China’s renewable energy puzzle

December 5, 2021

 

In the wake of the COP26 summit, Chinese efforts to curb emissions and concretely commit to renewables have come under scrutiny as Beijing contends with a domestic energy crisis.

China emits more greenhouse gases than all industrialized nations combined, “but so far has only promised to peak those emissions by 2030 and achieve carbon neutrality by 2060,” said a Yahoo News report by Ben Adler in late October.

China recently became embroiled in controversy over its pledges to meet emissions targets, with many criticizing its lack of commitment at the G20 held October in Rome and the subsequent COP26 (U.N. Climate Change Conference) held between October and November in Glasgow.

Worsening China’s situation is that the country is in the grips of a domestic energy crisis and ramping up coal output to record levels. The government has had to “cut power to meet official energy goals, forcing factories to shut down” and hampering production, said a Newsweek report by Rebecca Klapper.

Factories were “idled to avoid exceeding limits on energy use imposed by Beijing to promote efficiency. Economists say manufacturers used up this year’s quota faster than planned as export demand rebounded from the coronavirus pandemic,” Klapper reported.

China’s energy consumption and industrial emissions have surged as manufacturers rush to fill foreign demand at a time when competitors elsewhere are still hampered by coronavirus restrictions. As a result, China’s economy is “more driven by exports than at any time in the past decade,” noted a September report published by the Macquarie Group. Yet, official energy use targets didn’t take that into account, economists Larry Hu and Xinyu Ji of the Macquarie Group wrote in the report.

“Prices have risen past the range of what China’s electricity industry can bear,” according to Li Shuo, a climate policy expert at Greenpeace in Beijing.

In October, Chinese Premier Li Keqiang “warned that the nation’s green transition needs to be underpinned by a stable supply of energy and called for an in-depth assessment of the power crunch before setting any short-term targets for reaching peak emissions,” reported Bloomberg.

The premier noted that coal, natural gas, and oil production are still crucial to the country’s success and security. At the same time, China is moving ahead with building renewable energy capacity, including a 100-gigawatt solar and wind project and a $440 billion nuclear energy initiative.

COP-out?

While many world leaders attended the COP26 in person, Chinese President Xi Jinping did not, sending a written statement detailing China’s position. Critics of Chinese energy policy in lieu of the climate goals put forth at the Paris Climate Accords, the G20 summit and COP26, cite the country’s reluctance to “pledge bigger commitments, which Xi Jinping’s administration said will only be possible with political concessions,” wrote Zoe Strozewski in a Newsweek article in November.

Despite “a surprise agreement with the U.S.” announced Nov. 10, President Joe Biden called China’s refusal to send representatives to COP26 “a big mistake,” according to Strozewski’s report. “The bipartisan agreement outlines that the two superpowers would work together to boost concrete action that would cut planet-warming emissions in the 2020s, a crucial decade. The pact also includes efforts to curb methane, a powerful greenhouse gas.”

Shi Yinhong, professor of international relations at Beijing’s Renmin University, told Newsweek that friction in bilateral relations complicates cooperation on climate change between the two countries. He explained that Biden had hoped COP26 would be “an important occasion for China and the U.S. to compete for global influence, ideology and image.”

Zhao Kejin, who teaches international relations at Beijing’s Tsinghua University, told Newsweek, “The U.S. wants Chinese cooperation in responding to climate change, but Beijing is also looking for changes in U.S. policy, including its support for the self-governing island of Taiwan, which China claims as its own territory.”

U.K. ‘s Prime Minister Boris Johnson described Chinese commitments to renewables as “substantial.” However, he joined the chorus of nations urging China to do more to curb emissions.

Crucially, China refused to commit to a “phasing out” of coal advanced at COP26. Instead, it only agreed to a “phasing down” of coal. That has cast doubt among participating delegations over whether they could meet the global emission targets by 2030 and beyond.

In a November analysis for the online magazine Foreign Policy, Melinda Liu wrote that despite Beijing “talking green for years, the road to renewables still looks pretty black. That matters because China is the world’s top coal consumer as well as its top producer.” Chinese officials, she noted, assert that the country’s “economy is still developing …and it isn’t fair for developed nations that have grown willy-nilly in the past to cramp Beijing’s development.”

Chinese foreign ministry spokesperson Wang Wenbin told the media: “It would take 71 years for the EU, 43 years for the U.S. and 37 years for Japan, all of which are developed economies, to move from carbon peak to carbon neutrality. However, China has set itself a time limit of only 30 years.” He maintained that developed nations bear “an unshakeable historical responsibility for greenhouse gas emissions during their 200 years of industrialization.”

Climate policy experts Morgan Bazilian and Dolf Gielen, of the Colorado School of Mines, told Yahoo News last month: “It is clear that coal, the most carbon-intensive fossil fuel, needs to be phased out fast, and doing so is critical to both the U.N.’s energy and climate agendas. Given that more than half of global coal is consumed in China, its actions stand out, although other emerging economies such as India, Indonesia and Vietnam are also critical.”

