Xi Jinping's China
--- Prospects for Its Climate Change Policy ---

Takashi Sekiyama

1. Introduction

In September 2020, Chinese President Xi Jinping declared in his speech at the United Nations General Assembly: "We aim to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060 (Chinese Embassy in Japan, 2020)." This is Xi Jinping's 3060 target.

One year later, again at the UN General Assembly, President Xi reiterated this target and also stated, "China will step up support for other developing countries in developing green and low carbon energy, and will not build new coal-fired power projects abroad (Chinese Embassy in Japan, 2021)."

However, the reality is that this world's largest greenhouse gas emitter is increasing its coal consumption in the face of a domestic energy crisis and Russia's invasion of Ukraine. While accelerating the introduction of renewable energy, China is expanding its coal production capacity.

In China, where the government temporarily subdued the spread of the novel coronavirus infection, cement and steel production increased in pace with economic recovery, and electricity demand began to surge in the second half of 2020. As a result, electricity demand in the first half of 2021 rose by 16.5% on a year-over-year basis (The Central People's Government of China, 2021).

The Chinese government had to address the power supply shortage resulting from this increased electricity demand primarily through coal-fired power generation, which accounts for about 60% of total power generation in China. Beijing is now taking a series of policy measures for hastening coal development, including the opening of new coal mines, raising the ceiling price of coal, and elevating production targets (Myllyvirta & Zhang, 2022).

In this trend of coal production increase, China's greenhouse gas emissions (GHGs) in 2021 are estimated to have reached 14.1 billion tons of carbon dioxide equivalent (GtCO2e), about 5% above pre-pandemic levels. (Climate Action Tracker, 2022)

In October 2021, the press reported that Premier Li Keqiang announced at a meeting of the National Energy Commission that China would strengthen coal development for energy security and economic development (China Electricity News, 2021). China's annual coal output in 2021 reached a record highest (Reuters, 2022).

Will China be able to peak out its carbon dioxide emissions by 2030 in line with the 3060 target proposed by President Xi? In the first place, does President Xi still retain the will to achieve it?

President Xi's pledges of carbon peak-out by 2030 and carbon neutral by 2060 will depend primarily on his third administration's energy policy to be implemented during the next few years. As the world's largest source of greenhouse gas emissions, China's energy policy is not merely a matter for the country but one that will affect global warming as a whole.

This paper looks into these questions and provides an outlook on China's climate change policy to be taken in the third term of the Xi Jinping administration (2022-2027). First, the following section reviews President Xi's recent words and actions on decarbonization. Section 3 discusses his decarbonization policy in the historical context over the past two decades. Based on these reviews and discussions, Section 4 discusses the feasibility of carbon dioxide emissions peaking out by 2030.

2. Xi Jinping's Commitment to Decarbonization

In January 2022, at a meeting of the Political Bureau of the CPC Central Committee, President Xi said, "While bringing down carbon emissions, efforts should be made to safeguard energy security, industrial and supply chain security, and food security, as well as ensure people's normal daily lives (Xinhua, 2022)."

At present, energy shortages are hampering China's economic recovery; the prospect of employment and economic growth is uncertain; the National Congress of the CPC, where President Xi's continuation in office will be discussed and determined, will take place in the coming autumn. His remarks above suggest that he is obliged to take a cautious position, emphasizing the importance of the domestic economy and political stability.

However, it would be premature to interpret President Xi's above remarks as expressing a regression from the 3060 target. At the meeting in question, President Xi also stated, "China should resolutely control fossil fuel consumption, especially regulating the growth of coal consumption in a strict and reasonable manner." He is by no means attempting to withdraw his decarbonization policy (ibid.).

Some draw attention to the fact that decarbonization was debated at this year's first meeting of the Political Bureau of the CPC Central Committee, which they believe indicates President Xi's strong commitment to the issue (The Guardian, 2022). There was skepticism that China would slacken its decarbonization efforts as energy and electricity shortages were affecting its economic recovery and the livelihood of its citizens. However, President Xi's call for steady implementation of decarbonization at the first 2022 Politburo meeting helped dispel doubts about China's retreat from decarbonization.

