At its address to the 75th session of the UN General Assembly (UNGA 75) last month, President Xi Jinping declared that China will ‘aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060.’
This announcement has surprised many in the international community but has been equally welcomed at a crucial time in the global fight against climate change. Below our experts share their views on what the announcement signals for the global low-carbon transition, multilateralism and China’s role in the world.
Although Covid-19 originated in Wuhan, China almost eliminated the virus as early as April. Since then, its attention has been focused on protecting public health and stimulating a rapid economic recovery – including spending a whopping $27.5 billion on the clean energy sector. According to the Energy Policy Tracker developed by ODI and partners, only Germany spends more. These numbers lend credence to President Xi Jinping’s recent pledge to pursue carbon neutrality.
China’s new commitments are no doubt partially informed by the scientific evidence on the catastrophic consequences of climate change. However, they are likely also shaped by the immense economic opportunities and geopolitical advantages of a low-carbon transition.
First, China has positioned itself as a leading manufacturer of green technologies, from electric vehicles to solar panels to wind turbines. It is therefore poised to meet growing global demand for cleaner technologies.
Second, China can reduce its dependence on energy imports through a savvy combination of expanding renewable electricity generation and electrifying transport, industry, heating and cooling.
China will therefore be one of the big winners in a global low-carbon transition – and not only because it will avert climate catastrophe.
China may have committed to its biggest industrial plan yet with the recent pledge to achieve carbon neutrality by 2060. It’s no secret that China began to engage with climate policy as a way to address domestic problems, in particular energy security concerns, and with the explicit goal of gaining an economic edge within the global economy.
This idea has propelled its renewable energy industry into a position of world dominance in the past 15 years. If seen in this light, the recent announcement is just another manifestation of China’s industrial policy over the years. The much criticised Made in China 2025 policy and the more recent High Quality Development model (article in Chinese) and New Infrastructure Plan (article in Chinese) are all iterations of the same idea to command the future global economy through low-carbon, high-tech, and information technologies.
Chinese ministries have estimated (article in Chinese) the investment to achieve carbon neutrality by 2060 stands at a massive $14.725 trillion (100 trillion renminbi) over the next 30 years, an average of $4.9 trillion per decade and $490 billion per year. To put this in perspective, the Marshall Plan was $135 billion in today’s value, the G20’s fiscal stimulus in 2008 amounted to $1.1 trillion, with China’s contribution at $586 billion, and the current global response and recovery to Covid-19 has reached $10 trillion. With such an ambitious level of investment, studies are already showing that China will benefit greatly from driving the global low-carbon transition in the next 30 years.
Other countries will need to step up their games if they don’t want to lose the race for a green prosperous future. In the case of Europe, while the European Green Deal has committed $1.17 trillion (€1 trillion) in the next ten years for low-carbon, resilient growth, more needs to be done in many areas, including on research and development (R&D), to keep pace with China. In the US, while parts of the economy are committed to a green future, the retreat from the Paris Agreement and continued investments in the ‘brown’ economy hamper the all-out effort needed to reap the benefits of the low-carbon transition.
President Xi’s pledge is an important contribution to global efforts to tackle climate change. It also provided Beijing with the chance to score a relatively easy diplomatic win, being used as further evidence that it is the US not China which seeks to upend current international systems.
Soft power victories aside, President Xi did not provide much detail on how China will reach net zero emissions over the next 40 years. As such, it will be critical to see what trajectory the country’s 14th Five-Year Plan (5YP) from 2021-25 sets not only for its energy mix, but also for lowering all greenhouse gas (GHG) emissions. China’s target covers carbon dioxide emissions, not other GHGs such as methane or nitrous oxide.
It is hoped that Xi’s pledge to peak emissions before 2030 means absolute limits on carbon emissions will be set in the 14th 5YP. To do so, it will likely outline already planned reductions in the use of coal, as well as an increase in renewables, hydro, afforestation, carbon capture technology, and enhanced electric vehicle and wind turbine production. The increased focus on the latter has already sparked concerns about a global ‘rare earths race’. Rare earths are key components in green technologies and China accounts for 80% of those mined. This demonstrates the geopolitical ramifications of China’s 2060 pledge go beyond diplomatic point scoring against the US.
