China’s absence at COP26, the UN climate conference held in October last year, caused a fair amount of multilateral unease, not least from US president Joe Biden, who bluntly said: “Not showing up? Come on.”

And that’s not all he had to say: “It's a gigantic issue ... [China] walked away. How do you do that and claim to be able to have a leadership mantle?”

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China’s head of state, Xi Jinping, may not have attended the conference, but it is difficult to assert that China is walking away from the looming cloud of climate change domestically. 

Despite its economic success going hand-in-hand with an increase in carbon emissions, the country now has half of the installed global wind and a third of global solar capacity; if nothing else, the country has sent strong signals that it wants to green its economy.

In January, the State Council unveiled plans to conserve energy and reduce emissions, as the country targets reducing energy consumption per unit of gross domestic product by 13.5% from 2020 levels by 2025. In 2020, Mr Xi announced that China plans to become carbon neutral by 2060.

Carbon neutrality

But how will it get there, can it get there and what are the main hurdles the country needs to overcome?

Foundations for a Low-Carbon Energy System in China tackles these questions in detail and with dexterity. Written by Henry Lee, Daniel P. Schrag, Matthew Bunn et al., it is a book about long-term climate policy and the challenges in China’s decarbonisation journey as perceived from the present day.

In-depth chapters explore the country’s coal dependency, its need for renewables penetration, its bet on nuclear expansion, its rigid grid system, governance concerns, market incentives and electric vehicles (EVs). 

This is by no means a comprehensive picture of China’s low-carbon present and potential future; however, it searchingly peels back the country’s road to decarbonisation to show how important short-term policy decisions will be for decades to come.

One refrain of the book is the phrase “beyond 2030”, stressing that there is great uncertainty as to how the country will transition from the targets at the end of this decade to those towards the middle of the century. In so doing, the book draws attention to the fact that China’s low-carbon future should be understood in stages and contingencies — a useful lesson for any discussion on the energy transition the world over. 

In broad terms, China’s foundations for a low-carbon world are its growing capacity of wind and solar, its renewables commitments at a national and provincial level and its deployment of EVs. 

Coal challenges

Meanwhile, the challenges facing the country as it builds upon these foundations are manifold: the country’s coal addiction, the national grid system, managing the intermittency of renewables as they are brought online and harnessing technology — such as batteries, nuclear and carbon capture — to see the country through the post-2030 era.

Mr Schrag and Mr Lee warn in their introduction that “if one evaluates energy policies and electricity market reforms in China today, purely based on the near-term emissions targets over the next decade, some important opportunities for long-term technology development may be lost”.

Most alarming is the chapter on coal, which explains that with more than a terrawatt of coal-fired power capacity, China is now home to some of the most efficient coal facilities in the world. The chapter’s author, Michael R. Davidson, calls on coal to be converted from “a barrier to a bridge”, as coal assets should get repurposed and become more flexible as they provide less ‘baseload’ and more variable power.

Unlike in India and other coal-consuming nations, where it is largely used for electricity generation, coal also serves industry and residential heating in China. This then piles on serious sociopolitical concerns for when and how coal is phased out, such as public resistance and worker displacement.

Other concerns revolve around the electrification of its transportation sector, the decarbonisation of the industrial sector, the scale of the transition required, its increasing energy demand and societal obstacles related to ramping up its nuclear energy capacity.

But perhaps if China manages all these things, then it will feel at liberty to hold up its climate leadership mantle on the world stage. 

This article first appeared in the February/March 2022 print edition of fDi Intelligence. View a digital edition of the magazine here