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China’s Decline in Coal Consumption Drives Global Slowdown in Emissions

In his address to the World Economic Forum today, Chinese President Xi showed China’s willingness to step into a growing global leadership role, including on climate change. Xi called for all countries to hold fast to the hard-won Paris Agreement, saying “walking away” from the pact would threaten future generations, and that green development is already showing promising results. This was a continuation of the stance China took during the climate talks in Marrakech, Morocco last year, where the country indicated its intent to advance ambitious climate action.

The latest analysis from the International Energy Agency (IEA) and Netherlands Environmental Assessment Agency reflects China’s significant progress.

Coal consumption in China likely peaked in 2013, according to the International Energy Agency (IEA). Moreover, global energy-related carbon dioxide emissions have stayed nearly flat since 2013, due in large part to China’s decreasing reliance on coal. 2015 was the first time China’s CO2 emissions decreased in the last 15 years, while renewable energy capacity has increased significantly over the past three years.

The IEA also says there is evidence that some countries, including China and the United States, have begun to reduce emissions while achieving economic growth. In the United States, the expansion of renewable energy, action by cities and states, a shift to natural gas and market forces have contributed to a widespread shift toward low-carbon energy. Many have worried for years that we couldn’t change course on climate without sacrificing growth, but the evidence shows that even major emitters can reduce emissions and grow at the same time.

Global Results Reflect Domestic Action but Challenges Remain

In the levelling of global CO2 emissions, we can now see the results of domestic action. China is the world leader in renewable energy investment, with $102.9 billion in 2015. In 2013, China banned construction of new coal plants in three industrial regions, and in 2014, the country set new targets to reduce or limit coal use in 12 provinces for the period of 2014 to 2017.

China’s power sector five-year plan, released in November of 2016, shows continued momentum. The plan sets new renewable energy targets, a limit on capacity of coal-fired power plants at 1,100 GW by 2020, and a limit on the percent of coal in primary energy at less than 58 percent, down from 64 percent in 2015. In 2016, China also announced that it was halting or delaying construction of coal plants in 28 provinces. The path will not be smooth. Demand for products such as steel and cement is falling, so China is working to reduce the overcapacity left in such energy-intense industry, as it encourages investment in services. IEA analysis looking out to 2040 anticipates a continued decline in coal consumption, with some fluctuation in the next few years, but without rising to the level reached in 2013.

It remains to be seen how successful China’s recent actions will be, as well as its plans for the future. In 2017, China will launch its nationwide emissions trading system. China originally tested the system with pilot projects in two provinces and five cities, which began in 2013 and 2014. The areas that participated contain 18 percent of China’s population and 27 percent of its GDP, making it the second-largest emissions-trading system in the world, after the EU.

China has also pledged to peak emissions by 2030 at the latest, though some experts say that China is likely to peak by 2025. China committed to increase the share of non-fossil energy to 20 percent by 2030, up from 8.6 percent in 2010. This would require installation of a level of renewable energy capacity nearly equal to the entire U.S. electrical grid. Although this is an ambitious target, according to the IEA, China is on track to achieve its goals of 15 percent non-fossil energy by 2020 and 20 percent non-fossil energy by 2030.

Also promising over the past several years is U.S.-China cooperation, ranging from integrating more renewable energy into the grid to developing new emissions standards for heavy-duty vehicles to research and development on building energy efficiency and advanced coal technology. This progress on clean technology creates economic opportunities for businesses in both countries. In China, the shift to low-carbon energy is helping to address the air pollution crisis, and renewable energy employed 3.5 million workers at the end of 2015, more than the oil and gas industry. Recently, China announced investment of $360 billion in renewable energy through 2020, which is expected to create 13 million more jobs. China has announced plans to increase investment in low-carbon infrastructure as well, such as an investment of $504 billion in expanding its high-speed rail network from 19,000 km to 30,000 km by 2020, connecting more than 80 percent of its major cities. The U.S. clean energy industry has also created jobs, reduced air pollution and helped move the country closer to energy independence. At the state level, the Texas wind industry created 25,000 jobs, while the expansion of renewable energy capacity in California has led to clean energy jobs growing six times greater than overall employment growth.

Turning Point

While the world has begun taking serious action on climate change, all countries need to do more—China included. Analysis shows that “the world must urgently and dramatically increase its ambition to cut roughly a further quarter off predicted 2030 global greenhouse emissions and have any chance of minimizing dangerous climate change.” This would be necessary to keep global temperatures from increasing more than 2 degrees C (3.6 degrees F) over pre-industrial levels, which climate scientists say is the limit to avoid the worst effects of climate change.

We are at a turning point in the fight against climate change. More needs to be done, but the bending of the global emissions curve shows that changing course is possible. Each country faces challenges, but evidence from China and the United States shows why the shift to low-carbon energy is important for the economy, citizens’ lives and the climate. We are on the cusp, but we can’t afford to slow down.

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