By Julian Wong Nov.26.2009
In: climate change
12 comments

China to adopt "binding" goal to reduce CO2 emissions per unit GDP by 40 to 45% of 2005 levels by 2020

* Update Nov 28: additional commentary below by Yu Qingtai on issue of “measurable, reportable and verifiable”
* Update Nov 29: Rough calculations on what the goal means for total emissions by 2020.

So what is a “notable margin“?  That question has apparently been answered today.

Today, the State Council announced that China will commit to reduce its carbon dioxide emissions per unit of GDP, or carbon intensity, by 40 to 45 percent of 2005 levels by 2020.  It was also announced separately by the Ministry of Foreign Affairs that Premier Wen Jiabao (also the chair of the State Council, and pictured right, showing what President Hu meant by a “notable margin”…at least in my imagination) will attend the Copenhagen climate conference that begins in less than two weeks.

According to a government press release (Chinese only), these targets would be “binding” to its national economic and social development and long-term plans, and correspondingly, and mechanisms for  internal statistical gathering, monitoring and verification will be formulated:

会议决定,到2020年我国单位国内生产总值二氧化碳排放比2005年下降40%-45%,作为约束性指标纳入国民经济和社会发展中长期规划,并制定相应的国内统计、监测、考核办法。

On the that that American celebrates Thanksgiving, should the world give thanks to China, or should it deem these new targets as just one big turkey?  Let’s unpack the implications of this announcement.

Will it be enough?

The first thing to be clear on is that a carbon intensity target does not reduce absolute emissions.  It is keyed to per unit GDP, so in a growing economy, absolute emissions can still increase.

But is a 40 to 45% reduction in carbon intensity of 2005 levels by 2020 by itself meaningful?  Many seem to think not, and the numbers probably don’t match what the math requires for us to avoid a global temperature rise of more than 2 degreses Celsius.  The proposed targets are in line with expectations of what would be announced.  More than two and a half years ago, a 40 percent target was already being discussed.

It is also consistent with my prediction earlier this week in my e-mail to a reporter, when I said:

Here’s how my math shakes out.  In theory, the carbon intensity number should be higher than the energy intensity number because China is also introducing renewables and nuclear into their energy mix.  So the combination of energy conservation and increased share of non-fossil fuels leads to declines in carbon intensity that are larger than declines in energy intensity (which is agnostic to whether energy comes from coal or wind).

There’s already a 20% energy intensity target [in China] from 2006 to 2010.  For 2011 to 2015, let’s conservatively assume they go for 10% reductions [since it gets harder to squeeze out more gains the more energy efficient a system gets], and then from 2016 to 2020, another 10%.  The cumulative reduction is 40% (assuming [for the sake of simplicity] in each five year period that the base year [for carbon intensity calcusltions] is 2005). We’d thus expect carbon intensity to be reduced by more than 40%, since they are introducing more nuclear and renewables.  How much more…depends on one’s assumptions.  But 45 to 50% for carbon intensity would probably be reasonable.

The Energy Research Institute, the energy policy think tank arm of the powerful National Development and Resource Commission, recommended a range that was right in line with the announcement–40 to 44 percent.  [Update Nov 29:  I did some rough calculations. If China's 2005 GDP grow by 8 percent per year, year-on-year, till 2020, its GDP in 2020 in 3.17 times that of 2005.  If we assume carbon emissions rises in lock step with GDP growth, then a business-as-usual scenario from 2005 to 2020, assuming none of the policies in the current five year plan such as energy intensity reductions and renewable energy targets are in place, means carbon emissions in 2020 will also be 3.17 times that of 2005.  A 40 to 45 percent decline in carbon intensity by 2020 (at the assumed 8 percent growth of GDP), however, will lead to total carbon emissions that are just 1.75 to 1.91 times that of 2005 in 2020.  This is equivalent of taking an entire China (at 2005 emitting levels), and then a bit more, out of the picture by 2020.]

But there are some concerns that such a target is not ambitious enough, and some even suggest it is business-as-usual.  According to Reuters:

..critics say Beijing is almost half-way to that goal after just four years of an energy efficiency drive, and warn that an unambitious target could slow a push for cleaner growth.