Going green

For all the misgivings over China’s recent recidivism concerning climate action, the country has made concrete commitments to green megaprojects as part of its energy mix for the foreseeable future.
Besides being the world’s biggest emitter of greenhouse gases, China also is “currently the world leader in total renewable energy capacity, holding 31% of the world’s capacity. In the midst of the regulatory crackdown in China, this industry has continued to perform,” according to a NASDAQ report published early November.

“China has acted swiftly in recent years to catalyze a transition to a cleaner economy and position itself as the manufacturer of a greener future,” wrote Sophia Wu last month for GreenBiz, an online specialized news portal.

According to a U.N. Environment Programme report, “Global Trends in Renewable Energy Investment 2019,” China has been the biggest investor in renewable energy over the last decade, spending nearly $760 billion between 2010 and 2019, compared to $356 billion by the U.S. The entire continent of Europe invested $698 billion.

“China not only leads the world in terms of total wind and solar energy installed — with a total of 288 gigawatts of wind energy capacity and 253 gigawatts of solar energy capacity at the end of 2020 — it also has positioned itself to be the primary supplier of the clean economy,” continued Wu.

According to Foreign Policy, 30% of the world’s wind turbine manufacturers are in China, and more than 70% of the world’s solar photovoltaics are made there. “China controls nearly the entire supply chain prior to final assembly of electric vehicles, and the technology to build new green economies is mostly produced in China. That’s bad for the United States,” wrote Sarah Ladislaw and Nikos Tsafos in Foreign Policy in October.

Wu noted that the move to control most of the clean energy supply chain is “just one part of China’s approach to this transition.” Other factors include having an entrepreneurial approach to testing economic initiatives, authoritative government structures to facilitate rapid action, and communicating the future to citizens. According to experts who spoke on a recent panel at this year’s VERGE 21 conference, that approach is driving the transition happening within China’s borders.

Novel approach

In addition to investing heavily in its clean energy infrastructure, China is taking an entrepreneurial approach toward climate innovation by running and scaling pilot climate finance programs. “In 2017, China launched five green finance pilot zones in Zhejiang, Jiangxi, Guangdong, Guizhou and Xinjiang provinces, as climate-friendly versions of China’s existing economic development zones, according to think tank Paulson Institute,” said the GreenBiz report.

The speed at which the Chinese government can work has been another key driver of the rapid transition toward sustainability, according to Peggy Liu, chairperson of the Joint U.S.-China Cooperation on Clean Energy (JUCCCE). JUCCCE, founded in 2007, promotes collaboration on green energy. Liu’s version of the “China Dream” (President Xi Jinping’s slogan for his campaign to rejuvenate the country) paints a picture of clean air and water, liveable communities, and an environmentally friendly lifestyle, according to the JUCCCE website.

Working with agencies such as Saatchi and Saatchi S, Ogilvy Green and Edelman, the JUCCCE “did workshop after workshop, literally drawing with pens and colored pencils on paper what the China Dream would look like, and we curated that to really embed images of sustainability into a future lifestyle,” Liu said. “You have billboards at subway stops and on construction walls, you have advertisements and commercials … and that builds this energy, this angular momentum, this vortex of people all helping, subconsciously, to make the China Dream come alive.”

These factors, combined with a massive amount of financial investment, “have enabled China to move toward its own sustainability goals and position itself as the supplier of the clean economy. If other countries also wish to achieve their nationally determined contributions under the Paris Agreement, they must rely on China’s clean energy manufacturing power,” Wu wrote for GreenBiz.

“I really want people to shift away from looking at China as the competition because there is no competition in this race. The only thing we should be thinking about is how we communicate and connect with China, in a way that is geopolitically palatable, where we create a new way for everybody to win,” Liu maintained.

Clear horizon?

According to climate policy experts Bazilian and Gielen, China’s push for a future entirely reliant on renewables will not be easy. “Notably, half of the Chinese coal plants are less than a decade old, a fraction of a coal plant’s typical lifespan,” the analysts said. “China has raised its climate commitments, including pledging to reach net-zero emissions by 2060 and agreeing to end financing of coal power plants in other countries, but its current pathway will not yield substantial reductions this decade.”

Optimists view the recent Sino-American climate declaration as a welcome signal of an “easing of tensions” so the world’s two largest emitters can work efficiently in tandem. “In areas of climate change, there is more agreement between China and the U.S. than divergence, making it an area with huge potential for our cooperation,” Xie Zhenhua, China’s top climate negotiator, said in an Axios article published November.

The agreement does not change any China or U.S. official emission targets or timetables. However, it aims at “speeding up each other’s emissions cuts during the 2020s, which is critical for ensuring that the Paris Agreement’s 1.5 degrees Celsius temperature target remains viable,” Axios reported.

“The big significance of this is geopolitical,” said Nick Mabey, chief executive of the climate think tank E3G, in a statement. He added the two countries have signaled they will end the war of words that marred previous engagements, according to the Axios report.

One thing is certain, if other countries are to meaningfully hold China accountable for keeping its pledges, they must lead by example. However, that may prove tricky as they must also not alienate the world’s second-largest economy and instead embrace its cooperation with as much diplomatic patience, collaboration, and resolve as possible.