BOFIT Weekly Review 2015/45
China sets a low bar ahead of Paris climate conference
With the Paris climate conference set to begin at the end of November, China revealed its climate targets: reducing of carbon dioxide emissions from at the latest 2030 onwards, a reduction in CO2 intensity (CO2/GDP) of 60–65 % from the 2005 level and an increase in the contribution of renewable energy sources to 20 % of primary energy consumption by 2030. The goals are considered relatively modest and easily achievable for China. At their recent meeting, Chinese president Xi Jinping and French president François Hollande agreed to review their climate goals at five-year intervals. As China’s environmental problems have become a hot topic in domestic politics, emission targets also provide political cover for China’s leaders.
In addition to earlier announced emissions targets, president Xi announced during his visit to the United States in September that China would introduce a nationwide emissions-trading scheme by 2017. When implemented, China’s emissions-trading scheme would become the world’s largest. Experimentation with emissions-trading schemes has been conducted in a number of Chinese cities, but their results have hardly been impressive. China has also promised to provide $3 billion to support clean energy production in less-developed countries.
The now-concluding 2011–2015 five-year plan called for a reduction in CO2 intensity of 17 % from the 2010 level and an increase in renewable energy to 11 % of primary energy consumption. The World Resources Institute estimates that China is well on track to meet its targets. Already last year renewable energy accounted for over 11 % of energy production.
China is the world’s biggest polluter. Coal is the largest source of China’s CO2 emissions and still represents about two-thirds of primary energy consumption. Coal production has fallen this year, in part due to the economic slowdown and structural changes in the economy. China hopes to replace coal with other energy sources such as natural gas, nuclear and renewables.
According to the REN21 Global Status Report, China had the world’s largest renewable energy production capacity (a quarter of global production capacity) last year and China invested the most in renewable energy sources. Over half of China’s renewable energy last year came from hydropower and about a quarter from wind power.