Is China Starting to Strategically Pivot on Environmental Affairs?

Photo by Andreas Habich

Many Chinese policy experts have expressed optimism about China’s potential to shift gears towards a sustainable economy before it is too late. The country’s centralized government wields a much greater level of executive control over its population and resources than most Western governments, and is relatively uninfluenced by public opinion. As a result China is uniquely set up to fulfil its economic priorities – which appear to be pivoting towards scaling renewable energy.

Peggy Liu, Chairperson of the Joint US-China Collaboration on Clean Energy (JUCCCE), described the Chinese bureaucratic structure as a multinational corporation. “So it has a CEO, a chairman. It has a board, the State Council. It has branch managers in every province. And each of those branch managers have advisory councils and international advisory councils. We have a business plan with KPIs, key performance indices. That’s the five year plan.”

This corporate-like government structure is remarkably efficient, meaning that nation-wide changes can take place relatively quickly. From an environmental standpoint, this efficiency is perhaps best exemplified by the expansion of smart grid technology, introduced by the JUCCCE in 2007. Since then, China’s smart grid industry – which includes ultra-high voltage (UHV) projects, renewables and smart electricity meters – has grown to be worth over 80 billion yuan ($12.5 billion USD).

Moreover, over the past year, China has declared multiple ambitious goals to green its economy. Most notably, Xi Jinping pledged for carbon neutrality by 2060, which is set to be the most impactful climate policy ever made. If fulfilled, this goal could reduce global warming projections by up to 0.3°C. The pledge also commits to reaching peak carbon emissions by 2030. In light of recent commentary from the state-run Xinhua News Agency emphasising that coal produces the most carbon dioxide emissions during the electricity generation process, Although it may seem superfluous,the directness of the pledge demonstrates a recognition of the scale of the issue regarding coal from the Communist Party.

By contrast, at this year’s COP26, China became the cause of more than a little disappointment for their role as one of the main negotiators behind a last-minute change to the wording around coal usage. The original phrasing, which called for a total “phase out” of coal worldwide, was swapped for the less definitive “phase down”.

However, China’s reluctance to commit to a total eradication of coal usage at COP 26 appears to have been based more on logistics and timescale than a disregard for cutting emissions. Coal has fuelled the construction of the massive infrastructure developments needed to accommodate the mass influx of people moving to cities, and the 243 million more cars which have taken to the roads since 2005. The issue, therefore, is a complex one: as coal-fired power plants make up the majority of the country’s energy infrastructure, transitioning to a renewable-based power system will be a lengthy and expensive – though absolutely imperative – process.

According to Climate Watch, China overtook the United States to become the world’s biggest net emitter of greenhouse gases in 2005 (although per capita emissions have remained higher in the US). It has retained this status ever since, largely due to coal burning. And, with the onset of Covid-19, regional authorities attempted to stimulate the economy by relaxing the permit requirements for new coal power plants. As a result, new Chinese coal plants accounted for more than 75% of the total coal power capacity established worldwide in 2020, according to the Center for Research on Energy and Clean Air.

China’s 14th national Five Year Plan, which was finalized early this year, did not include a cap on domestic carbon emissions. Instead it called for emissions intensity (a measure of CO2 emissions per unit of economic wealth) to decrease by 18% during the next five year period. Xi Jinping announced that the country would only begin to phase-down coal consumption during the next five-year period, which begins in 2026. However, former Australian Prime Minister and current President of the Asia Society Kevin Rudd is optimistic about China’s short-term outlook.

“If I’m looking carefully at the internal content of the 14th Five-Year Plan, which governs China for the next five years, starting from effectively March this year, it is taking China into a more renewable, less carbonised future, not at the pace which [people] would want, but – in terms of strategic pivot points – better than we’ve seen with the previous five year plan,” he said. “And, frankly, better than at any time since I first started dealing with the Chinese on climate in the celebrated conference in Copenhagen in 2009.”

Despite the fact that China’s domestic coal power production shows little sign of slowing down, there have been major positive shifts in terms of foreign investment policy. Not only is China currently the world’s biggest producer and consumer of coal, it was also – for a period – the leading foreign investor in fossil fuel development, mainly through its multinational Belt and Road Initiative (BRI). Prior to this year, an estimated 60% of BRI energy funding went towards developing coal power abroad, but no investments went towards coal projects during the first six months of 2021.

Solidifying this commitment to reducing coal impact, President Xi, during an address to the UN General Assembly before COP 26, declared that “China will step up support for other developing countries in developing green and low carbon energy and will not build new coal-fired power projects abroad.”

The shift cannot come too soon: China is already experiencing much of the fallout of pollution and climate change, and hardship caused by environmental degradation naturally contributes to social unrest and protests. In 2020, the city of Hotan in Xinjiang province was listed as the most polluted city in the world in terms of average air quality, and data from the National Climate Center has shown that sea levels and average temperatures are rising faster in China than the rest of the world. Major coastal cities like Shanghai are particularly at risk if global warming exceeds the 2°C mark, meaning that an estimated 43 million people are living in areas imperilled by total submersion. The urgency of the climate crisis will no doubt accelerate the shift in China’s priorities, away from economic advancement at any cost and towards a sustainable long-term vision.

This transition has already begun to materialize, in the form of technological advancement, government restructuring and redirected investments. While these changes may seem sluggish to the outside observer, they represent groundbreaking progress for a nation as large as China, which is still classified as a developing country.

“Now the world’s biggest polluter – if you judge China just at that one single point, then it’s going to be hard to judge Western countries well, the ones that started the Industrial Revolution,” said Peggy Liu. “But if you judge China on a trajectory and the amount of intent and investment and will power and experimentation that it’s put towards going green, then China is the country that is going green at the fastest scale.”

Ultimately there is no benefit to be gained from countries pinning blame on each other. Solving the various environmental crises we currently face requires strategic international collaboration, and China’s singular influence on global emissions gives them enormous potential to lead positive environmental change.

Sita Bates for Times Media Mexico
The Yucatan Times
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