China surged past the United States to become the #1 carbon emitter in 2006. Indeed, although comprehensive national data are only available through 2012, China’s annual CO2 emissions have probably been at least twice those of the U.S. since 2013. That’s enough to account for nearly 30 percent of all annual global emissions of carbon dioxide. And although the United States’ cumulative emissions and attendant responsibility for global warming remain significantly greater, China is on course to surpass the U.S. on that historic metric in just a few decades.
The announcement in November 2014 of a U.S.-China agreement to curb greenhouse gas emissions was thus both a surprise and a potential milestone, shattering, perhaps, the “alliance of denial,” as the New York Times once termed it, by which the two nations used each other’s inaction as a pretext to postpone action on climate. The pact committed China, for the first time, to cap emissions of greenhouse gases, with the turnaround to come no later than 2030.
Also in late 2014 and throughout 2015, reports began emerging that China’s coal consumption was plateauing and even declining, as suggested by the graphic further below, “Chinese CO2 Emissions to 2015.” An early and key source of this information was Greenpeace International’s coal campaigner, Lauri Myllyvirta. Apparent causes included a slowing of industrial output; addition of major hydro-electric and nuclear power capacity; displacement of coal-fired generation by gas, wind and solar; and increased energy efficiency. (Anyone interested in these developments should follow Myllyvirta on Twitter.)
Even more strikingly, a paper being published in March 2016 in Climate Policy forecasts that China’s CO2 emissions from fossil fuel combustion may peak as early as 2020 — a full decade before the cap target year. Moreover, rather than shooting past earlier benchmarks, emissions in 2030 would be 7% below the 2020 peak and even 1% under last year’s emissions, according to the forecast. Such a turnaround would exceed all but the most buoyant expectations that greeted the 2014 announcement and would raise the bar for the U.S. and the other 190 nations that submitted emission pledges at the U.N. climate summit in Paris in December.
This upbeat analysis comes from two of the world’s most prestigious climate think tanks: the Centre for Climate Change Economics and Policy, and the Grantham Research Institute on Climate Change and the Environment, both based in London. The authors are Fergus Green, a climate policy consultant from the London School of Economics; and Sir Nicholas Stern, director of the Grantham Institute and arguably the world’s most renowned climate economist. (We reported on their analysis in a March 9 blog post, China Emissions Will Peak Soon (If They Haven’t Already): New Study.)
Indeed, China’s cap pledge virtually ensured that its rate of emissions growth would begin bending downward before 2030, on account of the lead time needed to overcome the “inertia” built into the factors that collectively determine emission levels. Moreover, the commitment from Beijing conferred instant legitimacy on political forces within China favoring clean energy and seeking relief from relentless air pollution that kills an estimated 1.6 million Chinese a year — no small matter in a society that operates according to perceived political and cultural authority.
The 2014 announcement didn’t specify the policies by which China would actually bend and reduce its burning of carbon fuels, especially coal. (Our March 9 blog post has details.) This dirtiest fossil fuel has been the mainstay of China’s energy economy, not only in power generation but in industrial production and even provision of heat. Available data indicate that China’s coal use tripled in just 15 years and was as great as that of the entire rest of the world, and accounted for more than 60 percent of the country’s primary energy, i.e., half-again as much as China’s hydro-electricity, nuclear power, petroleum, natural gas, and wind and solar energy combined. By any measure, the relentless increase in China’s combustion of coal was both the engine driving China’s astounding economic growth and the single biggest cause of surging global warming emissions over the past quarter-century.
In March 2016, Vox’s Brad Plumer reported in an extensive post, The real war on coal is taking place in China right now, that “The most important global warming story over the past two years has arguably been China’s struggle to suppress its once-insatiable appetite for coal.” Using estimated rather than final data for 2015, and again with the caveat that energy and emissions data from China can’t be independently verified, Plumer presented a provocative chart from the Rhodium Group that indicates both a slowdown in primary energy use — from annual 9% growth during 2002-2012 to just 3% in 2013 and 2014 and 1% in 2015 — and a shift in the fuel mix from coal to less-CO2-intensive oil and gas.
The net effect is an apparent reduction in China’s CO2 emissions in 2015; this would be the first year-on-year decline in the nation’s modern history, and a possible herald of a seismic shift in the global emissions picture.
Also in March 2016, New York Times correspondent Edward Wong filed a story from Beijing, Statistics From China Say Coal Consumption Continues to Drop. The carefully worded article led as follows:
China has released new statistics indicating that it used less coal last year than in 2014, lending support to the view that the country, the world’s largest emitter of carbon dioxide, may have reached a peak in coal consumption.
That would be a boon for global efforts to limit climate change, since industrial coal burning is the primary source of greenhouse gases. The new data, released on Monday by the National Bureau of Statistics, said coal consumption had fallen 3.7 percent in 2015 compared with the previous year. It was the second straight year of decline, according to the bureau, which said coal use had dropped 2.9 percent in 2014.
Wong’s assertion that coal consumption fell 3.7% in 2015 matches that by Plumer, though their respective estimates for 2014 vs. 2013 are different: a 2.9% drop (Wong) and zero change (Plumer).
Frequent rumors notwithstanding, China does not administer any carbon tax. Seven pilot carbon cap-and-trade programs have operated in Guangdong, Shanghai and Shenzhene provinces, among others, and these paved the way for the September 2015 announcement by President Xi Jinping at the White House that China intends to inaugurate a nationwide cap-and-trade system in 2017.
Here’s how CTC senior policy analyst James Handley reported this development at the time:
China’s announcement last month that it will begin implementing a national cap-and-trade system for greenhouse gas emissions in 2017 is welcome news. Not only because it signals (again) that the world’s largest emitter may be starting to tackle global warming (and conventional air pollution), but because it tosses another shovelful of dirt on a longtime U.S. excuse for inaction.
Reports on China’s announcement nevertheless raised concern about whether China (or any government) can implement and enforce such a complex, opaque system. A decade in, the European Union’s Emissions Trading Scheme has proven only weakly effective. The EU has struggled to remedy numerous design and implementation flaws including a too-loose cap that has failed to induce a significant, persistent and rising carbon price, as well as international offsets that hold down carbon prices and whose environmental benefits remain maddeningly difficult to monitor and verify.
Moreover, the opacity of permit-based trading systems appears well-suited to China’s particularly corrupt form of “crony capitalism.” And another possible motivation for China’s choice of cap-and-trade over a transparent and easier-to-administer carbon tax is Beijing’s history of profiteering from questionable carbon offsets; these could expand if China can link with lucrative carbon markets in the west.
If China does proceed with cap-and-trade, it would be wise to build in a price floor to assure a clear minimum carbon price ― a “patch” that the EU has thus far failed to enact.
Related concerns suffuse a thoughtful analysis in the New York Times, China Faces Major Obstacles in Plan to Cut Greenhouse Gases, Experts Say. (The Web version’s headline was a somewhat watered-down, “Enacting Cap-and-Trade Will Present Challenges Under China’s System.” But the subhead pulled no punches: “With its heavy-handed interventions, poor statistics and corruption, China will need years to build a market that substantially cuts emissions, experts said.”)
Earlier, in late 2014, researchers at Resources for the Future led by analyst Clayton Munnings published a detailed analysis of three of China’s regional cap-and-trade pilots. Their report suggested that Chinese authorities face high hurdles in program design, information provision and political acceptability if the eventual national program is to put an effective “price on carbon” and actually constrain and reduce emissions.