Abu Dhabi, UAEWednesday 21 October 2020

Why China’s goal to become carbon-neutral by 2060 matters

If the world's second-largest economy meets its target, it can significantly lower global warming on its own this century

People cross a road on a polluted day in Beijing on October 10, 2020. If China achieves its carbon-neutral goals by 2060 it would on its own lower global warming to 2.35 degrees Celsius this century from an expected 2.6 degrees. AFP
People cross a road on a polluted day in Beijing on October 10, 2020. If China achieves its carbon-neutral goals by 2060 it would on its own lower global warming to 2.35 degrees Celsius this century from an expected 2.6 degrees. AFP

As I stepped out one chilly evening in Beijing, the fog had an acrid taste. Even after three years of efforts to clean up winter heating by replacing coal with gas, air quality over northern China remains poor.

However, President Xi Jinping announced plans last month for his country to become carbon-neutral by 2060 – a tectonic shift in the campaign against pollution and global climate change.

China’s move is important because of its own huge and still-growing carbon dioxide emissions. It is even more crucial because of the push and shape it will give to climate change policies and low-carbon technology.

The EU was the first major bloc to set out plans in November 2018 to go carbon-neutral by 2050. US Democratic presidential candidate Joe Biden’s platform also proposes a net-zero target for the US by 2050.

As notable as these may be, China’s path is even more vital. If achieved, it would on its own limit global warming to 2.35°C above pre-industrial levels this century, from an expected 2.6°C.

That brings us significantly closer, if not close enough, to the aim of the Paris Agreement in 2015 to limit warming to 1.5°C above pre-industrial levels.

European greenhouse gas emissions in 2018 stood at 4.4 billion tonnes of carbon dioxide equivalent, having declined by 14 per cent since 2008. America’s 6.7 billion tonnes had dropped more than 4 per cent.

By contrast, China’s 13.6 billion tonnes were up 37 per cent over that period. China’s per-capita emissions are now significantly higher than Europe’s, despite being only half those of the US.

With Mr Xi also announcing plans for carbon dioxide emissions to peak by 2030, we will have an early test of the country’s progress.

However, current trends already suggested a peak by 2025, so a much bigger push will be required to embark on the road to neutrality.

Forty years separate us from Deng Xiaoping’s initial economic reforms that birthed the Chinese behemoth today; in another 40 years, that economy must transform utterly.

A nation that generates about three fifths of its energy from coal must ditch the black stuff. Industries that make 58 per cent of the world’s cement, 56 per cent of its aluminium and 53 per cent of its steel need to clean up or close down.

The central government needs to curtail over-investment by local administrations, who are judged today on economic growth and employment statistics, not carbon or pollution.

It must align the big state coal, chemical and oil groups with the goal of carbon neutrality.

This applies not just at home, but also to its international expansion: coal power stations, not renewables, are the centrepiece of the flagship Belt-and-Road Initiative.

Why would China make such a commitment? The country’s long-term rise depends on the reduction of dangers such as floods, droughts, desertification, melting glaciers, rising seas, air and water pollution and the other stresses on its battered environment.

More pressingly, Beijing’s image has been damaged due to the coronavirus outbreak, confrontation with India, other geopolitical issues and concerns over trade and technology policies.

As the date for President Donald Trump’s planned withdrawal of the US from the Paris Agreement approaches, China has a chance to seize the climate leadership with Europe and appear as the responsible international stakeholder.

Coal is a secure domestic fuel while imported oil and gas represent a potential Achilles heel.

In contrast, China famously has major resources of important new energy minerals including graphite, lithium and, especially, rare earths, as well as most of the world’s capacity to process them.

Renewable and nuclear power are indigenous sources of energy.

The massive investment required would raise economic growth by almost 5 per cent later this decade, according to analysis by Cambridge Econometrics. China’s falling carbon footprint could preserve its access to European markets. In turn, it might restrict imports from higher-carbon trading partners.

Beyond domestic security is the urge to dominate the new energy economy – not through fossil fuel exports, as the Trump administration has aspired, but by taking the lead in new technology.

A single Chinese company, Longi Green Energy, makes a quarter of the world’s solar silicon wafers, while the country makes more than 70 per cent of solar panels and 73 per cent of lithium ion batteries.

Still, there are gaps. The country’s wind turbine makers have so far largely failed to break out of their home market. China has done little in carbon capture and storage despite its massive coal, chemicals, steel and cement industries that must be cleaned up. It is the world’s biggest producer of hydrogen, the emerging clean energy carrier, but produces most of this from coal. So far, it has lagged behind Europe and Japan in developing a clean hydrogen strategy.

An export-focused low-carbon transformation would bring the costs of green energy technology down globally and help cut emissions outside China. However, such an approach faces strengthening headwinds from trade policy in the US, Europe and India, which are seeking to build up their own manufacturing bases, bring back jobs to their own shores and avoid an overreliance on the Middle Kingdom.

Mr Xi’s personal commitment signals confidence that China can be on track over the next decade or so. Yet, last week’s Opec World Oil Outlook projected continued oil consumption growth in the country up to 2045. This contradiction should concern oil exporters, whose future growth plans bet against Beijing.

Robin Mills is chief executive of Qamar Energy and author of The Myth of the Oil Crisis

Updated: October 12, 2020 02:29 PM

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