China Evolving to Coal Consumption Peak & Strong Climate Commitments

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Working on international climate change issues over the years I’ve seen the debate shift profoundly in several ways. One of the key shifts is the perception that countries like China aren’t doing anything on climate change – a relic of the debate almost two decades ago – to a new reality – that China is taking serious action and is clearly on the brink of even more major action. This shift will be front and center next week when President Obama will hold a bilateral meeting with Chinese President Xi Jinping. Both countries are poised for stronger actions to address climate change. 

credit: ansoncfit

 As I discussed during a Brookings Institution panel on U.S.-China Cooperation on Climate Change and the Environment,  the evolving debate in China over air pollution, coal consumption, and climate action has shifted dramatically in recent years (see here for my full remarks). 

 Over 2 years ago NRDC set out on a major new effort to help China address the environmental and health impacts of its heavy dependence on coal. We launched the China Coal Consumption Cap Plan and Policy Research project in October 2013. The project brings together over 20 leading government think-tanks, research institutes, and industry associations in China to develop a comprehensive roadmap for establishing and implementing a national coal consumption cap target and policy to peak coal consumption in China by 2020 and help it achieve its environmental protection, climate change, and sustainable economic development goals. I’ll be joining our team in China for a major international workshop in China the week of November 17th to release some preliminary findings from this effort.  

China has put in place major efforts on energy efficiency and renewable energy. Yet, its continued reliance on coal remains its major energy and climate challenge – especially in recent years when large swathes of China have been frequently blanketed with severe smog, posing a grave threat to public health.  The public and government’s growing understanding of how severe China’s air pollution has become – often referred to as China’s “Airpocalypse” – has led China’s President Xi Jinping to call for an “Energy Revolution”. The country has taken several steps to address this air pollution challenge. Currently, nearly one-third of China’s provinces and provincial-level cities have set provincial-level coal consumption targets to either reduce or cap their coal consumption by 2017. China has also begun to implement a number of new tools to address its air pollution.

As a result, there is a growing recognition that a national coal consumption peak is both achievable and desirable.  Chinese officials are seriously considering a mandatory, nationwide coal consumption cap target and policy in the next Five Year Plan (to run from 2016-2020) because of the recognition that in order for China to address its severe environmental challenges, it must address China’s core energy problem: its longtime overdependence on coal as its primary energy source and the resulting pollution. The debate has shifted from “will coal consumption peak in China” to “by which date and at what level will it peak, and what tools will the government put in place to achieve this”?

There are some intriguing trends emerging in China this year that make peaking coal consumption in the next five year plan seem like an increasingly achievable goal. China’s coal consumption in the first three-quarters of 2014 was 1-2% lower than the same period in 2013, the first time coal consumption has fallen this century, even as its GDP continued to grow at 7.4%. Even as power demand has continued to grow, coal fired power generation is slowing, and iron and steel and cement sector consumption of coal has also slowed down. So we may be seeing the beginning of a decoupling of coal and economic growth, as heavy industry becomes less important than services as a driver of growth, and alternative sources of energy begin to outpace coal.

In fact, the China’s National Energy Agency is currently considering the energy targets for the 13th Five-Year Plan, and news reports have reported that it is considering a cap on coal consumption in the next Five Year Plan and a target to reduce coal’s share of primary energy to 60% by 2020. They are also reportedly considering targets to grow wind to 200 GW (twice the target of the 12th FYP) and solar to 100 GW (5 times the goal of the 11th FYP) by 2020. These represent ambitious goals to decisively shift China’s energy use to a lower carbon path.

This debate matters for China and the World as we go into a next major round of international climate commitments. What the US and China do on climate change is the single most important outstanding issue to ensure that the new climate agreement in Paris next year puts the world on a solid path to safeguard our children and grandchildren from a world that isn’t devastated by climate change.

China has confirmed that it will present its proposed next round of national climate targets by early next year as a key input into the Paris agreement. So the next couple of months are critical. At the September Climate Summit, China provided the first official hints of what we might expect when they stated: “We will announce post-2020 actions on climate change…which will bring about marked progress in reducing carbon-intensity, increasing the share of non-fossil fuels and raising forest stock, as well as the peaking of CO2 emissions as early as possible.” China’s carbon emissions peak has moved from theory to practice.

Since coal is a major source of China’s carbon emissions, a national coal consumption cap policy that peaks coal consumption by 2020, and an ambitious implementation plan to achieve this, will help ensure that China’s CO2 emissions peak no later than 2025.

We are confident that China can meet these coal consumption control and CO2 objectives as it continues to develop its economy in a more balanced way, while addressing its air pollution and climate change challenges, serving as a model for other countries to develop in a more climate-friendly way.