China’s COP27 Commitments

21 November 2022

By Robin Cheng and Lau Shen-I

All eyes will be on China, the world’s largest emitter of carbon, at the Convention of Parties (COP) 27 at Sharm el-Sheikh. In the context of former President Donald Trump’s administration pulling the US out of the Paris Agreement and abandoning its role as an international leader in combatting climate change, China has achieved leadership status in global climate change mitigation efforts. It is likely that at COP 27, China will reinforce its consistent commitment to the international climate agenda since the Paris Agreement. In line with their strong policy of pragmatic domestic implementation, China officials have called for COP 27 to focus on “implementation, adaption and finance”. These include transitions to renewable and cleaner energy to reduce air pollution and coal power dependence, subsidies for electric vehicles, and domestic support for green and low-carbon development. This article will focus on China’s pivotal role in COP 27 and what it intends to do in achieving its commitments. 

Urging countries to fulfill past climate commitments 

One of the main themes of the COP27 is expected to be the difference in impacts of climate change on developing and developed nations. In 2009, wealthy countries pledged $100 billion a year to help lower-income nations by 2020 at COP15 in Copenhagen. However, they still have not made good on the pledge. Chinese officials urged western countries to fulfill their commitments, "instead of just submitting a report during COP27 that makes excuses for the delay," according to a state media report.

While China and other developing nations requested a $1.3 trillion climate fund from developed countries at COP26, China also offered $5.1 billion to help developing countries tackle climate change through its South-South cooperation. This comes as part of an effort by China to extend climate support to countries in the Global South. As a result, it is expected that many of these countries previously aided by China will side with the country during COP27. This is especially so for small island developing nations (SIDS), where monetary support from China has been essential for the survival of their budding economies. For China, this has been an opportunity to bolster its engagement with Pacific island states.

Li Gao, general director of the Department of Climate Change with the Ministry of Ecology and Environment (MEE) of China, urged all parties to fully and accurately implement the goals and principles of the UNFCCC and the Paris Agreement, especially the principle of common but differentiated responsibilities and respective capabilities, adhere to the global temperature control goal of "within 2 C and strive for 1.5 C," and jointly build a fair, and reasonable cooperation.

China’s efforts to combat climate change 

Controlling coal and fossil fuel consumption 

In late 2021, following widespread power shortages, China’s leadership repeatedly emphasised the importance of ensuring energy security - a country’s ability to secure sufficient and affordable energy supplies without interruption. With the exacerbation of recent droughts and supply shocks owing to the Russia-Ukraine conflict, China has implemented an intense push to increase its production and supply of coal, its main energy source. Daily outputs from coal mining have set “record highs”, and coal stock at coal-fired power plants has been kept at “historically high levels”. China continues to construct major coal-fired power projects, with three billion-dollar coal mine projects greenlighted in February 2022. Furthermore, the 14th FYP stresses the role of coal in ensuring the basic needs of China. 

These developments stand in stark contrast to China’s commitments to move away from coal: in 2021, President Xi Jinping announced at the Leaders Climate Summit that China will “strictly control coal consumption” over the next 14th FYP period (2021–2025) and to “phase down coal consumption” over the 15th FYP (2026–2030). As China is already the world’s largest consumer, producer and importer of coal, what do these developments mean for Beijing's dual-carbon goals?

Dr Xie Chunping, a Senior Policy Fellow at the Grantham Research Institute on Climate Change and the Environment, thinks that the push “will certainly affect” the level of China’s CO2 emissions in “the following few years” because more coal is being used to meet the growing demand. But she says that the move “may not necessarily” affect the timing and level of China’s emissions peak, “as long as China starts to significantly reduce the utilisation rates of coal-fired plants and use them as backup capacity, once renewables build up”. 

Studies show that to be compatible with a 1.5°C pathway, China would need to decrease the share of unabated coal in power generation to at least 35% in 2030, with a complete phase-out before 2040. Moreover, to reach its carbon-neutrality target by 2060, China must retire nearly 600 of its coal-fired power plants in the next 10 years, according to Transition Zero. 

In light of these developments, China will probably remain dependent on fossil fuels for the short-term future for energy security reasons and will need to slowly phase out coal-fired plants while building up its renewable energy capacity (which will be discussed in the next section). 

