Presidents Xi Jinping and Barack Obama announced new and strengthened actions by both countries domestically and working together as part of a joint presidential statement on climate change (see the White House Factsheet and Presidential Statement). These commitments build on their historic November 2014 joint announcement, deepen and strengthen their commitments to address climate change domestically and together, provide momentum for the Paris climate negotiations, and provide substantial new financing for developing countries to build low-carbon and climate resilient economies. This is truly a breakthrough moment for global climate protection, especially when combined with last week's pledge by a number of Chinese cities to peak their CO2 emissions a decade ahead of the national target; those cities together account for more than a quarter of China's urban emissions, equivalent to the total carbon dioxide emissions of Japan or Brazil.
Our colleague Jake Schmidt covers the key aspects of the Presidential Statement related to the international climate negotiations in his post here, including China's significant $3.1 billion pledge to its South-South Climate Cooperation Fund, so we will focus on the domestic Chinese commitments included in the announcement. The most significant of these are:
- Launching a national carbon trading program by 2017 that will cover all key industrial sectors. Much attention has been paid to today's announcement that China will launch a carbon emission trading system (ETS) in 2017. Although China had earlier signaled its intent to expand from its eight provincial ETS pilots to a national system, the fact that President Xi Jinping made an official announcement means that it is now a top government priority. Importantly, the announcement states that the national ETS system will include the majority of China's CO2 emissions, including from the power, iron and steel, chemicals, cement, paper and nonferrous metals sectors. Many important details remain to be worked out, including determining how the carbon cap will be set and how allocations will be made, and ensuring that the system is based on accurate measurements of emissions and achieves its emissions reduction goals. However, the key is that China has signaled its intention to price carbon as an additional tool to move toward a low carbon economy.
- Developing a priority dispatch policy for renewable power. One key development is that China has committed to adopt a clean electricity dispatch system that will prioritize power generation from renewable sources. This is critically important because, even though China now leads the world in wind and solar energy, its current electricity system still continues to give precedence to coal-fired power plants, operating these plants in order to meet minimum contracted hours, rather than operating lower-emitting renewable power plants. Partly as a result of this and other issues, wind curtailment rates this year have reached 20% and more in some provinces. The priority dispatch of renewables is included in the Renewable Energy Law, but actual implementation of this principle has been difficult because of the way the current power system is structured. The government in March launched a new round of power sector reform, however, signaling its intention to improve integration and dispatch of renewables and demand side resources, and the announcement today emphasizes China's intention to make progress in fully utilizing clean energy resources.
To assist with these efforts, NRDC has created a Power Sector Roundtable, which provides an open and transparent platform for dialogue and collaboration, bringing together a diverse group of policymakers, industry experts, enterprises, researchers and civil society representatives, with the express goal of propelling China towards a decarbonized power sector expeditiously and economically. NRDC has also launched a pilot project to show that EVs can play a helpful role in providing more stability to the grid, improving power grid operation and efficiency, and helping the grid to absorb more renewable energy. We will continue to work with government, grid companies, and EV manufacturers to develop these models, so that EVs can scale up as a solution for reducing China's consumption of oil, realizing greater renewable energy penetration, and reducing carbon emissions.
- Controlling and phasing down HFC emissions. The statement notes that China is also planning to accelerate its efforts to control super greenhouse gas HFCs, including "effectively controlling HFC-23 emissions by 2020", and that both countries will cooperate on reducing super-greenhouse gas HFCs which are widely used in air conditioning and refrigeration, but for which companies have already found and are continuing to develop climate-friendly replacements.
Presidents Xi and Obama brought the issue of phasing down the use of HFCs globally to the forefront of international climate change cooperation efforts by agreeing in June 2013 that China and the US would work together and with other countries to phase down HFCs under the Montreal Protocol, and the G20 has similarly called for a phasedown of HFC use. The latest Montreal Protocol meetings have inched closer to starting formal negotiations for a global phasedown of HFCs, but there are still a small handful of countries blocking the negotiations.
In China, the State Council announced in May 2014 that it would strengthen domestic management of HFC emissions and accelerate the destruction and replacement of HFCs, focusing first on subsidizing the destruction of HFC-23, a powerful greenhouse gas that is the by-product of the manufacture of HCFC-22.
