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Guide to Chinese Climate Policy 2019

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Guide to Chinese Climate Policy 2019 GUIDE TO CHINESE CLIMATE POLICY 2019 DAVID SANDALOW GUIDE TO CHINESE CLIMATE POLICY 2019 DAVID SANDALOW 1255 Amsterdam Ave New York NY 10027 www.energypolicy.columbia.edu @ColumbiaUenergy SEPTEMBER 2019 GUIDE TO CHINESE CLIMATE POLICY 2019 TABLE OF CONTENTS PREFACE 3 INTRODUCTION 5 PART I - BACKGROUND 9 1. CHINESE EMISSIONS OF HEAT-TRAPPING GASES 11 A. Carbon Dioxide 11 I. Emissions Metrics 12 II. Emissions Growth 17 III. Emissions by Sector and Source 19 B. Other Gases 20 C. Uncertainties in Emissions Estimates 22 D. Chinese Emissions and the Carbon Budget 25 2. IMPACTS OF CLIMATE CHANGE IN CHINA 26 A. China’s Vulnerability to Climate Change 26 B. Recent Extreme Weather Events 27 3. SHORT HISTORY OF CHINESE CLIMATE POLICY 30 PART II - DOMESTIC POLICIES 37 4. CLIMATE GOALS 39 5. URBAN AIR POLLUTION 42 6. EMISSIONS TRADING 49 7. ENERGY EFFICIENCY 53 8. COAL 57 9. RENEWABLE POWER 66 A. Hydropower 68 B. Wind Power 70 C. Solar Power 72 10. NUCLEAR POWER 76 11. NATURAL GAS 81 1 < BACK TO TABLE OF CONTENTS GUIDE TO CHINESE CLIMATE POLICY 2019 12. SYNTHETIC NATURAL GAS 87 13. VEHICLES 89 A. Chinese Vehicle Stock 89 B. Vehicle Fuel Efficiency 90 C. Electric Vehicles 92 14. HFCS AND CFCS 100 15. LOW-CARBON CITIES 105 16. GREEN FINANCE 109 17. FORESTRY 113 18. ADAPTATION 119 PART III - FOREIGN POLICIES 121 19. UNFCCC 123 20. BELT AND ROAD INITIATIVE 126 A. Background 126 B. Green Development Policies 128 C. Energy Sector Projects 130 D. Financial Institutions 138 E. Climate Impacts 142 CONCLUSION 145 CHINESE CLIMATE POLICY: AN ASSESSMENT 146 APPENDICES 157 APPENDIX A: GOVERNMENT STRUCTURE 159 APPENDIX B: KEY PLAYERS 161 ACKNOWLEDGEMENTS 164 ABOUT THE AUTHOR 165 < BACK TO TABLE OF CONTENTS 2 GUIDE TO CHINESE CLIMATE POLICY 2019 PREFACE TO 2019 EDITION July 2019 was the hottest month ever recorded. The Secretary General of the World Meteorological Organization said, “July has rewritten climate history, with dozens of new temperature records.” Temperatures soared around the world, including in China. A prominent Chinese scientist predicted that such heat waves would become the “new normal” in the decades ahead.1 The first edition of the Guide to Chinese Climate Policy was released in July 2018 (the third hottest month ever recorded).2 My goal was to provide an objective, factual report on climate change policies in the world’s largest emitter. Since then, trends in China’s response to climate change have been mixed. On the one hand: ● In 2018, China’s emissions of carbon dioxide, the leading heat-trapping gas, rose roughly 2.5%. This was the largest annual increase in five years.3 ● In 2018, roughly 30 GW of new coal-fired power capacity was added in China (roughly 60 midsized coal plants). Capacity additions for coal-fired power plants continued at the same pace in the first half of 2019.4 ● China’s public financial institutions continued to lead the world in financing new coal- fired power plants abroad.5 On the other hand: ● In 2018, China again led the world in renewable power deployment, adding 43% of the world’s new renewable power capacity.6 ● In 2018, China again led the world in electric vehicle deployment. Roughly 45% of the electric cars and 99% of the electric buses in the world today are in China.7 ● In 2018, seven of the world’s nine nuclear power plants that connected to the grid for the first time were in China.8 1 Brady Dennis and Andrew Freedman, “Here’s how the hottest month in recorded history unfolded around the world,” Washington Post (August 5, 2019); Matthew Walsh and Du Caicai, “Deadly Heat Waves Could Be China’s ‘New Normal,’ Scientist Warns,” Caixin (August 7, 2019). 2 “Another exceptional month for global average temperatures,” Copernicus Climate Change Service (August 5, 2019) 3 See Chapter 1 at note 20. 4 See Chapter 8 at note 13. 5 See Chapter 20 at note 39. 6 See Chapter 9 at note 1. 7 See Chapter 13 at note 16. 8 See Chapter 10 at note 1. 3 < BACK TO TABLE OF CONTENTS GUIDE TO CHINESE CLIMATE POLICY 2019 ● In December 2018, the Chinese delegation played an important role in helping shape a global consensus on steps to implement the Paris Agreement at the 24th Conference of the Parties to the UN Framework Convention on Climate Change (COP-24) in Katowice, Poland.9 ● On several occasions, including in July and August 2019, China’s leaders publicly reiterated their commitment to fighting climate change.10 Political tensions between China and the United States escalated dramatically during the past year. Challenges related to the China-US trade war focused China’s leaders on economic stability and energy security. Some observers noted that climate change appeared to be a lower priority as a result. Others noted that the Chinese government has used its commitment to limiting emissions and acceptance of climate science to draw contrasts with the Trump administration, positioning itself favorably in the eyes of many around the world. Climate change is a big topic. It involves natural systems, energy systems, financial systems, political systems and more. Not surprisingly, China’s response to climate change is complicated and multifaceted. In some ways, China is a leader when it comes to fighting climate change. In other ways, China lags. Yet this is clear: there is no solution to climate change without China. China’s transition to a low- carbon economy will have far-reaching consequences not just for China but the entire world. The 2019 edition of the Guide to Chinese Climate Policy provides an updated resource for anyone interested in China’s response to climate change. I hope you find it useful. 