Maybe the Chinese government likes to claim by 2020 there will be 40 percent reduction … but it is not aggressive enough, we have to argue for at least 45 percent,” said Yang Fuqiang [who just spoke at BEER two nights ago], director of Global Climate solutions at WWF.

Another scholar noted in the same article:

“My view is that a Chinese target of a 40 percent reduction in carbon emissions intensity between 2005 and 2020 would be a continuation of historical trends,” said Jim Watson, from the Tyndall Centre for climate change research in Britain [and whose report on China's carbon scenarios we've discussed on this blog; see previous post "Tyndall Centre Climate Report: High Hopes for Low Carbon"].

“If ‘business as usual’ is no progress in carbon intensity reduction, which is very unlikely, then 40 percent is quite big. But compared to historic trends, it is not nearly as big as it sounds,” he added in an email to Reuters.

The target also falls somewhat short of the recommendations by the China Council of International Cooperation on Environment and Development, or CCICED, of 4 to 5 percent year-on-year (see previous post “The “how much” and “how to” of China’s goal to reduce carbon intensity“), which if were applied from 2005 to 2020, would translate to about 45 to 53 percent reductions in carbon intensity by 2020 according to my calculations (but roughly consistent with my prediction).

Much of the basis of these critiques seem to be along the lines that since China is already reducing its energy intensity by 20 percent of 2005 levels by 2010 (which would translate to slightly higher carbon intensity reductions because of and increased deployment of low-carbon energy sources), it would by 2020 essentially be already halfway towards meeting this 2020 carbon intensity target.  Yes, China’s energy intensity target could be considered as business-as-usual if you want to be technical about it, since it is existing policy.  However, it is also important to recognize that the energy intensity policy is a fairly recent policy, formalized in 2007, and is certainly a deviation from energy intensity trends in China from 2000 to 2005, which was just up, up and up.  Trying to sustain carbon intensity reductions beyond 2010 at a similar pace will be extremely challenging after all the low-hanging fruit has been plucked.

Debby Seligsohn of World Resources Institute’s Beijing office has commented on precisely this issue:

There is also the question of what groups like IEA [International Energy Agency] and EIA [U.S. Energy Information Administration] are considering “business as usual” for China. They have very optimistic assumptions for energy intensity improvement, much higher than the rates they project for the United States (which are closer to 30%). While I don’t have the details of their assumptions, these BAU projections would take China’s current energy efficiency and renewable policies into account. Since the Chinese already announced these programs, they are business as usual, but they entail a significant and growing commitment. Maintaining progress is not easy, and energy efficiency, in particular, becomes more challenging as you become more efficient. China will need to move from the Top 1000 Enterprises Program to the next 10,000 or so enterprises, in other words from very large companies where you can make large changes at once to much more diverse and smaller companies. They will also need to add in new policies for buildings and for transportation.

What IEA and EIA are doing then is to project China’s energy intensity reduction policies beyond 2010, something China has not previously committed to do.  Poltiically, this is a problem.  While I applaud IEA and EIA’s optimisim and foresight on this front, it does unfairly put China is a situation of having to defend this announcement from accusations that this is what has been happening now and what they planned to do anyways.  I’m just not sure that is the case.

Tim Herzog, also of WRI, also weighed in a while back:

China’s CO2 intensity declined by 50% from 1990-2003. That means a 40% cut over 20 years is not significantly different from the historic trend. But it’s not entirely fair to conclude that China’s -40% target is “business as usual.” Carbon intensities generally decline in countries that shift away from energy intense industries (including most industrialized countries), but the trend is the opposite in countries on the receiving end of those shifts. For instance, if carbon-intense industries like cement and steel continue to move to China, as is expected, then its -40% intensity target might be a significant goal in a global context.

It Depends on the Assumptions

Certainly, the biggest unknown to the robustness of a 40 to 45 percent target is how GDP grows over the next decade and beyond.  What ultimately matters to our atmosphere is how efficiently we burn carbon, but what the absolute amounts of carbon pollution are being released into our skies.  Even at the upper end of this target range, the goal implies a 3 percent reduction of carbon emissions per year from 2006 to 2020.  This year, GDP will grow at almost triple that rate (8 to 9 percent sublingual hcg), global recession and all!  So absolute emissions is going to increase no matter what.  If GDP grows even faster, the outlook gets even bleaker.  But at some point, GDP growth will slow.  It’s just a matter of when.

