China could introduce a target to cap its overall carbon emissions as early as 2016, according to reports, a sign that’s been widely interpreted as a breakthrough in the global struggle against climate change. But government sources say no final decision has been made, while experts warn that implementing a cap will not be an easy task.
The story that the government plans to take measures to cap carbon dioxide emissions during its next and 13th Five-Year Plan, the country’s development blueprint for the years 2016-2020, reportedly came from a speech given by Xie Zhenhua, deputy chair of China’s top economic planning body, the National Development and Reform Commission (NDRC).
According to 21st Century Business Herald, the Chinese newspaper that broke the story, the information was passed on by an unnamed local official who heard the speech.
On seeking confirmation from NDRC policy staff, chinadialogue was told the reports shouldn’t be “over-interpreted”. But the signals of escalating ambition are still loud and clear. “No final decision has been made,” said Zou Ji, deputy head of China’s National Centre for Climate Change Strategy. “But it’s a sign that the Chinese government and specialists are anxious to take a low-carbon path.”
How distant is the carbon peak?
Chinese academics and policy researchers have previously predicted that China will hit peak carbon emissions in 2030. But observers say this could now be brought forward – if 21st Century Business Herald is to be believed, the NDRC is actively looking at 2025 as the peak year.
Yang Fuqiang, a senior advisor on energy, environment and climate change to green campaign group the National Resources Defense Council, told chinadialogue “one thing at least is clear: the government is looking harder at shifting peak carbon from the original target date of 2030. But this is just one possible outcome.”
China seems to be becoming more optimistic about what it can achieve. But not everyone is convinced it’s possible to know what the future holds. “We have to describe accurately what is going to happen over the next 10 or 20 years and more, and I don’t think Chinese academics can do that yet,” said Zou Ji. “But the government needs to move gradually towards managing that peak.
“If targets are unrealistically rash or conservative, then government credibility and authority will suffer. Also the contexts of this target and [international] negotiations over commitments need to be separated – they have different aims.”
No matter when the peak is reached, said Zou, whether emissions plateau or fall quickly is a complex equation, determined by patterns of energy consumption and efficiency, economic structure, spending patterns – particularly on transportation and buildings – and application of new technologies, among other factors.
As for the 2025 target, which many have found encouraging, Zou said that “a post-2030 peak is more achievable, while an earlier target would need hard work and sacrifice.”
Pan Jiahua, head of the Institute for Urban and Environmental Studies at the Chinese Academy of Social Sciences, also prefers to be more conservative about the pace of change in China.
Pan has argued that large-scale restructuring of the Chinese economy, away from heavy industry and towards cleaner services, will take place after 2020. By that point, he said, the industrial, raw-material and manufacturing sectors will be reaching maximum size and there will be no more major expansions. Investment will subsequently shift to the services sector and the improvement of energy efficiency and technology, and by around 2035, services will account for somewhere between 55% and 64% of the economy.
Carbon tax versus carbon markets
A carbon cap would be particularly significant for China’s nascent carbon markets: without one, say advocates, voluntary carbon trading will be nothing more than a symbolic gesture towards low carbon ideals.
According to 21st Century Business Herald, Xie Zhenhua’s now famous speech emphasised the importance of provincial and city low-carbon projects, which include China’s pilot carbon markets. The locations chosen in 2010 for the first batch of provincial and city low-carbon projects have been completing their plans, with some cities setting their own timetables for peak emissions.
Xie was quoted as saying that “the economically developed cities of the east will play a leading role and aim to peak first.”
But the emphasis on carbon markets as China’s route to low emissions is itself up for debate. While the NDRC has been pushing forward with carbon market pilots, the Ministry of Finance has been working on a potential carbon tax. Before the 2013 Lianghui – China’s annual parliamentary session – an anonymous official at the ministry said that a carbon tax mechanism for China was as good as certain.
Yang Fuqiang quoted a Ministry of Finance official as saying that “the Ministry of Finance is keen, the Ministry of Environmental Protection agrees, but the NDRC is key.” But the NDRC’s policies, documents and meetings focus much more on carbon markets than carbon taxes. The NDRC also has joint projects on carbon markets with the World Bank and the EU, with huge amounts of funding involved.
It seems the Ministry of Finance and the NDRC are gearing up for a departmental power struggle. Who will win remains to be seen.
There are also questions about how easy it is for the government to work out what China’s carbon cap should be.
Much of the uncertainty comes from GDP figures. If the rate of economic growth remains within a certain range with no major fluctuations, carbon intensity – the greenhouse gases released per unit of GDP – can be used to set a range for a carbon cap, explained Zou Ji.
But there’s a problem. As Yang Fuqiang points out, it is unrealistic to expect all of China’s hugely varied regional economies to keep GDP growth near to 8%. You could ask central China to do so, but not highly developed Shanghai, for example. GDP growth cannot be accurately measured and controlled.
As a result, Yang believes targets for carbon and energy intensity – as opposed to an absolute cap – remain a better bet for China at national level. “Inclusion of further energy measures in energy intensity calculations and more stimulus for renewable energy would provide better guidance,” said Yang.