China’s energy policies are fast creating a type of “emissions ambiguity”, as the twin goals of boosting GDP growth and reducing carbon emissions come into conflict.
The uncertainty is whether and when the world’s biggest carbon emitter will start to curb greenhouse gas pollution. The release of the country’s annual statistics communique on Tuesday did not clear things up.
As Lauri Myllyvirta, an analyst at Centre for Research on Energy and Clean Air, noted this month, China’s carbon emissions may have risen 1% or fallen by that amount in 2022.
A crude conversion of the 3% GDP growth reported by China and its 0.8% reduction in the carbon intensity of economic activity – as stated in the communique – indicates emissions may have risen 2.2% last year.
The calculations matter as China emits more than a quarter of global emissions, roughly twice as much as the next largest, the US.
In November 2021, China told the UN it would reach carbon neutrality “before 2060”, and President Xi Jinping has also promised to reduce coal consumption by the 2026-30 period, but has not said when China will stop building new power plants.
Pollution growth should also have been subdued in 2022, a year when economic activity was slowed by rolling Covid curbs. Excluding 2020, which included the worst of the pandemic disruptions, GDP growth last year was the weakest since the 1970s.
Local officials often use big infrastructure projects, such as power plants, to boost economic activity in their areas. There will be even more pressure to stimulate growth after the GDP target for 2023 is announced at the National People’s Congress, which starts on 5 March. The national target is expected to be about 5%.
As Myllyvirta’s centre reported on Monday, China was busy granting permits for an average of two power plants a week in 2022, or six times more capacity than the rest of the world combined. One executive boasted of securing approval to build a 4,000-megawatt coal-fired plant in just 63 days after taking ownership of the project.
“China has not seen such a wave of new permits for new coal-fired power plants since the permitting frenzy of 2015, when provincial governments were given the authority to approve new projects,” the report says.
Should a large proportion of the 106GW of new coal projects permitted – more than four times 2021’s 23GW tally – begin operation, global efforts to keep climate heating to the Paris accord temperature limit of 1.5C are, frankly, cooked.
“One of the clear upshots is that China is now very significantly behind its energy and carbon intensity targets for 2025”, Myllyvirta said.
But here is where the ambiguity lies. Permitting does not equate to construction, and since many of the proposed plants are in regions already oversupplied with power, it is not clear new capacity will necessarily equate to extra coal combustion.
And, as Myllyvirta highlights, numbers in the communique stating that coal consumption rose 4.3% in 2022 and total energy use rising 2.9% “appear to contradict weak or falling industrial output”.
The 3.1% drop in oil consumption and a 1.2% fall in gas use – the first fall in at least 20 years – also point to suspiciously weak demand in the economy.
Of course, while China is pouring money into building new coal plants, it is also leading spending on renewable energy and low-carbon products such as electric vehicles – even if the US Inflation Reduction Act looks to challenge that primacy. The IRA pledges, among other things, to result in 950m new solar panels and 120,000 new wind turbines in the US by 2030.
China added a record 125GW solar and wind capacity in 2022, with about two-thirds of that solar, the Centre for Research on Energy and Clean Air says.
According to the official communique, clean energy consumption – which includes nuclear and hydropower – rose 0.4 percentage points last year to 25.9%. That’s still less than half coal’s share at 56.2%.
China’s output of solar panels totalled 340m kilowatts of capacity, up almost half on 2021’s level. Production of so-called new energy vehicles, most of which were plug-in electric, soared 90.5% to just exceed 7m units, the communique says.
Why those solar panels and zero-emissions cars might come in handy was hinted at in another statistic that China’s policymakers must keep in mind when considering the urgency of tackling pollution.
“Of the monitored 339 cities at prefecture level and above, 62.8% reached the air quality standard and 37.2% failed,” the communique says.
Clearing that up, too, would be a good thing.
