The Reforms Needed for Deep Decarbonisation in China

In 2020, China accounted for 28% of the world’s carbon emissions, and those emissions are still rising. Nevertheless, it has announced its commitment to reaching net-zero carbon emissions before 2060. Given its enormous coal-dependent infrastructure, large heavy-manufacturing base, and rapid rate of urbanisation, transitioning away from fossil fuels will be very challenging.

There is every sign that China is embracing this challenge in a serious manner. It is the top global producer and user of renewable energy, and top producer of electric vehicles (EVs). It has instituted a carbon trading scheme that covers power generation, a sector which accounts for 40% of the country’s emissions. And it has dramatically improved energy efficiency across multiple sectors. In October 2021, the State Council issued a roadmap for decarbonisation with five guiding principles, dozens of measures, and emission targets for 2025, 2030 and 2060. Yet, just weeks later at COP26, China disappointed some governments by not setting more ambitious near-term emission reduction targets.

This raises several questions: How should a country measure success in meeting the challenges of climate change? Are short-term policies to lower emissions as quickly and as much as possible necessarily the most effective approach right now? What about investments in new technologies, like advanced nuclear energy or green hydrogen, that may play only a small role in the near term, but in the long run may prove to be very important in achieving deeper carbon reduction goals?