generated electricity at 49% of capacity in 2019, down from 50% in 2015 and 60% in 2011.
China also continues to export polluting coal-based technology within the
Belt and Road Initiative, thus threatening to lock its partners into the same high-emission development that China is trying hard to exit.
A conservative estimate from 2018 showed that China’s overseas coal projects established between 2001 and 2018 emitted about 600 million tons of CO2 despite using the cleanest coal-burning technology available in the world market. That is about 6 % of China’s current emissions [see Fig. 3 explanation] or about 11 per cent of total US emissions in 2015.
Therefore, it is time to ask, if not
Xi Jinping, who else will have sufficient power to quell the vested fossils interests that are running amuck in China these years? Xi has the support from the experts who have delivered optimistic, yet realistic projections. However, solid political and legal interventions are necessary to bar new coal projects, but also to help those in the sector who are afraid of ending up with stranded assets.
The National People’s Congress is expected to approve the final 14th five-year plan in March next year. The plan must articulate clear support to
Xi Jinping’s 2060 carbon neutrality goal. More specific policy initiatives and targets must follow in the relevant national and regional energy and climate change plans as well as in relevant sector plans. Indeed, time is up for
Xi Jinping. He must demonstrate that he is willing to take on the final struggle with coal interests and build a truly green energy system. Otherwise, the world will remain sceptical and critical about China’s willingness to act as a responsible international stakeholder in climate change mitigation.
29. September 2020 - By Invitation: Xi Jinping's response to complex challenges - China's 14th 5-year plan on the way
31. May 2020 - By Invitation: May session of China's National People's Congress held in the shadow of escalating China-US conflict
