How Will China Meet Its Climate Change Goals?

In September 2020, China’s President Xi Jinping made a big announcement: China would aim to reach peak emissions before 2030 and net-zero emissions by 2060. China had already pledged to have its emissions peak “around 2030” as part of its commitment to the Paris climate agreement of 2015. The net-zero emissions goal, however, was new and caught observers – even climate activists within China – by (happy) surprise.

The devil is in the details, however. The success or failure of these goals, particularly the net-zero emissions pledge, will be determined by the actual policies put in place. It’s one thing to announce in a speech that emissions will peak and then dwindle to almost nothing; it’s quite another, and a far more difficult task, to craft policies and incentives that lead to that result.

One crucial step in this regard will be the next five-year plan, through which China’s government sets economic and social targets. The five-year plans provide centrally determined goals that local governments use to make their decisions. When it comes to environmental protection, the five-year plans are critical, not only because of the specific targets set out on things like pollution, the energy mix, and emissions, but also because the amount of emphasis on economic growth determines how seriously other goals are taken. Put simply: If Beijing is demanding 6 percent GDP growth first, other priorities may be sacrificed to reach that goal, regardless of what the rest of the plan says.

The 14th Five-Year Plan will be officially approved by China’s National People’s Congress in March. This year for the first time China’s Ministry of Ecology and Environment will draft a separate plan on climate change in the coming months, alongside the usual plans for energy and the power sector. Another new addition will be a separate plan providing long-term goals out to 2035, when China should have “basically achieved” its goal of becoming a modern socialist country. All of these documents will give us a window into how China aims to achieve its climate goals.

While we won’t have the full five-year plan until after the NPC approves it, we can get some clues from the early proposals approved at the Fifth Plenum of the Chinese Communist Party’s 19th Central Committee, held in late October 2020. The first question, as noted above, is to what extent China will relax its previous laser-focus on economic growth. After all, China already declared victory in its long-standing goal of becoming a “moderately prosperous society” in 2020 – which included hard targets of doubling both GDP and GDP per capita from 2010 levels. That opens the door for looser economic growth targets in the next five-year plan, potentially allowing other goals – including on climate and the environment – to take place of precedence.

The Fifth Plenum was a mixed bag in this regard. The post-plenum proposals relaxed GDP expectations somewhat but not entirely. The new goal is for GDP per capita to match that of “moderately developed nations” by 2035, which would likely mean averaging between 4 and 5 percent GDP growth each year. There’s more wiggle room in that target, but meeting even the lower bound will be difficult, especially with an aggressive switch in China’s economic model to meet climate goals.

Accordingly, Chinese leaders aren’t pursuing much of a change in emission levels before 2035. By that year, “China’s carbon emissions will gradually decline in a state of stabilization after peaking, and there will be fundamental ecological and environmental improvements,” according to the Fifth Plenum proposals. As Wu Yixiu and Yao Zhe’s analysis for China Dialogue notes, that language pretty much precludes any major drop in emissions before 2035.

And there is still lots of room for China’s emissions to grow in the meantime. The country accounted for nearly a quarter of global energy consumption in 2018, and energy demand has only grown since then. China’s per capita energy consumption remains well below much of the developed world, at roughly 4,000 kWh per capita versus 13,000 for the United States. As living standards in China continue to rise, so will energy needs – and emissions.

With that in mind, there are several critical points to watch for in China’s new five-year plan. The first is whether China will set targets for absolute emissions or just for “carbon intensity,” meaning emissions per unit of GDP. This has been China’s preferred metric for years, because its rapid GDP growth has long meant that China could notch declines in carbon intensity, even while its absolute emissions were still rising. Given what we’ve seen so far, it’s likely China will stick to setting goals for carbon intensity as opposed to overall emissions, but doing the latter would be a major climate policy breakthrough.

The second thing to watch is the goal for China’s energy mix, which break down the role of various energy sources. With each five-year plan, the share for renewables has grown – it was set at 8.3 percent in 2010, but is expected to be at least 18 percent in the 14th Five-Year Plan, possibly more, in line with the ambitious targets set by Xi in September.

The role of coal in the energy mix will be a crucial piece for China’s emissions. Recent five-year plans have stipulated that the share of coal in the energy mix must drop. It’s currently at 58 percent, and the head of a foundation that does research for the five-year plans told the state-run China Global Television Network that the ratio should “go down to less than 50 percent in the coming five years, even lower.” In keeping with that prediction, an early draft proposal from the National Energy Administration recommended setting a goal for clean energy to account for at least 40 percent of the energy mix by 2030, which would by necessity put coal below 50 percent.

But keep in mind again that China’s energy consumption as a whole is still rising rapidly, so coal use could continue to grow even as its share of the energy mix declines. Essentially, if the pie keeps growing, a 50 percent slice in 2026 could still be larger in absolute terms than 58 percent in 2020. In addition to coal’s role in the energy mix, then, keep an eye on the limit for total coal use. Will it dip below the limit set in the previous five-year plan – indicating China’s commitment to an absolute decline in coal use for the first time?

China has had a rocky road on coal use to date – consumption peaked in 2013, dropped from 2014 to 2016, then rose each year from 2017 to 2019. And we already have some disturbing evidence that all it takes is economic turbulence to knock China off its environmental commitments. The COVID-19 economic recovery effort saw a surge of new coal projects approved as local governments rushed to pump stimulus money into their economies. According to the Global Energy Monitor, China’s new coal power generation capacity in 2020 was three times larger than the rest of the world’s combined. A definite commitment to lowered coal use in the five-year plan would force local governments to rethink that strategy, but would come at an economic cost.

China is well aware of the skepticism surrounding Xi’s September pledge. An op-ed in Xinhua, China’s state new agency, declared “China is a country that keeps its words.”

“The government has not underestimated the challenges of achieving ecological progress in the long term,” the article continued. “To achieve carbon neutrality by 2060, social, economic, energy and technological systems need to adapt and transform. It is important to see the push to go green as a source of growth rather than a drag on the economy.”

China’s foray into the electric vehicles industry is a good example. Beijing is backing the transition away from gas-fueled vehicles not only for environmental reasons, but because it hopes to see China dominate an emerging new industry. With that in mind, the final piece to watch in China’s upcoming five-year plan and 2035 blueprint is the amount of emphasis placed on green industries, from renewable energy to electric vehicles and beyond.

China – like nearly every country in the world – continues to prioritize its economy over environmental goals. The success of China’s climate commitments, then, will hinge on whether the government thinks it can achieve both goals simultaneously. If not, one will have to be sacrificed – and everything we’ve seen so far suggests it would be the Earth that takes the hit.