BREAKING: ‘First Blueprint’ Lays Out China’s Path to Carbon Neutrality

China would rely on a massive increase in solar, nuclear, and wind capacity while cutting its coal consumption 96% between 2025 and 2060 under a “first blueprint” for fulfilling the carbon neutrality target unveiled by President Xi Jinping at last week’s United Nations General Assembly.

The roadmap for what Bloomberg Green calls “the most ambitious climate goal the world’s ever seen” was released yesterday by the government-affiliated Institute of Energy, Environment and Economy at Tsinghua University in Beijing. It shows solar capacity growing by 587%, nuclear by 382%, wind by 346%, bioenergy by 100%, and hydropower by 50% by 2060. Coal consumption falls by 96%, gas by 75%, and oil by 65%.

In an earlier dispatch, the news agency said China is considering incorporating the 2060 target in its next five-year plan for 2021-2025.

The plan also has China increasing its share of non-fossil energy to 20% by 2025, five years ahead of schedule. “Chinese renewable energy companies have soared in the past few weeks on the possibility,” Bloomberg says.

The news report makes no mention of energy efficiency targets that might cut into the projected need for new electricity supply.

“If [the plan is] realized, China’s nuclear power generation is set to quadruple between 2025 and 2060, which will probably mean enough plants to more than double the size of the U.S.’s current fleet, which is the world’s largest,” Bloomberg writes. “Investments needed to meet the 2060 target could total ¥100 trillion (US$15 trillion) over the next 30 years.”

At the same time, “the elimination of coal power would call into question dozens of power plants currently under construction. They would be rendered obsolete in 30 years, typically the time needed to recoup capital costs on them.”

At least one observer said the country could do better, both economically and environmentally, by moving faster. “While this proposal might get China to carbon neutrality by 2060, it would be better for the economy and the environment if emissions would decline more rapidly,” ClientEarth China representative Dimitri de Boer told Bloomberg. “China has an opportunity now to boost the strategic sectors of the future, such as renewable energy, hydrogen, electric vehicles, green buildings, and smart grids.”

Before yesterday’s news, a wave of analysis had framed Xi’s dramatic statement last week as good politics, good policy, and an economic boon that will make the country richer—notwithstanding present-day policies that still favour fossil fuels.

Many observers cast China’s promise as the most important global climate policy announcement in years. Richard Black, director of the UK’s Energy & Climate Intelligence Unit, agrees, citing three main reasons: the direct impact on global emissions, the effect of China’s action on climate diplomacy, and the consequences for markets and investment.

With China accounting for about one-quarter of global CO2 emissions, “clearly there’s no hope of delivering the net-zero emissions global economy around mid-century—the path that gives humanity an even chance of staying under the 1.5ºC ‘danger level’ for global warming—unless China comes to the party,” he writes. “Until now, China hadn’t put forward any long-term target, let alone one that takes it towards national net-zero. Now it has,” and Xi also hinted at shorter-term action with his reference to a CO2 emissions peak before 2030.

“A bigger problem with Paris Agreement compatibility lies in President Xi’s silence on other greenhouse gases,” Black adds. “Even if China emitted no CO2 at all, its emissions of those other gases, such as methane, would place it in the top five nations currently warming the planet.” But even with that point unaddressed, he echoes Climate Action Tracker’s conclusion that the announcement is the biggest single advance since the 2015 Paris Agreement.

Xi’s announcement also cements an emerging climate alliance between China and the European Union that will be the “only game in town”, Black says, unless Democratic presidential nominee Joe Biden moves into the White House in January. It will also shape global investment, since China is a “market mover like no other” due to the sheer size of its economy.

“Translated into action, this net-zero commitment would mean China reducing coal, oil, and gas use faster than expected, building renewables, electric cars, and perhaps nuclear reactors faster, switching international investments from coal to clean faster, going big on negative emissions tech earlier,” he writes. “All of which would pretty clearly shift the goalposts for stacks and stacks of companies and investors around the world.”