This will reduce HFC emissions equivalent to 280 million tons of carbon dioxide through the end of 2015.
- Scaling up green buildings. China also affirmed that 50 percent of new buildings in urban areas will meet green building standards such as China's Three Star Program by 2020. This goal is one of the implementation policies included in China's Intended Nationally Determined Contribution (INDC), and is also found in the National New-type Urbanization Plan (2014-2020) released in March 2014. This is an ambitious goal, considering that only 2 percent of new urban buildings were green buildings in 2012, and the previous goal was 20 percent by 2015, set by the State Council in the 2013 Green Building Action Plan.
To date, however, 28 provinces have issued local implementation plans that mandate a minimum one star level for newly constructed government buildings such as office buildings, schools, hospitals, airports, museums and government- constructed affordable housing. Beijing, Shanghai and downtown Chongqing have taken the lead to mandate all new non-residential buildings being built to at least one star level in 2013 and 2014. And Jiangsu is requiring that from 2015, all new urban buildings, both residential and non-residential, must be green buildings.
It may be challenging to track China's progress in meeting this target, since data on the number of buildings in each city meeting building standards is not disclosed regularly. NRDC is working in China to share and adapt the lessons learned from our City Energy Project, a pioneering initiative to support major U.S. cities in crafting and implementing cutting-edge plans that significantly reduce community energy costs and carbon pollution, create local demand for skilled workers and produce new market opportunities for private-sector investment in green buildings. Many city plans include measures to bolster information transparency, which help building owners and operators understand energy efficiency opportunities and enable information about building energy performance to flow freely in the market. Examples include energy benchmarking, performance reporting and disclosure, tenant submetering, and energy audits.
- Cleaning up transportation. China affirmed that the share of public transport in motorized urban travel will reach 30 percent by 2020, a goal also found in China's INDC. While large cities such as Beijing, Shanghai and Shenzhen have Public Transit to Motorized Transportation Ratio (PTMTR) rates of 50-60%, many medium-sized cities have much lower rates and will need to increase investment in subways, buses and other public transit. Given the many medium-sized cities in China, this offers the potential for huge reductions in emissions.
China also announced that it will finalize next-stage fuel efficiency standards for heavy-duty vehicles in 2016 and implement them in 2019. Some provinces and cities in China have already accelerated the adoption of China V vehicle emission standards, and Beijing is committed to adopt Beijing/China VI standards next year that will be as comparably stringent as the world's best standards.
At an average annual growth rate of 18 percent between 2003 and 2013, China's vehicle stock (including passenger cars, trucks, and buses) reached 125 million units in 2013, giving the country the world's second largest vehicle population after the United States. While the growth of truck and bus fleets is much slower than that of cars, each truck and bus consumes much more fuel, and hence generates more CO2, than a car. This is critically important for reducing both carbon emissions and urban air pollution, and the new announcement on heavy-duty vehicles will drive manufacturers to offer Chinese customers trucks and buses that have much less air and climate pollution.
In today's announcement, both countries emphasized the importance of a low carbon transformation of the global economy over the course of this century (similar to the G7 statement in June) and developing strategies for mid-century transitions as well. Coming from the world's largest carbon emitters and energy users, this makes it clear that we all need to work together to decarbonize our economies, developing short, medium and long-term goals, plans and policies to transition our economies away from fossil fuels to clean, non-polluting energy. China's commitment will also help it to reduce its over-reliance on coal, which is responsible for nearly three-quarters of its CO2 emissions.
NRDC has been working in China to help the country to transition to cleaner energy, including through its Coal Consumption Cap Project, which is developing recommendations for implementing a national coal cap target and policy in the next Five Year Plan to be released in March 2016, our Demand Side Management utility energy efficiency program and Clean by Design program, which focus on expanding energy efficiency in industry and the power sector, and our Sustainable Cities program, which is promoting non-motorized transportation systems including walkable cities and more efficient and livable cities and buildings. We look forward to helping both countries to implement the commitments and goals they announced today.
This blog was coauthored by NRDC China Climate and Energy Project Director Alvin Lin.