After three unprecedented consecutive years of decline, early estimates have brought the bad news that China’s energy-related CO2 emissions appear to have risen in 2017. Very preliminary estimates for the months passed of 2018 suggest that this trend is continuing. Is it time to give up hope that CO2 emissions can be controlled? The answer to this question depends on understanding what has driven the rising emissions in 2017. This paper addresses this issue with respect to China, the world’s largest emitter.
The recent performance of China in terms of addressing climate change and transitioning its energy sector has been somewhat flattered by an un-reported economic slowdown in the period 2013 to 2016. Looking at the energy data for the last three years, it seems implausible that China’s economy has grown as fast as reported.
Recent stimulus has reversed this slowdown and economic recovery has driven a rapid growth in energy demand in 2017. In the future, it seems likely that economic growth rates will decline moderately year on year, on the back of declining growth rates of investment and industrial production. This should assist in keeping energy demand growth in check, although not to the extent seen in 2013 to 2016.
If energy demand growth can be slowed in the coming years compared to the growth rate seen in 2017, it is likely that the supply growth of low-carbon energy would be sufficient to keep emissions growth in check. On balance, it appears likely that the next few years will see approximately stagnant emissions in China, with alternating years of slight growth or slight decline. A definitive peak and declining trend thereafter still appears some way off.
China is still well on track to achieve its 2020 and 2030 climate policy commitments, in particular the target to reduce the carbon intensity of GDP by 60-65% by 2030. Indeed, it still seems likely that China would overachieve this target. It appears still likely that China would peak its CO2 emissions before 2030.