On China Dialogue, seasoned U.S. climate diplomat Vance Wagner has his own six reasons to greet the announcement as huge news: It reveals that climate action is still a priority for the country’s leader, the targets are unilateral and unqualified, the announcement combines short- and long-term actions, the carbon neutrality target is “materially significant on a global scale”, and the promise is “politically meaningful” at home and internationally.

“China currently burns half the world’s coal, so the announcements send a clear—and new—signal to domestic stakeholders in China that the coal-dominant era is ending, and that President Xi’s vision for a prosperous China will be driven by green and low-carbon development,” writes Wagner, the Energy Foundation’s Vice President, Strategic Partnerships, China, who previously served as China Counsellor in the State Department’s Office of the Special Envoy for Climate Change.

“Meanwhile, internationally, the announcement ratchets up pressure on other major emitters to update their nationally determined contributions (NDCs) and establish long-term carbon neutrality targets, while further isolating the Trump administration in its climate myopia,” he adds.

“The fact that President Xi Jinping is now taking advantage of White House absence of leadership is also not surprising,” observes former UN climate secretary and Global Optimism founder Christiana Figueres. “When there is a geopolitical vacuum of leadership then someone steps in.”

Wagner adds that China’s goals will be “immensely challenging” to achieve, the policies and pathways to make it happen still aren’t clear, and “the climate community—both within China and internationally—has a responsibility not only to keep asking these questions, but to support China to achieve (or overachieve) all its climate targets in a way that’s just and sustainable.” But “this week we celebrate this new momentum—for China, and for the global climate.”

That momentum will also be an economic win, for both China and the global economy, adds Hector Pollitt, head of modelling at Cambridge Econometrics, in a guest post for Carbon Brief. “China’s CO2 emissions would need to fall rapidly to reach net-zero by 2060,” he writes, and “the huge scale of investments required to do this would raise China’s GDP by as much as 5% later this decade, with a modest ongoing positive impact due to reduced fossil fuel imports.” Those investments “would not only drive dramatic reductions in its own CO2 emissions, but would also lower the cost of clean energy, creating a positive ‘spillover’ effect in other countries.”

Bloomberg Green climate columnist Gernot Wagner notes that China, still a net importer of fossil fuels, has already drastically increased its renewable energy manufacturing, so that it now accounts for two-thirds of the world’s photovoltaic panels and lithium-ion batteries and 45% of its wind turbines. He says an early indicator of how China will deliver on Xi’s promise will come in March, when the country’s National Development and Reform Commission releases its five-year plan for 2021-2025.

“Another important question is around the interaction of its carbon pledge at home with its Belt and Road Initiative abroad,” he adds. “China has already spent or pledged around US$575 billion under the BRI, almost half on energy projects, and a good portion of that on coal in other developing countries. Coal economics are changing everywhere, so these investments, too, might come to an end. But China could still be exporting pollution for years to come, locking in dirty infrastructure for decades.”

A couple of analyses took the announcement as a death knell for fossil fuels, with S&P Global calling it a “turning point” for fossil markets. “For oil and natural gas, this could mean China’s giant national oil companies are given a government mandate to divert resources toward decarbonization, which would change the landscape for petroleum markets permanently and complement the shift being driven almost entirely by oil majors,” the investment consultancy writes. Bloomberg opinion columnist David Fickling says the country’s renewables plan marks the crumbling of “coal’s last refuge”.

But only if the reverberations from Xi’s announcement can dislodge some well-established trends. Bloomberg Green warns that China’s immediate plans to set up the world’s biggest carbon market may be lax enough to “let coal plants keep polluting”. And on Carbon Brief, analyst Lauri Myllyvirta of the Centre for Research on Energy and Clean Air and freelance researcher Yedan Li point to hundreds of billions of dollars earmarked for fossil projects in China’s main energy-consuming and -producing provinces. After reviewing “major project lists” from eight provinces, they conclude that “if the investments go ahead, they would exceed spending plans for low-carbon energy three-fold.”