Is China living up to its commitments of moving towards net zero? The government authorities – at the highest levels – have announced ambitious targets. “We aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060,” China’s President Xi Jinping told the UN General Assembly in September 2020. “COVID-19 reminds us that humankind should launch a green revolution,” he added.
This, of course, is not the first time that Xi Jinping announces his country’s commitment to fighting climate change. In the fall of 2017, President Xi Jinping had already reconfirmed the long-term targets for the energy system at the 19th Communist Party Congress and the commitment to the development of “ecological civilisation” as the main priority for China and as a precondition for a continuation of the economic development in China.
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With China accounting for 28% of global CO2 emissions, its carbon neutral pledge is fundamental to achieving worldwide net-zero emissions. Even without any further commitments from other countries. This means global heating could now be limited to around 2.35 degrees Celsius (4.23 degrees Fahrenheit) by 2100, which is 0.25 C lower than the expected rise, according to Hector Pollitt, chief economist at Cambridge Econometrics, a UK-based economic analysis firm.
But is China living up to this lofty goal?
Out of all the municipal bonds the government issued to get the economy going since the covid outbreak, only 15 percent of them went to sustainable low carbon projects. The Greenpeace report found that the lion’s share of COVID-relief bonds, some 90 percent, went to funding either general infrastructure projects or other traditional infrastructure, leaving greener transport, agriculture, forestry and waterways projects on the outside looking in.
This is unfortunate since for several years, China’s central government led by officials from the People’s Bank of China, the country’s central bank, has been touting green finance as one of the major remedies for tackling carbon emissions. Green bonds have been widely promoted, but have increasingly come under scrutiny due to a lack of transparency about whether the money raised from these bonds goes to green projects in the end or just filters into general operating budgets for local governments and projects.
A major problem is China’s commitment to supporting an existing coal industry which is already in place and knowledgeable in this field. Efforts need to be made to fund, restructure, and re-educate people working in this field into renewable and more sustainable forms of energy. Most coal-rich provinces still lack the green industrial chains and infrastructure to boost economic growth solely through green investment in the short term since local officials are more familiar with traditional industry and the economic development and jobs they create.
The irony is that China is the world’s largest financier and builder of both fossil fuel and renewables infrastructure worldwide. Of all coal-fired plants under development outside of China, one quarter, or 102 GW of capacity, have involved funding from Chinese financial institutions and/or companies. Coal-fueled plants are a major element in China’s Belt and Road Initiative and recently, there has been a general cry for China to “stop financing new coal power”, as it would “foster cooperation with western nations”.
However, COVID-19 has had a welcome side-effect: It has helped curb China’s investments on fossil infrastructure overseas, and its share of investment into foreign renewable projects had reached its highest-ever values. Unfortunately, these efforts seem to have been rolled back. It is now time to see how China responds and the actions they take going forward from here with some of the hottest recorded heat waves ever going on around the world.
Editor’s Note: The opinions expressed here by Impakter.com columnists are their own, not those of Impakter.com. — In the Featured Photo: effects of smog and pollution in Shanghai China. Featured Photo Credit: Ryan Chu