President Xi also stated at that meeting, "Both goals in the long run and short-term targets should be taken into account, stressing efforts to get the right tempo and strength in carbon cut." Xi's announcement in 2020 of the 3060 target was followed by the moves of some Chinese companies and local governments to rush decarbonization, going so far as to stop the use of coal or to forcibly reduce energy consumption. Xi's January Politburo meeting speech was intended to warn against this kind of hasty decarbonization and to encourage a balance between the current economic situation and medium- and long-term decarbonization goals.

3. Xi Jinping's Decarbonization Policy Based on Green Development Strategy

At the January Politburo meeting, President Xi said, "Cutting emissions is not aimed at curbing productivity or no emissions at all." He stressed that "the economic development and green transition should be mutually reinforcing." China's "14th Five-Year Program" (2021-2025) sets forth the policies of promoting green development and of accelerating green transformation development; it proposes the following ten policy measures to realize these policies (Someno, 2022):

  1. Optimize energy structure
  2. Optimize and upgrade industries and the manufacturing industry
  3. Promote energy-saving low-carbon buildings and low-carbon measures
  4. Establish a green, low-carbon transportation system
  5. Develop a circular economy and improve the resource use efficiency
  6. Promote green, low-carbon technology innovation
  7. Develop green finance
  8. Implement various sets of economic policies and reform measures
  9. Establish and improve carbon markets and carbon pricing mechanisms
  10. Implement nature-based solutions

An economy aiming at sustainable development that makes the environment and economic growth compatible is called a green economy. The industrial policy for this purpose is a green industrial policy. It may include policy support measures to stimulate and promote the development of environmental technologies, such as public investment, incentives, and regulations. What distinguishes a green industrial policy from other industrial policies is its aim of shifting and restructuring the economy into a green economy. As various green industrial policies constitute the primary climate change action, the latter also changes from an environmental policy in the narrow sense to an economic and industrial policy (Meckling & Bentley, 2020).

Japan formulated "Green Growth Strategy" as a fundamental principle of its green industrial policy in December 2020; much earlier, around 2005, China positioned a shift to a green economy as a means of economic growth and began proactively implementing its green industrial policy. (Sekiyama, 2021)

Around 2005, China launched in succession national policies aimed at promoting energy saving and the spread of renewable energy, including the enactment of the "Renewable Energy Law (2005)." China's "11th Five-Year Plan" (2006-10) targeted to reduce energy consumption per unit of GDP by around 20% over five years. The 2007 "National Climate Change Program" also set a target of "increasing the share of renewable energy in primary energy to 10%."

From that time in China, the realization of a low-carbon economy through the improvement of energy efficiency and the wide use of renewable energy came to be recognized not merely as a climate change action but also as one of the cardinal pillars of broader industrial policy. Reducing dependence on oil imports was also considered to help alleviate energy security concerns. The Chinese government believed that given China's huge and growing domestic market, accelerating investment in decarbonization would lead to the improvement of a broad range of relevant technological capabilities and to the emergence of internationally competitive corporations, thereby contributing to a shift from the traditional economic development model based on labor-intensive industries. (CCICED, 2009)

In addition, the 2007 "Comprehensive Work Plan for Energy Conservation and Emission Reduction" has a far-reaching influence in making it mandatory for the CPC to consider the degree of achievement of set goals related to energy saving and environmental protection, when performing personnel evaluation of local government leaders and executives of leading state-owned enterprises (Qi, 2013). Local government leadership began to actively promote the manufacture and introduction of renewable energy equipment as a means to make economic growth and environmental goals compatible.

Thus, China has rapidly increased its manufacturing capacity for solar panels and wind power generation equipment, boasting the world's largest market share of these products. As of 2021, six of the top ten global wind turbine manufacturers were Chinese corporations, with a combined market share of 44.5% (Bloomberg, 2022). The top four shippers in the world of PV modules in 2021 were Chinese firms; six in total out of the top ten PV module shippers were Chinese (Solar Media, 2022).

China consistently maintains its stance of actively promoting climate change action to advance green development. President Xi followed this policy line when he announced the 3060 target at the UN General Assembly in September 2020, and when he called for the steady implementation of decarbonization by stating at the January 2022 Politburo meeting that "the economic development and green transition should be mutually reinforcing."

