China is currently the world’s largest energy consumer and CO₂ emitter, and its cities contribute 85% of the total CO₂ emissions in China. Given the magnitude and growth rate of Chinese cities’ carbon emissions, cities are considered to be the key areas for implementing policies designed to adapt to climate change and mitigate CO₂ emissions.

This study summarizes the key features and drivers of China’s regional carbon emissions and conclude with suggestions for a low carbon policy for China.

International trade has become the fastest growing driver of global carbon emissions, with large quantities of emissions embodied in exports from emerging economies. International trade with emerging economies poses a dilemma for climate and trade policy: to the extent emerging markets have comparative advantages in manufacturing, such trade is economically efficient and desirable. However, if carbon-intensive manufacturing in emerging countries such as China entails drastically more CO2 emissions than making the same product elsewhere, then trade increases global CO2 emissions.

China is the world's largest emitter of carbon dioxide, accounting for one-quarter of the global total in 2013. Although the country has successfully lowered the rate of emissions from industry in some cities through improved technology and energy-efficiency measures, rapid economic growth means that more emissions are being added than removed. Without mitigation, China's CO2 emissions will rise by more than 50% in the next 15 years.

The magnitude and growing annual rate of growth of China's carbon emissions make this country the major driver of global carbon emissions and thus a key focus for efforts in emissions mitigations. This report presents independent data on China's carbon emissions from 1950–2012, and provides a basis to support mitigation efforts and China's low-carbon development plan.

Knowing the carbon emission baseline of a region is a precondition for any mitigation effort, but the baselines are highly dependent on the system boundaries for which they are calculated. On the basis of sectoral energy statistics and a nested provincial and global multi-regional input–output model, the authors calculate and compare four different system boundaries for China's 30 provinces and major cities.

China committed itself to reduce the carbon intensity of its economy (the amount of CO2 emitted per unit of GDP) by 40–45% during 2005–2020. Yet, between 2002 and 2009, China experienced a 3% increase in carbon intensity, though trends differed greatly among its 30 provinces. Decomposition analysis shows that sectoral efficiency gains in nearly all provinces were offset by movement towards a more carbon-intensive economic structure.

The energy sector is increasingly facing water scarcity constraints in many regions around the globe, especially in China, where the unprecedented large-scale construction of coal-fired thermal power plants is taking place in its extremely arid northwest regions. As a response to water scarcity, air-cooled coal power plants have experienced dramatic diffusion in China since middle 2000s. By the end of 2012, air-cooled coal-fired thermal power plants in China amounted to 112 GW, making up 14% of China's thermal power generation capacity. But the water conservation benefit of air-cooled units is achieved at the cost of lower thermal efficiency and consequently higher carbon emissions intensity.

"First, China must move away from coal and boost recycling and renewable energies. Second, emissions-mitigation indicators, such as energy-efficiency targets, should be set relative to physical output (such as tonnes of steel production) rather than to economic growth. Third, regional energy supply and demand must be balanced. Fourth, energy prices should be linked to market mechanisms rather than set centrally by authorities. And fifth, China must reduce air pollutants alongside CO2 emissions."