China Is the Emissions Behemoth. Can It Change Fast Enough?

(Bloomberg) --

China is the front line in the global battle against climate change. It’s the nation with the most people, where half of the world’s coal is burned to use more energy than any other country. China currently emits the most greenhouse gases, and there’s not yet a sign of reaching the peak. The rate of growth presages continued rising emissions.

The planet’s best hope is that China manages to match its dramatic rise in emissions with an equally rapid reining in. While it took the U.S. and U.K. more than a century from the start of industrialization to reach peak emissions, China is aiming to do it decades faster.

In its most recent five-year plan, China set several climate targets to meet by the end of this year. Here’s a look at the state of progress—and where China might be going the wrong way.

Carbon Emissions

Goal: Reduce carbon dioxide emissions per unit of GDP by 18% from 2015
Outlook: Good

China officially set 2030 as its target for peak emissions as part of the Paris Agreement. Near term, it’s aiming to reduce energy use and carbon emissions for every unit of gross domestic product—also known as emissions intensity—and it’s well on the way to reaching its five-year plan goals after reducing emissions per GDP by 5.1% and 4% in 2017 and 2018 respectively.

But the atmosphere doesn’t really care about intensity. It’s the total volume of greenhouse gases that drives warmer temperatures. And because China’s economy continues to grow at a brisk clip, its overall emissions have continued to rise even as intensity dips. A national carbon-trading scheme that would help bring down emissions has run into bureaucratic delays, although trading for the power sector is expected to launch this year.

Coal Use

Goal: Reduce coal’s share of energy use to 58%
Outlook: On track, with an asterisk

China’s targets on reducing its use of the dirtiest fossil fuel similarly focus on its share in the market, not its total volume. The nation is likely to reach its goal, with coal’s share of energy use falling to 59% in 2018, but the total amount burned actually rose that year and remains near peak levels set in 2013. Coal’s slice of the pie might be shrinking, but the pie is still getting bigger.

China also plays a major role in growing coal demand outside its borders. Its banks still finance new coal power plants after many global lenders have announced plans to end the practice. That often happens through China’s vehicle for foreign infrastructure investments, the Belt and Road Initiative, which has more than 50 coal power projects in its pipeline, according to Fitch Solutions.

Natural Gas

Goal: Boost the share of natural gas to 8.3-10%
Outlook: Barely going to get there

Natural gas has the opposite problem of coal. China wants to increase its share while total energy use is growing, requiring a massive jump in consumption. The government appears to realize this: initial documents called for gas to have a 10% share by 2020, while subsequent releases widened the target to a range of 8.3-10%.

It will likely get to the bottom of that range, thanks to a government-led program to switch factories and homes in northern China from coal to less-polluting gas in 2017 and 2018. The program has since been scaled back, but not before a massive boost in consumption that drove China past Japan as the world’s biggest importer of the fuel.

Renewable Energy

Goal: Boost the share of non-fossil energy consumption to 15%
Outlook: Almost there

The share of non-fossil fuel energy reached 14.3% in 2018 after a decade in which China outspent all of Europe combined investing in renewable power generation. China has about 756 gigawatts of combined hydro, nuclear, wind and solar power capacity, more than the total capacity of all countries other than the U.S.

That growth was helped by generous government subsidies for wind and solar, which led to building more capacity in some areas than could fit on local grids. The government is now cutting back on those subsidies, believing that cost-cutting in renewables has made them competitive against coal without that support.

Air Quality

Goal: “My hope is that every day we will see a blue sky” —President Xi Jinping, Nov. 11, 2014
Outlook: Right direction, but a long way to go

Perhaps the most closely watched metric for China’s environmental progress is the sky in Beijing. The government shut all coal-fired power plants near the capital and in 2017 started forcing millions of factories and homes in the area to replace coal-fired furnaces with cleaner natural gas burners, and air quality has improved noticeably.

In 2019, the average concentration of harmful PM2.5 particles in Beijing fell to the lowest since the U.S. State Department started publishing readings from its embassy in 2008. The reading was still 48 micrograms per cubic meter for the year, almost five times the World Health Organization’s recommended level.

What’s Next?

Since the last five-year plan was drafted, China has become an unlikely leader in the global effort to rein in greenhouse gas emissions after U.S. President Donald Trump exited the Paris climate accords. But more recently, its environmental ambitions have come into question as shoring up the slowest growth in almost three decades becomes a priority.

As China’s leaders prepare for the country’s next five-year plan, with details likely to start trickling out later this year, the question is whether the climate becomes a beneficiary or a victim. With scientists around the world calling for more urgent action, officials in Beijing will have to decide what matters more: the environment or the economy.

--With assistance from Feifei Shen.

To contact the editor responsible for this story: Ramsey Al-Rikabi at ralrikabi@bloomberg.net, Sharon ChenJasmine Ng

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