China’s Five Year Plan disappoints with “baby steps” on climate policy

On Friday the Chinese government released some long-awaited detail on its latest five year plan, and it was not the news many were hoping for – especially after President Xi Jinping’s surprise promise to go “carbon neutral” by 2060.

Rather than following up that 2060 pledge with a radical, immediate action to curb emissions, the plan contains no absolute emissions targets, and is light on any detail of comprehensive, workable strategies to make China’s energy sector emissions free.

Lauri Myllyvirta, lead analyst as the Centre for Research on Energy and Clean Air, describes it as “baby steps towards carbon neutrality”.

“The overall five-year plan just left the decision about how fast to start curbing emissions growth and displacing fossil energy to the sectoral plans expected later this year – particularly the energy sector five-year plan and the CO2 peaking action plan. The central contradiction between expanding the smokestack economy and promoting green growth appears unresolved,” he wrote on Friday.

The most ambitious emissions reduction policy in the document was a target to reduce emissions intensity by 18 per cent by 2025. Given over the last five years China’s emissions intensity has fallen by 18.8 per cent, this looks like a “business as usual” approach.

China’s emissions have carried on rising over the last five years even with emissions intensity reduction – Myllyvirta puts it at an average of 1.7 per cent a year – and look likely to continue. China already contributes close to 30 per cent of the world’s CO2 emissions.

The Intergovernmental Panel on Climate Change says the world must cut its emissions in half between now and 2030 to keep global temperatures below 1.5 degrees. Given China says it will peak its emissions by 2030, the IPCC target looks painfully unlikely to be met.

As for the overall global carbon budget, China’s current position does not bode well. To keep global warming to no more than 1.5 degrees above pre-industrial levels, the total global CO2 budget left is around 286 gigatonnes of CO2, according to the Mercator Research Institute on Global Commons and Climate Change.  At 2020 levels (31.5 gigatonnes, according to the International Energy Agency), that gives us nine years before the 1.5 degree budget is exhausted.

If the rest of the world miraculously stopped emitting CO2 overnight, China would still exhaust the whole world’s carbon budget within 30 years – 10 years before it says it will reach net zero. Of course that doesn’t take into account the degree to which China may reduce emissions after 2030, but it gives a sense of the scale of the challenge.

Source: David Sandalow, Asia Society Policy Institute

Myllyvirta assessment of China’s “baby steps” plan is that it is “much closer to business-as-usual than the big bang needed to get to carbon neutrality”.

But Jorrit Gosens, a research fellow at Australian National University’s Crawford School of Public Policy, says the policies are not really surprising and fit with other commitments Xi has made.

“Immediate headline figures sort of leave a little room for emissions to grow through to 2025, through to 2030. Is that disappointing? It’s only disappointing if you wanted an extra step above what they promised a couple of months ago.”

That promise included to peak emissions by 2030, and to add a massive 1200 gigawatts of renewable capacity over the same period.

Gosens says the latter target is where the hope may be. “This Five Year Plan is very headline stuff, and it’s very possible that in the renewable energy Five Year Plan they will have very ambitious targets and instead of saying let’s limit emissions, they’re going to fix this instead in putting more support on renewables. And then coal-fired power will fall by quite a bit anyways.”

Tim Buckley, director of energy finance studies Australia/South Asia at the Institute for Energy Economics and Financial Analysis, is also optimistic, saying the incredible rate at which renewable capacity is coming online is cause for hope.

“China’s President Xi explicitly plans at least a trebling of total installed VRE (variable renewable energy, so wind and solar) to over 1,200GW by 2030. I expect they will go a lot harder, but Chinese leadership likes to ‘do then say’, as opposed to Western leaders talking about what they might subsequently do,” he says.

“China wont start shutting down coal power until they are certain they can build out dramatically more domestic VRE, but now that solar and wind have reached grid parity on cost without subsidies, 2021 will continue this recent acceleration, in my view. China is forecast to install 75GW of solar in 2021 – a 50-55 per cent lift on 2020. Nothing slow and orderly about that rate of growth, particularly if you extrapolate that out for a decade.”

He says the focus on the rate at which China has been building new coal-fired power stations tends to ignore the fact that the utilisation rate of these coal-fired power stations has been falling for a decade, and recently hit a low of 49 per cent. Both he and Gosens (and many other observers) agree the main driver of this coal expansion has not been energy demand, but the desire of provincial governments to stimulate the local economies with big infrastructure projects. Gosens says it is a mystery to him why the National Energy Agency was allowing these unnecesary power stations to be built.

The NEA received a dressing down for granting so many approvals last month, when a team of inspectors from China’s environment ministry heavily criticised the National Energy Agency for failing to implement President Xi’s “thoughts on ecological civilisation” when approving new coal-fired power stations.

Buckley, meanwhile, says the lack of an explicit GDP target in the latest Five Year Plan suggest Xi is acknowledging that GDP is not the only important thing – though he says economic growth will remain Xi’s top priority, above climate policy.

Malte Meinshausen, climate scientist and director of the Climate and Energy College at the University of Melbourne, said notwithstanding the 2060 target, which was welcome, China remained a climate policy “laggard”.

He said the 18 per cent emissions intensity reduction figure was “very disappointing as it falls even behind the quantification of China’s initial nationally determined contribution, which assumed a 4.4 per cent annual decrease”, which he said would amount to 22 per cent over the five years, not 18 per cent.

“On the one hand it’s fantastic to have the notion of a 2060 target – it creates a dynamic of a clear landing zone. But of course the critics will say a target in the long term doesn’t mean anything if you don’t take the first steps to implement it.”

James Fernyhough is a reporter at RenewEconomy. He has worked at The Australian Financial Review and the Financial Times, and is interested in all things related to climate change and the transition to a low-carbon economy.

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