China holds the world’s climate future in its hands

U.S. and EU emissions have been declining for some years, and will continue to do so, even in the U.S. under Trump. The momentum of clean energy technologies is now too strong, as I wrote in a recent post.

But China’s overall emissions might never exceed those of the U.S., underscoring the huge responsibility the U.S., still the world’s second largest climate polluter, bears for reducing its climate pollution.

Still, whether the world has a shot at the 1.5°C target, or at least not going too far beyond that, depends on how quickly China peaks and reduces its climate pollution. China is slated to announce its 2035 target this coming February.

CREA’s survey of experts finds an increasingly optimistic perspective. Asked if China’s emissions have already peaked this year or will by 2025, 44% responded yes, up from 15% in 2022. Over 70% believe China will certainly achieve its 2030 peaking goal.

Importantly, 52% say China will peak coal consumption by 2025. The addition of over 200 new coal plants in recent years is a major reason for the surge in Chinese emissions. But only 9 GW of new plants were approved in the first half of 2024 compared to 52 GW in the same period last year. Similarly, a slowdown in addition of steel capacity – China makes over half the world’s steel – and move to greener and more efficient alternatives is a reason for optimism.

Building most of the world’s solar and wind

The greatest source of increasing optimism is China’s renewable energy boom, whose boggling scale has already exceeded its 2030 growth targets for wind and solar energy. In 2023 and 2024, China installed the majority of solar photovoltaic capacity, reports Ember. In 2023 it was 260 of 459 gigawatts, and in 2024 224 of 593 gigawatts.

Credit: Ember

Putting together the picture for Utility-scale wind and solar growth, China’s lead over the rest of the world is stunning, accounting for 64% as of July 2024, Global Energy Monitor reports.

“China added almost twice as much utility-scale solar and wind power capacity in 2023 than in any other year,” says Global Energy Monitor. ”By the first quarter of 2024, China’s total utility-scale solar and wind capacity reached 758 GW, though data from China Electricity Council put the total capacity, including distributed solar, at 1,120 GW. Wind and solar now account for 37% of the total power capacity in the country, an 8% increase from 2022, and widely expected to surpass coal capacity, which is 39% of the total right now, in 2024.”

In fact, clean energy is taking up the slack for the downturn in China’s real estate sector, which has been an important source of the nation’s growth. Clean energy accounted for 40% of economic growth in 2023, CREA reports.

China on a 1.5°C track?

But will China be able to continue? On the plus side, utility-scale solar has now become the cheapest source of power in the Asia-Pacific region, its lifetime cost dropping 13% below coal in 2023 and expected to be 32% less expensive by 2023, Wood Mackenzie reports. Adding in battery storage to firm up power supply, utility-scale PV is competitive with gas generation now, and will be competitive with coal by 2030.

The critical issue is grid capacity.

“The key constraint on clean-energy growth will be the ability and willingness of grid operators to integrate very large amounts of clean energy,” writes CREA lead analyst Lauri Myllyvirta, also a senior fellow at Asia Society Policy Institute, China Climate Hub.

He continues, “Last year, numerous provincial grid operators began to limit additions of new wind and solar, due to concern over not being able to fully integrate the additional generation . . . The challenge is that China’s grid management is outdated. Reforming grid operation requires overcoming powerful interests, most notably the owners of coal-fired power plants who are reluctant to accept the reduced space for coal-power generation that follows clean-energy growth.”

On the other side of the equation are local governments, which on the China scale rank in population with many European countries. They have been a dynamic factor in pushing renewables forward as a rural economic development strategy.

China could cut its carbon pollution 30% by 2030 compared to 2023 if it achieves certain goals, CREA projects. Continuing its solar and wind growth could give the nation 3,500 GW of renewables by 2030 and 5,000 GW by 2035. Overall non-fossil electricity could amount to 65% of supply by 2035, putting that sector on a 1.5°C Paris path.

Reducing transport emissions to 2020 levels by 2035 would align that sector with the Paris target. That would require that 60% of auto sales be electric vehicles, not a far reach from the 50% level of EVs and plug-in hybrids. The share of freight going by rail would have to increase to 25%.

Industrial decarbonization is crucial. The largest source of growth in energy use from 2020-3, 4% annually, was government emphasis on energy intensive industries such as steel and chemicals to recover from the pandemic and downturn in other sectors, notes Myllyvirta. To stay on the Paris track, industrial emissions must decline 25% from 2023 levels by 2035, CREA says. That includes 45% in steel. China’s nationwide emissions trading system recently included steel, aluminum and cement, so that should help, CREA says.

Finally, building sector emissions could drop 40% by 2035 with elimination of coal use in buildings, still substantial, as well as low-carbon standards in new buildings, retrofit of 25% of old buildings, and heat pump penetration of 40%.

China has demonstrated remarkable capacity to rapidly make major changes. It also has a major stake. Notes CREA,

“Swiss Re, the worldʼs largest reinsurer, assesses that China is among the countries most affected by the economic and physical impacts of climate change, ranking far above regions such as the European Union and North America. At the same time, as the worldʼs largest greenhouse gas emitter, Chinaʼs own energy and climate policies have a major bearing on the severity of the climate impacts the country will face.”

China has its own fate in its hands, as well as the rest of the world. We can hope it will take the needed actions that will give us a fighting chance to hold at 1.5°C, or near it.