China and Climate Change: What’s Next?

When global leaders meet in New York City on September 23 for the United Nations Climate Summit, the world will be looking to China for leadership. As the world’s largest emitter of greenhouse gases, it may seem counter-intuitive that China is now being seen as a climate change leader—and not as the obstacle it was accused of being following the watershed Copenhagen talks less than five years ago. However, since that landmark moment in 2009, China is following through to implement its commitments on climate change in a number of ways.

China’s Copenhagen commitment to reduce carbon intensity 40 to 45% from 2005 levels by 2020 was made legally binding through its 12th Five-Year Plan (2010-2015). To ensure the country could hit this target, China effectively adopted a “double cap” in terms of targets to reduce energy and carbon intensity by 16 and 17%, respectively, and increasing the share of non-fossil energy to 11.4% of the overall energy mix. Seven emissions-trading pilot schemes introduced over the last two years make China the second largest carbon market in the world, after the EU Emissions Trading Scheme. The government then announced in late August that a national emissions trading scheme would be launched in 2016, making China’s market the largest in the world. Experts and those close to the policy process have recently hinted at China’s potential to specify a year in which coal consumption will peak and then decrease thereafter. In addition, there is hope that China may adopt an absolute emissions reduction target s opposed to its current goal of reducing intensity.

But can China follow through on its commitments? Implementation is always a critical question in a country that relies on a top-down, decentralized mode of environmental governance. So far, progress toward energy and carbon goals are not optimistic. In May, after looking at 2011-2013 data, the State Council announced that the “trend is very grim.” By August, however, Premier Li reported that the country had reduced its carbon intensity by 5% in the first half of the year—the greatest reduction ever achieved. To help ensure that the provinces will meet the carbon intensity reduction targets by the 2015 deadline, the government announced August 15 that, for the first time, it would include the carbon intensity reduction targets as part of provincial leaders’ cadre responsibility system. Although it’s unclear how much weight meeting the targets will carry in each leader’s evaluation, the targets’ inclusion is nonetheless critical as a top-level signal of the government’s emphasis on cleaning up China’s air.

The emissions trading pilots have also experienced shaky beginnings. Overallocation of permits threaten to undermine the trading schemes’ credibility. In particular, China’s ability to launch a national scheme that won’t fall victim to the price collapse experienced in the E.U. is questionable. It will be a big leap for China to expand from the pilots, which currently only cover 1,115 metric tons of CO2 equivalent (MtCO2e)—a fraction of China’s overall emissions (around 8,300 MtCO2e annually). Despite these hiccups, China will certainly be a country to watch at the U.N. Climate Summit. Although President Xi Jinping will not attend in person, Zhang Gaoli, first-ranked Vice Premier, will represent China at the Summit. Xie Zhenhua, Vice Minister of the National Development and Reform Commission and China’s policy leader on climate change matters, will also be present. Without Xi’s presence, we cannot expect major breakthroughs, but instead incremental steps that will get the world closer to a new global climate deal next year in Paris. [This entry was amended on Sunday, September 21, to reflect more fully China's representatives at the Summit—The Editors]

In advance of next week’s U.N. Climate Summit in New York, China’s State Council today approved a new National Plan for Climate Change (2014-2020). While the full text of the plan is not yet available online, it appears to be designed to help China meet the 2020 commitments it made in 2009 in connection with the Copenhagen climate negotiations. In addition to speeding up China’s efforts to develop a national carbon trading market, which would be the world’s largest, the national plan also calls for capping 2020 emissions from “high carbon sectors” like cement and steel at 2011-2015 levels.

At the Climate Summit next week, Zhang Gaoli, the Vice Premier in charge of China’s climate policy, is expected to announce China’s policies, actions, and achievements for tackling climate change after 2020. Angel Hsu makes an important point that regardless of what commitments China makes, implementation will continue to be difficult. Yet a number of new developments since Copenhagen can and are giving China new motivation to address climate change decisively, as well as new tools to strengthen implementation.

The most important new motivation, of course, is China’s worsening air pollution, which is not only responsible for an estimated 1.2 million premature deaths a year, but is also threatening China’s social stability. The State Council’s National Clean Air Action Plan, released in September 2013, contains a number of measures that will also help to cut carbon emissions, including limits on coal use in three key regions. In order to cut smog, China is also considering a national cap on coal consumption, and announced last week that it will restrict the production, consumption, and import of coal with high sulfur levels. Yet not all measures to cut pollution will reduce carbon emissions, and China’s coal industry is still pursuing ambitious plans for coal-to-gas projects that could result in much higher carbon emissions. China also announced this week that large power plants will be exempt from restrictions on the use of low-quality thermal coal, a sign of the continuing power of China’s state-owned utilities.

Another important motivation may be new research by the International Monetary Fund and the New Climate Economy Project demonstrating that strong climate action can facilitate economic growth. More specifically for China, a recent report by the World Wildlife Fund shows that by embracing conservation measures and renewable energy, China can transition to an 80% renewable electric power system by 2050 at far less cost than continuing to rely on coal. As a result, China’s carbon emissions from power generation could be 90% less than currently projected levels in 2050 without compromising the reliability of the electric grid or slowing economic growth.

Finally, China has begun to realize that open information and public participation are essential to strong environmental implementation and enforcement. China’s newly amended Environmental Protection Law and draft amendments to its Air Pollution Prevention and Control Law put powerful new tools into the hands of environmental officials and the public, which can be used not only in China’s “war on pollution,” but also to help meet its climate commitments. As Angel said, China is certainly a country to watch.