The 14th 5YP is also likely to mandate the ‘dual circulation’ strategy as a medium-term goal. This seeks to boost China’s domestic consumption and simultaneously facilitate foreign investment and boost production for exports. How ‘green’ that consumption and production is remains to be seen.
This drive to increase domestic demand is linked to China’s ongoing urbanisation programmes, including targets to bring 100 million people into cities by 2020 and 70% of the population to live in cities by 2030. Cities contribute about 85% of China’s CO2 emissions, with urban residents emitting roughly 1.4 times more than rural inhabitants. For China’s climate commitments to have a meaningful impact, they will need to be truly mainstreamed through the 14th 5YP, in particular the ‘dual cirulation’ strategy and ongoing urbanisation polices.
Finally, in terms of Chinese politics, the 2060 timeframe is a savvy one. It provides the Chinese Communist Party (CCP) with the political flexibility for manoeuvrability within existing socioeconomic domestic objectives, such as the 2049 goal “to build a modern socialist country that is prosperous, strong, democratic, culturally advanced and harmonious.” One cannot help thinking that a more ambitious goal would have been to set carbon neutrality in line with the 2049 development target. But by choosing 2060, any risk of not achieving the politically sensitive 2049 goal is minimised. Realising it becomes something for the 20thand 21st Five-Year planners (2051-55/ 2056-60) to figure out.
President Xi Jinping’s announcement at last month’s UN General Assembly was an important moment not only for global climate policy, but also for multilateralism.
Xi’s speech addressed one of the EU’s three climate-related demands at the EU-China leaders’ meeting, held the previous week. The announcement was surely not a hurried reaction to the EU, but rather long in preparation with the venue – multilateral rather than bilateral – deliberately chosen. China has evidently already decided to move down that road, despite the massive task of transforming its domestic energy system.
Seeing the reports, my mind went back to January 2017 and Xi’s speech in Davos at the World Economic Forum. Delivered just as President Trump was inaugurated, the speech conveyed the tacit expectation of a US retreat from its post-1945 role. It signalled China’s readiness to take over as a global ‘hegemon’, meaning not simply the dominant power but also the primary guarantor of systemic stability, a global public good.
Xi confirmed that Chinese global leadership would be through multilateralism and its institutions rather than bypassing or attacking it. Four years on, expectation and ambition both amply confirmed by events, the passing of the leadership baton proceeds apace. It will accelerate if Trump wins next month’s election (but not simply reversed if he doesn’t).
But China’s leaders will also be acutely aware that while global hegemony brings benefits to the leader, it carries foreign policy costs and responsibilities too: public goods must be paid for. So China’s inaction on a second EU demand, to end financial support for coal-fired power plants abroad, evidently in the Belt and Road Initiative (BRI), is just as important to its aspirations for global leadership. Unless China moves on this, the gains – for climate and for multilateralism – from its domestic carbon neutrality promise could be lost.
If achieved, China’s carbon neutrality would lower the projected rise in average global temperature by an estimated 0.2 to 0.3°C. Under currently submitted Nationally Determined Contributions (NDCs), temperatures are set to increase by 2.7°C by 2100. This commitment alone would represent 25% of the climate effort needed to keep the average global temperature rise within the 1.5°C Paris Agreement target, if everything else remains constant.
A decade ago, at Copenhagen, China made ambiguous promises to decrease CO2 emissions by continuing business as usual (and said it achieved this). So, it is not the first time China has announced it will decrease domestic CO2 emissions.
Historically, China has been part of the ‘G-77 + China’ and ‘BASIC’ group, and an advocate of maintaining the ‘common but differentiated responsibility’. But now, in the climate diplomacy landscape, China is positioned as a fast-growing economy that developing countries may want to emulate.
It is also a country that, historically, did not contribute as much to CO2 emissions but that is committing voluntarily to domestic mitigation efforts. To make matters more complex, China has also provided large sums in climate finance to developing countries while pursuing fossil fuel energy investments in Belt and Road Initiative (BRI) countries.
At present, China sits at a crossroads. Will it pursue low carbon policies domestically while outsourcing its emissions in overseas development corridors? Or will it realign overseas economic policies with domestic low carbon commitments, and transform climate ambitions for emerging economies? Time will tell whether this represents a change in climate diplomacy dynamics and coalitions for emerging and developing countries.