Investment in clean energy 

Cutting coal consumption and replacing it with cleaner energy sources have been important priorities for China.  President Xi has recently reiterated the importance of green development and the pressing need for a clean energy transition. According to the 14th FYP, renewables will account for more than 50% of primary energy consumption by the end of the period and more than 50% of generation growth to meet increased demand, with wind and solar providing the bulk of those increases.

Interestingly, China’s growth in renewable energy (RE) capacity installations has not slowed despite parallel increases in fossil fuel capacity. Studies have shown that RE capacity surpassed 1,000 GW in 2021, showing an exponential trajectory from the approximately 250 GW installed in 2010, and 500 GW installed in 2015. Both wind and solar exceeded 300 GW each in 2021, with hydropower still representing the largest single source of renewable capacity. The CEC forecasts an additional 140–150 GW in wind and solar capacity to be added over the course of 2022. If China’s current trend of renewable energy installations continues at the expected rate, it is projected to reach its targets for wind and solar installations. 

Furthermore, China has done well to address the high energy consumption of their transport sector. Only trailing the industry sector, the transport sector accounts for almost 14% of national primary energy consumption. Hence, the government placed a strong focus on stimulating the new energy vehicle (NEV) uptake. Following a massive slump in NEV sales due to COVID-19, China subsequently targeted the NEV sector in its economic recovery packages, extending the subsidy scheme to 2022 and injecting CNY 2.7bn (USD 0.42bn) in BEV charging infrastructure. NEV sales rebounded, and by the end of 2021, China’s Ministry of Public Security reported that China’s NEV fleet had grown to a staggering 7.8 million, and is on track to reach its 20% target in the next year. China is also giving high prioritization to other forms of electrified transport. It already boasts 80% of the world’s public fast chargers (particularly important for electric buses in urban travel) and has outlined the expansion of national high-speed rail and local electric public transport systems in its COVID economic stimulus packages.

These advancements in renewable energy are paramount to the current government strategy of shoring up energy security by expanding the coal supply in the short-run, while developing a new electricity system based on renewables in the long-run. Yuan Jiahai, a professor at North China Electric Power University’s school of economics and management, believes that “speeding up the development of renewables at home will, in fact, tackle our long-term energy security issues at the root”.

Addressing the water crisis 

Nonetheless, these strong improvements in clean energy investments do not address the burgeoning water crisis and drought issues that plague China as of late. Water has been crucial to China’s rapid development: currently, China consumes ten billion barrels of water per day—about 700 times its daily oil consumption. Thus, the months of drought have severely affected China’s industries, and more specifically, its renewable energy industries. This is because nearly 90 percent of China’s electricity supply still requires extensive water resources, particularly hydro, coal, and even nuclear generation. In places like Sichuan, which gets more than 80% of its energy from hydropower, the water crisis has sparked a “grave situation”, with many neighbourhoods losing access to electricity. A study found that if China lost 15 percent of its hydropower production in a year because of low water levels behind dams—a plausible scenario based on real-world experiences in Brazil—it would have to increase electricity output by an amount equal to what Egypt generates in a year. 

As such, sustained water problems in China could severely impede its transition to clean energy, and the government will have to face the looming crisis with a dynamic and innovative approach.  

US-China relations

Global developments such as tariffs on China exports during the US-China trade war have caused rising tension between China and the US. The power struggle between China and the US is more relevant than ever now that China is stepping up in its efforts to become the more dominant country of the two. The fraught relationships between the two countries will need to be overcome — or overlooked — when finding strategies to combat climate change during COP27.

China has a head start on the US in its mass rollout of solar power and electric vehicles. The US, which is the second biggest current emitter, plans to challenge China’s claim to global leadership on climate action with an array of new carbon reduction initiatives. 

China’s top leadership certainly has its attention on the climate agenda and is making strides to achieve its dual-carbon goals. Nevertheless, China will have to respond quickly to recent developments that threaten to impede its sustainable development such as COVID-19, the energy crunch, the water crisis, tensions with the US, as well as the war in Ukraine. The government must still place its commitment to its goals at the forefront as it deals with these crises and builds a resilient recovery plan.

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