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Progress on Climate Change in China

by | July 3, 2018

Progress on Climate Change in China

July 3, 2018

Climate change in China is a widely talked about problem. China burns half of the world’s coal supply every year, and over 25% of the world’s climate pollution originates in the country, however in the last decade the Chinese government, with growing support from its population, has been taking drastic measures in an attempt to reducing these numbers.

The problems of pollution and climate change have been present both in China and in the world for decades, but it was not until 2008 that there was a definitive shift in the attitude of the public toward climate change in China. This turning point has been attributed to the fact that on the eve of the Spring Festival in 2008, rare freezing temperatures and heavy rain nearly paralyzed the entirety of southern China. This was the push that the population needed to relate the impacts of climate change with a direct negative effect on daily quality of life. Since then every extreme weather event in China has attracted attention and discussion, especially with the rise of popular social media platforms such as WeChat and Weibo. These events range from a particularly bad case of smog in 2011, in which flights were grounded and children hospitalized, to Typhoon Hato in 2017.

Awareness of the issue, however, has not led to immediate alleviation of many of the problems related to climate change in China. Though the nation had declining CO2 emissions between 2014 and 2016, signaling a promising future, emissions rose in 2017 as industries had increased demand for coal, oil, and gas. Despite this recent rise in CO2 emissions, an analysis of China’s policies and actions indicates that the government is committed to the effort to combat climate change.

 

The Paris Agreement

China ratified the Paris Agreement, an agreement within the United Nations Framework Convention on Climate Change, on 3 September 2016. This agreement has the central goal of limiting global average temperature increase to below 2 degrees Celsius and as close to 1.5 degrees Celsius as possible. Within the agreement, each country determines, plans and reports its own contributions to mitigate global warming. With current policies, China is well on track to meet or exceed its 2030 Nationally Determined Contribution (NDC).

 

Specific Goals to Reduce Climate Change in China

In 2009 China announced plans to cut its carbon emissions by 40-45% relative to GDP growth by 2020, compared with 2005 levels. Then, in 2014, the government stated it wanted carbon-emission levels to peak around 2030, after 2030 the emissions in China will not be allowed to rise any higher. The government also stated that they want to move this date forward if possible.

According to the 13th Five Year Plan, the Chinese government also plans to restrict coal consumption so that it makes up a maximum 58% of national energy consumption by 2020. These larger goals are coupled with goals for specific industries, such as plans to make electric vehicles account for 12% of sales in China by 2020.

China has been fairly successful in its efforts to reach the goals set to manage climate change in China. It reached the 2020 carbon emissions target three years ahead of schedule, and in 2017 Beijing recorded its biggest improvement in air quality in the last nine years. The air quality underwent a nearly 20% improvement as measured by the average concentration levels of hazardous breathable particles in the air. The average level of pollutants in the capital have also fallen by about 35% when compared to 2012 recordings

 

Reforms within the Chinese Government

Since his election in 2013, Xi has repeatedly stated that the environment must be prioritized in China’s pursuit of economic growth. During the 19th National Congress of the Communist Party of China, in October 2017, Xi used the phrase: “Building a Beautiful China” to signal once again that economic growth must go hand in hand with environmental and climate protections.

One way that this sentiment has been translated into action is the newly established Ministry of Ecology and Environment (MEE), which will have a staff of 500 and will take on the following functions:

  • Climate change and emissions reduction policies, currently under the National Development and Reform Commission (NDRC)
  • Underground water pollution regulation, currently under the Ministry of National Land and Resources
  • Watershed environmental protection, currently under the Ministry of Water Resources
  • Agricultural pollution control, currently under the Ministry of Agriculture
  • Marine conservation, currently under the State Oceanic Administration
  • Environmental protection during project implementation, currently under the State Council’s South-to-North Water Diversion Project Construction Committee.

With the establishment of the MEE it is for the first time that a single department will regulate emissions and pollution. This makes it easier for the government to truly reduce emissions and limit climate change in China.

 

Carbon Emissions Market

Another policy pursued by the Chinese government with regards to carbon emissions is the launch of the nationwide emissions trading scheme (ETS) in December 2017. The ETS was planned by the National Development Reform Commission (NDRC) and will overtake the EU’s carbon market to become the world’s largest. Under the ETS, polluting plants must hold permits for every unit of CO2 they emit and can sell surplus allowances if they are able to significantly reduce emissions. The scheme will be piloted in China’s power sector with around 1700 companies, as this sector accounts for 46% of China’s carbon dioxide emissions, but will eventually expand to include the chemical, building materials, and aviation industries, to name a few.

 

Investments in Clean Energy

Beyond regulating existing polluters, the Chinese government has made significant investments into clean energy sources in order to limit climate change in China. In the current Five Year Plan, the government committed to invest $360 billion into renewable energy production and research. This will increase the number of green energy jobs in China, which currently has the highest number of such jobs in the world with 3.5million people working in green energy.

There have been huge investments in solar energy in China, which as of May 2017 hosts the world’s largest floating solar facility. This 40-megawatt facility was built by Sungrow Power Supply Co, with support from the local government, indicating that there is and will be significant cooperation between clean energy businesses and the government. China is also home to the Longyangxia Dam Solar Park, which has the capacity for 850 megawatts of power, which is enough to power 200,000 households. The NDRC announced in 2017 that the capacity of solar power in China would be increased by five times with 1 trillion Yuan of funding by 2020. Due to such intensive investment from the government, China became the largest generator of solar power in 2016.

Other measures that the government has taken to encourage the clean energy sector in China are incentives such as free land and low interest rate loans to businesses in the green energy sector. The Chinese government also has incentivized the purchase of new energy vehicles by offering subsidies and low interest loans to consumers.

 

Business Opportunities

The battle against climate change in China also comes with opportunities for businesses. A recent MIT study published in April 2018 refutes the argument that a pro environmental protection policy is necessarily at odds with economic development. The study in the journal Nature Climate Change shows that a pro environmental protection policy and its related reduction in air pollution massively reduces healthcare costs. It can prevent up to 160,000 deaths and $534,8 billion in healthcare costs by 2030.

Additionally, clean energy systems now regularly outperform fossil fuels in open, large-scale energy supply auctions. This competitiveness makes a strong case for a global transition to clean energy and demonstrates that it is not only environmentally friendly but also potentially very lucrative to transition into the clean energy sector.

Finally, China’s move away from coal will have significant consequences for the rest of the world. As the world’s largest population shifts toward clean energy, many other nations will likely be pressured both politically and economically to follow suit. This is one other reason the Chinese have invested so intensely in domestic clean energy companies and will continue to do so. As the domestic clean energy market matures even more, China will seek to export in promising world markets for areas such as electric vehicles, solar panels, and wind turbines.

 

If you have any further questions about this topic, or about how to take advantage of these opportunities in China, please reach out to us at info@1421.consulting.

What happened in the year 1421?

From 1421 to 1423, during the Ming Dynasty of China under Emperor Zhu Di (朱棣) the fleets of Admiral Zheng He (鄭和), commanded by the Chinese captains, discovered Australia, New Zealand, the Americas, Antarctica, the Northeast Passage; and circumnavigated Greenland.

Due to this endeavour we can conclude that “1421 is the year that the Chinese discover the world”.