(The opinions expressed here are those of the author, a columnist for Reuters.)
LAUNCESTON, Australia, Sept 24 (Reuters) - Chinese President Xi Jinping has done the easy part of changing the path of the world’s biggest polluter to become carbon neutral in setting a target 40 years in the future.
Now comes the much tougher part of taking costly action today, and changing an entrenched mindset of building fossil fuel energy systems in the world’s most populous nation.
Xi told the United Nations General Assembly on Sept. 22 that China aims to be carbon neutral by 2060, and achieve a peak in emissions prior to 2030.
However, Xi didn’t offer much in the way of detail as to how this would be achieved, opening his government up to criticism that a target some 40 years in the future is largely meaningless without immediate action.
China isn’t alone in receiving such criticism, with environmental activists and investors being critical of major oil and gas companies, as well as mining giants, that have also announced long-term targets without committing to much short-term action.
The problem for China is that it is still investing, or planning to invest, vast sums of money in coal-fired power plants, coal-to-chemical ventures and other projects based on fossil fuels such as natural gas and crude oil.
These will be long-life assets of 30 to 40 years, and if they go ahead, it’s hard to see how China will be able to meet its target of carbon neutrality by 2060.
China had 1,023 gigawatts (GW) of coal-fired power capacity in operation as of July 2020, according to the Global Coal Plant Tracker.
It also had 98.5 GW under construction and a further 153.7 GW announced, pre-permitted and permitted, according to the database.
To put these numbers into perspective, the amount of coal-fired power under construction in China is more than half of the global total, while the operating fleet is half of the world’s generation capacity.
A total of 361 GW of coal-fired generation was retired between 2000 and 2020, according to the database, meaning that China is currently building more than a quarter of what the rest of the world closed in the past two decades.
Of course, there is no guarantee that all the planned new coal-fired units will be built, but so far China shows little sign of stepping back or changing direction.
Investment plans for eight major Chinese provinces, which account for half of the country’s emissions, show that currently of the 6,200 billion yuan ($910 billion) earmarked for investment in energy and transport, some 35% is proposed for fossil fuel projects, just behind 36% for rail infrastructure, according to an article published on Wednesday on climate change website Carbon Brief.
Just 13% of the plans could be viewed as low-carbon, including renewable energies, nuclear, hydropower, electricity networks and electric vehicles, researchers Lauri Myllyvirta and Yedan Li said in the article.
MAJOR SHIFT NEEDED
Even for China’s carbon emissions to peak prior to 2030, a radical shift in energy investments will have to take place.
This means that Beijing will have to enforce the changes upon the provinces, which have been all to used to build carbon-intensive projects as part of stimulus efforts, first to recover from the 2008 global financial crisis and now to boost the economy after the hit from the novel coronavirus pandemic.
The upcoming 14th five-year plan, due to be released next year, provides the opportunity for such a reset of policies, but the changes will have to be radical and expensive.
Fossil fuels currently account for about 85% of China’s total energy mix, with renewables making up the remaining 15%. Those percentages would likely have to switch around by 2060 to achieve carbon neutrality.
It’s likely that if Beijing does seek to deliver on Xi’s promise, then a multi-layered approach will be needed, with massive investment in renewable generation and battery storage, a switch to electric vehicles, switching manufacturing to electricity, especially in steel, and employing new technologies such as hydrogen and carbon capture.
But perhaps the most important thing to watch is whether China starts to cancel its coal-fired building plans and replace them with cleaner technologies.
None of this will be easy, but if China does undertake such a venture, it will provide a boost to producers of the commodities needed to switch to renewables and electricity.
Battery metals such as lithium, cobalt and nickel are obvious winners, but so are copper, iron ore (assuming a cleaner way to make steel is developed) and emerging producers of green hydrogen. (Editing by Christian Schmollinger)
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