9 See Chapter 19 at note 9. 10 See Chapter 3 at note 25. < BACK TO TABLE OF CONTENTS 4 GUIDE TO CHINESE CLIMATE POLICY 2019 INTRODUCTION In 2018, China was the world’s leading emitter of heat-trapping gases by a wide margin. Its policies for limiting emissions will have a significant impact on the global climate for decades to come. From a historical perspective, China’s status as the world’s leading emitter is relatively recent. During most of the 19th and 20th centuries, Chinese emissions were modest. Then, in the early part of this century, as the Chinese economy boomed, Chinese emissions began to skyrocket, overtaking those from the United States around 2006. China’s cumulative emissions of carbon dioxide since the beginning of the Industrial Revolution are roughly half those from the United States. (Carbon dioxide, the leading heat-trapping gas, stays in the atmosphere for many years once emitted.) China’s leaders have declared that the impacts of climate change “pose a huge challenge to the survival and development of the human race” and that China is “one of the most vulnerable countries to the adverse impacts of climate change.”1 The Chinese government has adopted short- and medium-term goals for limiting emissions of heat-trapping gases and a wide-ranging set of policies that contribute to meeting those goals. Those policies are shaped in part by other objectives, including promoting economic growth, cutting local air pollution and developing strategic industries. This Guide examines Chinese climate change policies. It starts with a review of Chinese emissions. It then explores the impacts of climate change in China and provides a short history of the country’s climate policies. The bulk of the Guide discusses China’s principal climate policies, explaining the policy tools the Chinese government uses to address climate change and related topics. Appendices provide background on institutions that shape climate policy in China. What are “climate policies”? Monetary and fiscal policies affect emissions and could therefore qualify, as could policies on many other topics. This Guide does not catalog all policies that could affect emissions or the climate, but instead focuses on policies most directly related to climate change, including those on energy, transportation, urbanization, forestry, climate adaptation and climate diplomacy. In choosing policies to focus on, I am guided in part by international convention and in part by governments’ extensive reporting on this topic. The Intended Nationally Determined Contributions submitted by more than 160 nations to the UN Framework Convention on Climate Change show a broad international consensus that policies on energy, transportation, urbanization and forestry, among others, are considered “climate policies.” The Chinese government’s official documents on climate change show the same.2 1 People’s Republic of China, Enhanced Actions on Climate Change: China’s Intended Nationally Determined Contributions (June 2015) at p.1; People’s Republic of China, First Biennial Update Report on Climate Change (December 2016) at p.1. 2 “INDCs as communicated by Parties,” UN Framework Convention on Climate Change. 5 < BACK TO TABLE OF CONTENTS GUIDE TO CHINESE CLIMATE POLICY 2019 Several official documents are important resources for anyone interested in China’s climate policies. Every year the National Development and Reform Commission (NDRC) publishes a report on China’s Policies and Actions for Addressing Climate Change.3 These reports provide detailed information on a range of topics. Other key sources for understanding China’s climate policies include: ● China’s Intended Nationally Determined Contributions, submitted to the UN Framework Convention on Climate Change in June 2015;4 ● Work Plan for Controlling Greenhouse Gas Emissions in the 13th Five-Year Plan, issued by the State Council in October 2016;5 ● China’s First Biennial Update Report on Climate Change, submitted to the UN Framework Convention on Climate Change in December 2016;6 ● China’s Second Biennial Update Report on Climate Change, submitted to the UN Framework Convention on Climate Change in December 2018;7 and ● China’s Third National Communication on Climate Change, submitted to the UN Framework Convention on Climate Change in December 2018.8 Several themes run through these documents, including strong commitments to low-carbon development, cutting coal use, scaling up clean energy sources, promoting sustainable urbanization and participating actively in climate diplomacy.
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