As the US rolls back its climate change policies, China is positioned to lead
Posted by admin on 12th September 2019

As the effects of climate change become more widespread and alarming, U.N. Secretary-General António Guterres has called on nations to step up their plans for cutting greenhouse gas emissions. Every country has a part to play, but if the world’s largest emitters fail to meet their commitments, the goal of holding global warming to a manageable level will remain out of reach.

U.S. carbon dioxide emissions are on the rise after several years of decline, due in part to the Trump administration’s repeal or delay of Obama administration policies. In contrast, China – the world largest emitter – appears to be honoring its climate targets under the 2015 Paris Agreement, as we documented in a recent article with colleagues.

We study many aspects of China’s energy and climate policy, including industrial energy efficiency and reforestration. Our analysis indicates that if China fully executes existing policies and finishes reforming its electric power sector into a market-based system, its carbon dioxide emissions are likely to peak well before its 2030 target.

China’s climate portfolio

Over the last decade China has positioned itself as a global leader on climate action through aggressive investments and a bold mix of climate, renewable energy, energy efficiency and economic policies. As one of us (Kelly Sims Gallagher) documents in the recent book “Titans of the Climate,” China has implemented more than 100 policies related to lowering its energy use and greenhouse gas emissions.

Notable examples include a feed-in-tariff policy for renewable energy generators, which offers them a guaranteed price for their power; energy efficiency standards for power plants, motor vehicles, buildings and equipment; targets for energy production from non-fossil sources; and mandated caps on coal consumption.

China has added vast wind and solar installations to its grid and developed large domestic industries to manufacture solar panels, batteries and electric vehicles. In late 2017 it launched a national emissions trading system, which creates a market for buying and selling carbon dioxide emissions allowances. This was a profoundly symbolic step, given that the United States still has not adopted a national market-based climate policy.

Most of these policies will produce additional benefits, such as improving China’s energy security, promoting economic reform and reducing ground-level air pollution. The only major program explicitly aimed at reducing carbon dioxide is the emissions trading system.

China will need to carry out multiple policies to start reducing its carbon dioxide emissions by 2030 – most importantly, reforming its electric power sector.
Gallagher et al., 2019., CC BY

Major challenges and policy gaps

Under the Paris Agreement, China committed to start reducing its carbon dioxide emissions and derive 20% of its energy from non-fossil fuels by around 2030. But when Chinese emissions rose in 2018, international observers feared that Beijing might fail to meet its targets. We analyzed China’s actions to assess that risk.

In our review, we found that the policies with the greatest influence over China’s projected emissions in 2030 were power sector reform, industrial transformation, industrial efficiency, emissions trading and light-duty vehicle efficiency.

Reforming the electric power sector is an essential step. Traditionally, electricity pricing schemes in China were determined by the National Development and Reform Commission, which leads the country’s macroeconomic planning. They favored existing power producers, particularly coal plants, not the cleanest or most efficient sources.

China committed to electric power reform, including emission reductions and greater use of renewables, in 2015. Converting to a process under which grid managers buy electricity from generators starting with the lowest-cost sources should facilitate installation and use of renewables, since renewable electricity has almost zero marginal costs. Meanwhile, renewable energy projects across China, especially solar, have become cheaper than grid electricity.

Even as China made big investments in wind and solar power in recent years, it also kept building coal plants. Power sector reform will help reduce the resulting overcapacity by stopping planned additions and encouraging market competition.