In November 2014, President Obama and Chinese President Xi Jinping shook hands on a historic agreement to control greenhouse gas emissions in both countries. The United States pledged to bring national emissions at least 26 percent below their 2005 levels, while China vowed to put a peak on its growing carbon dioxide emissions by the year 2030. These pledges would go on to become part of each country’s national commitments for the 2015 Paris Agreement, which was adopted during the United Nations’s climate conference in December.
It seemed an ambitious set of targets at the time, particularly for China, which overtook the United States as the world’s biggest carbon dioxide emitter in 2007. Yet experts are now saying that achieving its goal is not only possible for China — the country may have already done so by the time the climate deal was made.
A new paper, released Sunday night by the Grantham Research Institute on Climate Change and the Environment and the ESRC Centre for Climate Change Economics and Policy at the London School of Economics and Political Science, argues that a changing economic and energy landscape in China will help the nation’s emissions to peak by 2025 at the latest — if it didn’t already happen in 2014. The report, which will be published in the journal Climate Policy later this month, was released just two days after the Chinese government announced it would cap its annual energy consumption at 5 billion metric tons of standard coal equivalent by 2020 and reduce its carbon dioxide intensity by 18 percent between now and then.
“We basically focused on trends in China’s economy generally, which affect energy demand and trends in energy supply, and used that to come up with a forecast of the trajectory of China’s carbon dioxide emissions in the energy sector over the coming decade,” said lead author Fergus Green, currently a PhD candidate at the London School of Economics and Political Science’s Department of Government. Green co-authored the paper with renowned climate economist Nicholas Stern, chair of the Grantham Research Institute, and served as Stern’s policy analyst and research adviser at the time the research was conducted.
In their report, Green and Stern argue that China is now entering a “new normal,” in which a series of fundamental economic changes is beginning to take place that will help transform the country’s energy landscape and level out its greenhouse gas emissions, which are currently driven largely by the energy sector. And these changes are already beginning to take place.
In the previous few decades, China’s economic model was based on high GDP growth rates and heavy investment in construction and related industries, such as steel and cement, the authors pointed out. These industries are extremely energy intensive and have relied heavily on coal-fired power stations, which produce huge amounts of greenhouse gas emissions. Between 2000 and 2013, the country’s coal consumption grew by about 8 percent each year, the report notes, nearly tripling altogether by the end of the 13-year period. The result was huge economic growth, accompanied by hefty carbon dioxide emissions.
This system is not sustainable forever, the authors have pointed out. Increasing concerns over air pollution in the nation, coupled with the obvious contributions to global climate change, have made the expansion of coal environmentally untenable — and experts have suggested that the old growth model was socially and economically unsustainable as well, contributing to the rise of social inequalities associated with increasing urbanization.
“We’re reaching a point in much of China where the cities have been built, the roads have been built, a lot of the demand for cement and steel is essentially slowing,” said Joanna Lewis, an associate professor of science, technology and international affairs at Georgetown University and an expert on China’s energy landscape, who was not involved with the new paper. “You can’t build indefinitely.”
The authors indicate that China is now entering a new phase in which its leadership will focus on expansion of the service sector and more high-quality and innovative forms of manufacturing, while shifting away from coal-dependent, energy-intensive industries, such as steel and cement. The government began articulating these goals back in 2012, they said, and notable shifts have already begun to occur in the country.
By 2014, the nation’s GDP growth rate had already fallen from double digits down to below 8 percent, and will likely continue to fall to a rate of 6 percent or lower in the coming decade. Meanwhile, in 2014, the growth of the steel and cement industries — notoriously high energy consumers — began to taper off, and production actually declined in 2015, the report says. And consequently, primary energy consumption in the country is down significantly. After growing by about 8 percent each year from 2000 to 2013, consumption grew by only 2.2 percent in 2014 and slowed even further in 2015.
At the same time, China’s energy landscape has continued to diversify, the paper notes. Hydroelectric, nuclear, wind and solar power are all expanding and accounted for more than 11 percent of the nation’s primary energy consumption by the end of 2014, according to the report. And the government plans to increase the non-fossil fuel share of consumption by up to 20 percent by the year 2030, Lewis added.
Perhaps most notably, coal consumption, which powered so much of China’s forward momentum in the previous decade, saw no growth in 2014 and actually declined in 2015.
Altogether, the changes that have occurred so far suggest to Stern and Green that China’s emissions may, in fact, have already peaked in 2014. “In order for 2014 not to have been the peak in carbon dioxide emissions, that would require carbon dioxide to grow more than it fell last year overall, this year or in coming years,” Green said.
However, China’s senior climate change envoy, Xie Zhenhua, reportedly said at a Monday press conference that the country’s emissions did not peak in 2014 and were still growing. So while China, like all countries under the terms of the Paris agreement, could have the opportunity to tighten its climate goals should its current commitments prove too easily reached, it’s uncertain for now whether the country will choose to do so.
And of course, there’s still uncertainty about the factors that may cause emissions to fluctuate in the coming years. For one thing, oil and gas are still expanding in the nation, and experts aren’t sure yet how fast those industries will grow. On top of that, there are certain challenges to the integration of renewable energy on the grid, Lewis said. And, as the authors point out, there are still decisions to be made about the existing coal supply in the country, despite falling demand for coal-fired power generation. One worry is that the demand for coal conversion, or the conversion of coal into liquid or gas — an energy-intensive industry in and of itself — will increase.
However, Green said the central government has already begun to take a stand on the shift away from coal and will likely maintain a sharp focus on the issue in the coming years. The government recently announced that, starting this year, it will place a moratorium on any new coal mine approvals for at least the next three years,and it’s also expected to cut down on existing coal production capacity by shuttering hundreds of existing mines this year.
Altogether, considering the changes in GDP and energy supply and demand that have occurred so far, and are expected to continue through the next decade — the country’s “new normal,” in other words — Green and Stern predict a peak in carbon dioxide emissions some time between 2020 and 2025, if it hasn’t occurred already.
It’s a reasonable prediction in Lewis’s eyes as well, and one that may be gaining traction among economists and energy experts. Although a 2014 peak, specifically, is far from certain, she said, “This seems to be a rising consensus — that emissions will peak earlier than had been expected and likely earlier than China had pledged in Paris.”