China’s future emission pathwayGlen Peters (CICERO)MFA Seminar (30/03/2017)

The emergence of China

The 2000’s growth spurt was not expected, nor was the 2010’s slowdown. What next for China?

Bunker fuels are used for international transport is 3.1% of global emissions.Statistical differences are between the global estimates and sum of national totals is 1.2% of global emissions.

Source: CDIAC; Le Quéré et al 2016; Global Carbon Budget 2016

Top emitters: fossil fuels & industry

Chinese per-capita emissions have also grown, and they now exceed the world average and the EU28

Source: CDIAC; Le Quéré et al 2016; Global Carbon Budget 2016

Top emitters: fossil fuels & industry

Why the rapid changes in China?

Coal dominates the Chinese energy system. Oil and gas are growing strongly.Increasing growth in non-fossil sources, dominated by hydro, with nuclear, solar, and wind having a small share.

Source: BP 2016; Jackson et al 2015; Global Carbon Budget 2016

Energy consumption by energy type

The annual increase in energy consumption (black) has declined, mainly since less growth in coal use (green)Renewables have grown strongly, but the slowdown in energy use makes this look more impressive!

All data is smoothed with a 10 year windowSource: Peters et al 2017

What is the marginal energy source?

CO2 emissions growth (back) slowing in China due to:Slow energy growth (purple), with help from renewables (orange) & cleaner fossils (green)

All data is smoothed with a 10 year windowSource: Peters et al 2017

Drivers of CO2 emissions growth

Energy consumption growth (back) slowing in China due to:Weaker economic growth (green), tempered by slow efficiency improvements (purple)

All data is smoothed with a 10 year window Source: Peters et al 2017

Drivers of energy consumption growth

About three-quarters of the drop in China’s overall coal use can be attributed to drop in construction.Air pollution concerns and renewables contribute, but by no means dominated.

Source: Brad Plumer (Vox, 6/03/2016)

The role of energy intensive products

Chinese exported-driven growth in the 2000’s (orange) allowed developed countries to grow without the emissions.Since the Global Financial Crisis, export-drive growth has slowed, so has the net import into developed countries.

Source: Peters et al (2011); CDIAC; Le Quéré et al 2016; Global Carbon Budget 2016

Slowdown in CO2 emissions exported

When will Chinese CO2 emissions peak?

Chinese emissions have most likely been flat since 2013, a significant change from the 2000’s.Will this trend continue?

Source: BP, NBS, IEA, and own calculations, see Le Quéré et al 2016

Have emissions peaked already?

When will Chinese CO2 emissions peak?The President said before 2030

No, when do you think emissions will peak?We normally follow what the President says…

When will Chinese CO2 emissions peak?

Targets which are interrelated• Peak CO2 emissions by 2030• Decrease carbon intensity -60% to -65% below 2005 by

2030• Increase non-fossil share of energy to 20% in 2030

Additional target• Increase forest stock 4.5 billion m3 by 2030

China’s emission pledge (NDC)

Targets imply a 3-4%/yr decrease in carbon intensity (CO2/GDP)CO2 will peak when GDP growth drops below carbon intensity decline (2025-2030)

Source: Peters et al 2015; Global Carbon Budget 2016

Emission intensity target

Earlier peak in emissions:• Either, GDP growth slower• Or, CO2/GDP declines faster

With mid-range GDP growth & if China follows the historic trend in emission intensity, then……emissions will peak 2025-2030 (that is, intensity and peak pledge consistent)

Source: Peters et al 2015; Global Carbon Budget 2016

Emission pledge embeds more growth

Grey region is where Chinese emissions needs to go if the world is to stay below 2°C

If growth in non-fossil energy continues, as expected, target should be achievable(note, this figure has not been updated since the third economic census)

Source: Various sources, own calculations

Increase non-fossil share to 20% in 2030

Should we trust Chinese data?

A major dip in coal consumption around 2000 turned out to be underreporting of small coal mines.The current Chinese “crackdown” may have similar led to underreporting?

Source: BP (Multiple Years) and based on NBS data, with own calculations

Can the data be trusted?

The growth in coal consumption by mass can be very different to energy, since coal quality can improve.The large reported drops in coal consumption by mass are offset by improved quality (or data errors).

Source: BP (2016), with own calculations

Don’t confuse mass with energy

Key Messages

• Chinese CO2 emissions grew unexpectedly rapidly during the 2000’s, and the growth unexpectedly stopped after 2010– Mainly economic factors (energy-intensive production, hence coal)– Energy efficiency improved, returning to longer term declines after a

slowdown in the 2000’s– Non-fossil energy sources growing fast, but from low levels– Air pollution concerns no doubt contributed, but not dominant

• Is there an early peak in CO2 emissions?– Coal power plants are still there, just running less of the time– Peak important, but emissions need to decline as fast as they inclined

Key messages

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glen.peters@cicero.oslo.noGlen Peters