China's decarbonization policy is closely related to the green development that the country has promoted for more than 15 years. The present author therefore believes that China's policy of green development through decarbonization will continue into the third term of the Xi administration, which will, however, carefully avoid the premature cessation of coal use and a hasty energy conversion that might hinder economic growth.

4. An Outlook for China's Carbon Peaking by 2030

China's current decarbonization policy will not substantially change in the third term of President Xi Jinping. Meanwhile, as mentioned at the outset of this paper, coal use and greenhouse gas emissions in China are increasing. Will China be able to peak its carbon dioxide emissions by 2030, as President Xi pledged?

China's carbon peaking will depend upon how much the country can reduce by 2030 its use of coal and oil and switch to natural gas, which emits relatively less carbon dioxide, and non-fossil energy sources such as wind, solar, and nuclear powers.

In this regard, President Xi also stated, "It is necessary to accelerate the development of new energy sources such as wind, solar, biomass and hydrogen energy that have scale and benefits, coordinate hydropower development and ecological protection, and actively develop nuclear power in a safe and orderly manner (Xinhua, 2022)."

Indeed, China is now accelerating its policies to promote the use of non-fossil energy. Its "14th Five-Year Program" targets to increase the share of non-fossil energy (including renewable energy sources such as solar and wind power, as well as nuclear power) in primary energy consumption to about 20% by 2025. Furthermore, the "14th Five-Year Plan for Renewable Energy Development," released on June 1, 2022, sets the following targets:

(1) To increase renewable energy consumption to approximately 18% of the primary energy consumption.

(2) To increase the annual renewable energy power generation to around 3.3 trillion kWh; to make the increase in renewable energy power generation account for more than 50% of the increase in electricity consumption in the whole society.

What does the actual status of energy conversion in China look like? The targeted "annual renewable energy power generation of 3.3 trillion kWh by the end of 2025" could not be achieved without a 50% increase from the end of 2020. Questions are raised --- unofficially, needless to say --- on whether so much renewable energy could be produced or where it could be (Wang Ting, 2022).

Nonetheless, the reality is that China is steadily introducing renewable energy on a large scale. Annual renewable energy power generation increased by about 13% in the single year of 2021 (ibid). If the introduction of renewable energy continues at this pace, annual renewable energy power generation of 3.3 trillion kWh will be readily reachable by the end of 2024; it will amount to about 4 trillion kWh by the end of 2025 --- far exceeding the initial target.

China's Greenhouse Gas Emissions --- Past and Projected

Note: Past (solid line) and projected (dashed line) greenhouse gas emissions (million ton) in China.
Source: Prepared based on Lui, 2022

The Climate Action Tracker, which monitors greenhouse gas emission reductions in different countries, released a forecast in May 2022 that China's emissions are likely to peak around 2025 and gradually decline toward 2030 if the Chinese government steadily implements its current energy conversion policy. The share of non-fossil energy in primary energy consumption is also projected to far exceed 25% by 2030. The report concludes that China's NDC (nationally determined contribution) to reduce by 2030 carbon intensity (emissions per unit of GDP) by no less than 65% of the 2005 level will be readily achievable. (Climate Action Tracker, 2022)

5. Conclusion

As discussed above, China is increasing its coal consumption and, as a result, greenhouse gas emissions in the short term, to address energy shortages since 2021. Yet, President Xi's commitment to achieving the 3060 target remains unchanged. If the Chinese government steadily implements the current energy conversion policy under Xi's third term, carbon dioxide emissions in China will peak around 2025, much earlier than 2030. The country will likely fulfill its NDC related to climate change action.

However, if China chooses to meet its growing energy demand with coal and oil, its carbon peaking will be delayed, and peak emissions will also increase. As noted at the outset, a delay in decarbonizing the world's largest greenhouse gas emitter would be a fatal setback not just for China alone but for the entire planet.

Meanwhile, if China fulfills, as expected, its decarbonization targets ahead of schedule and challenges still tougher targets, it will take the lead in international negotiations on climate change action. Climate change action is often cited as one of the few possible areas of US-China cooperation. Given the ongoing US-China confrontation, however, it might become an arena for leadership struggles.

Japan is also responding to electricity shortages by increasing thermal power generation. Will Japan be able to use decarbonization as an opportunity for its economic development, promote energy conversion, and take the lead in climate change action in the world?


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