There has been a strong reaction to the announcement that China (the world’s largest CO2 emitter 28% of global emissions) will achieve net zero emissions by 2060 and the pressure this may place on the equivocal position which the US maintains on emission reduction.
The announcement by Xi Jinping was light on details about what net zero means in the mind of the Chinese government, but some of this will become clear when the next five year plan emerges. Some have been sceptical about the timing, to quote the New York Times:
“Pledging to do more on the climate could at least counterbalance the rising anger China faces in Europe and beyond over its record of oppression in Xinjiang and Tibet, its territorial conflicts in the Himalayas and the South China Sea, military threats toward Taiwan and a sweeping crackdown on Hong Kong’s autonomy.”
Undoubtedly their may be some short-term benefits from the announcement, but this is a major policy change, not a short term tactical ploy, so what are the reasons for it?
In my book Zero Carbon Our Choice, I set out the difficult decisions and the scale of change in moving from our current carbon economy to a net zero economy and how it affects all sectors of the economy, private as well as public and business. Democracies may struggle to achieve agreement to these changes in the timescale needed to achieve the target.
China has the advantage that it can make policy happen relatively quickly. A brief digression. A western visitor asked the manager of a Chinese steel mill how they could expand to justify the increased iron ore purchases they were discussing. The manager said there would be a new steel plant over there pointing at the neighbouring town. When asked what would happen to the town, he answered, we will move it. China has an advantage in achieving dramatic change quickly.
China suffers, like some other countries from poor air quality. Net zero is a way to tell the population that this will be sorted out.
Net zero by 2060 is a long time away, it is a major policy change, but its achievement won’t be clear for a long time. It does however provide a policy framework which only the Communist Party can achieve, and it will be undoubtedly branded in the same way as the economic leap which started in the eighties.
China holds a dominant position in the production of equipment for a net zero global economy. In solar panels and wind turbines and as the largest manufacturer of electric cars and buses and with a strong position in battery production. It is able to implement infrastructure projects like the Three Gorges dam. China can exploit this technological lead. It also has a dominant position in rare earth mining and has mining joint ventures around the world which ensure security of supply for its manufacturers.
As a form of soft diplomacy, this policy change plus its dominant position in supply will be very powerful.
The key signs about how serious China is on net zero will be in its policy on coal powered electricity generation. Given the life of a power station, it will need to start a moratorium on building coal plants in the 2020s and definitely by 2030. As this is a net zero pledge, it will be interesting to see how aggressive China is in using offsetting. Will it be just domestic or will China invest in offsetting elsewhere as well? What will the target for new trees in China be (it will have to be very big).
For all the reasons above the announcement makes sense and gives China a big policy to come out of the Covid era. China has the levers of power domestically to achieve it and the manufacturing sector which will benefit from an acceleration of investment in renewables. The devil will be in the detail. The interesting question will be how does the US respond and how does this affect the balance of power between China and the US?
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