Behind the numbers: China-U.S. climate announcement's implications for China’s development pathway

The past five weeks have given us what may be defining moments on the road to a Paris agreement that will lay a foundation for a future climate regime.

• On October 23, European Union leaders committed to reduce greenhouse gas emissions by at least 40 percent by 2030 and increase energy efficiency and renewable energy use by at least 27 percent by 2030.
• On November 12, during the APEC Summit in Beijing, Chinese President Xi Jinping and United States President Barack Obama jointly announced their post-2020 climate mitigation targets: China intends to achieve peak CO2 emissions around 2030, with best efforts to peak as early as possible, and increase its non-fossil fuel share of all energy to 20 percent by 2030; and the U.S. agreed to cut emissions by 26-28 percent below 2005 levels by 2025.
• On November 20, at the donor conference in Berlin, led by the U.S., Germany, and others, donors pledged about US$9.3 billion to the Green Climate Fund (GCF).

China’s announcement in particular is considered by many to be a game changer. China, the world’s biggest emitter with its emissions accounting for more than 27 percent of the global emissions, is setting an example for other major developing countries to put forward quantifiable emission targets. The announcement will hopefully also brush away the “China excuse,” used by some developed countries that have avoided commitments on the grounds that China was not part of action under the Kyoto targets.

There are different assessments of the actual level of effort required of China to reach the proposed targets.

Let’s start with the hard numbers: Increasing China’s non-fossil fuel energy share to 20 percent by 2030 would mean installing 800 to 1,000 gigawatts (GW) of clean energy capacity, which is more than all the existing coal-fired power plants in China and close to the total electricity-generating capacity of the United States.

Reaching the targets would require growth in all of the following:

• Nuclear power, from a current share of 0.9 percent to 6 percent;
• Renewable energy (wind, solar, and biomass), from 1.3 percent to 5.5 percent; and
• Hydro power, from 7.6 percent to 8.5 percent.

As China’s hydro capacity has almost reached its maximum, the increase would largely come from nuclear and renewables. Some Chinese researchers have calculated that reaching the targeted non-fossil fuel share would mean building four wind farms at the size of 300 MW every week or building a nuclear plant at the size of 1 GW every three weeks.

Assessing the level of ambition needed for emissions to peak by 2030 is challenging. Like all other projections, there are many assumptions and uncertainties associated with establishing mid- and long-term mitigation scenarios.  Essentially, reaching the emissions peak by 2030 will depend on how China manages “carbon contents” in its massive process for industrialization and, in particular, urbanization. The current rate of urbanization in China is about 52.6 percent and will reach 68-72 percent by 2030.  Some have estimated that urbanization alone will lead to at least an additional 4 gigatonnes of CO2 emissions if no additional policies are adopted to decouple emissions from the growth in urban transport and buildings.

As a rapidly growing economy, there are many uncertainties in projecting emissions, depending on a number of factors, such as:

• Projection of the GDP growth. It seems that peaking by 2030 is based on the assumption of an annual GDP growth rate of 4-5 percent during the post-2020 period; however, if GDP growth is higher, peaking could be postponed if the reduction in emission intensity remains 4.5 percent on an annual basis.
• Rate of the reduction in energy intensity of GDP. It is projected that energy intensity would need to decrease at least 3 percent annually in order to peak by 2030; however this objective would largely depend on the speed and penetration of the ongoing economic restructuring in pursuing high-productivity and high-value-added growth. (He, Tsinghua University)
• Adjustment of energy mix – nuclear factor. Almost 90 percent of China’s primary energy comes from fossil fuels. To double the ratio of non-fossil fuels, nuclear will play a decisive role – potentially increasing from the current 18 GW to 200 GW by 2030. However, safety concerns after the Fukushima disaster in Japan have held back approval of new nuclear reactor programs. This means that the speed of construction of nuclear plants will have to accelerate considerably leading up to 2030.

There are always uncertainties in projecting the future, but leaving aside the numbers, the greatest significance of China’s announcement is that for the first time the top Chinese leadership has laid out a road map with specific goals to cap China’s rapidly growing emissions. The goal will inject an important direction in China’s development pathway and will guide national planning for the coming decades. One can expect that China’s five-year plans will spell out and translate this long-term goal into short-term specific targets, milestones, and actions.

China has embarked on a transformation. The strategic goal of reaching greenhouse gas emissions peaking around 2030 will inspire and accelerate China’s transformation to a low-carbon, innovation-driven economy.

Photo: Manufacturing solar cells at a factory near Shanghai.