How China does it calculations will also be determinative of how meaningful these commitments are.  John Romankiewicz, a carbon finance analyst at New Energy Finance told The Green Leap Forward:

…most important for this target is the 2005 baseline. The only time China ever set did a greenhouse gas inventory was in 1994, when it measured its emissions to be 4060MtCO2e. In 2007, they estimated (wasn’t official) that 2004 emissions were at 6100MtCO2e. That includes all GHGs, they said 83% of which is CO2. It may be a bit low…IEA estimates China’s total GHG emissions for 2005 to be at 7527MtCO2e. So important things to consider are: how they will measure emissions moving forward, is it going to include all GHGs or just CO2, also making sure calculations of GDP –the very important denominator in the carbon intensity equation–are done consistently

Certainly, then, the announcement last week that the U.S. Environmental Protection Agency will cooperate with China’s National Development and Reform Commission to help China create an accurate GHG inventory take on elevated importance (see previous posts “Announcements on U.S.-China Cooperation Create Path to Copehnhage Success” and “The Energy and Climate Registry: A New Initiative Toward Carbon Disclosure in Southern China“).  Its statistical gathering of energy and economic data will also improved as this can sometimes be a messy affiar, as Romankiecz has previously explained in a guest post (see “Deconstructing China’s Energy Intensity–A Lesson in Fuzzy Math“).  So it is welcome news that China will be partnering up with the Intenational Energy Agency to improve is energy data collection and analysis.

Vice Chairman Xie Zhenhua of the National Reform and Development Commission clarified in a press conference that China’s progress  would be calculated on a narrower basis compared to how other countries might account for their carbon footprint:

China’s reductions are all the emissions reductions from energy intensity (cuts), they don’t include the quantity in carbon sinks, and they don’t include other reductions, they are only the savings from the production processes and energy consumption,” he told a news conference in Beijing.

So they would not include, for instance, forestry offsets, as U.S. targets might permit.  So, there might room for better numbers if it forestry initiatives are accounted for.  On the flip side, however, it does not seem like emissions from agricultural processes will be accounted for, such as the commitment to ncrease forest coverage by 40 million hectares and forest stock volume by 1.3 billion cubic meters by 2020 from the 2005 levels.)  Further Xie’s emphasis on energy intensity cuts also also strongly suggests that the measurements it will only take into account CO2 emissions and not other greenhouse gases, although the term “production processes” is vague enough to indicate otherwise.

Trust but Verify?

What is also notable is that the State Council wants these targets to be binding as to their national economic and social development plans, i.e. their five year plans and related documents.  This fulfills a promise made in August, and is extremely helpful, but it does not necessarily mean that it is ready to make them binding international commitments.  In the same press release, however, they say that its carbon intensity target, together with its efforts in the development of low-carbon energy sources and reafforestation, are “independent actions in accordance with its national commitments (“这是我国根据国情采取的自主行动…”)” [my translation].  Xinhua has translated “自主行动” as “voluntary actions” rather than “independent actions.” The idea that it is voluntary would suggest that such an action is not binding, but Xie Zhenua, Vice Chairman of the NDRC, has made it clear that it would at least be domestically binding, and that it would “never swerve” from this commitment.  But whether it is “voluntary” or “independent”, it seems that at this juncture it is a policy that is unilteral in nature and not tied to direct foreign financial and/or technology assistance in the context of a global climate treaty. In the past, China has stated that such unilateral actions should not be subject to external verification procedures.

Also worth noting is that they are committed, in achieving this target, to implementing transparency mechanisms on reporting, monitoring and verification (“制定相应的国内统计、监测、考核办法”).  It should be noted that the State Council was careful to say that these mechanisms would be internal (“国内”), and thus clearly implying that it would not be subject to international verification.

[UPDATE Nov 28:  China's climate change envoy Yu Qintai also made clear the day after the carbon intensity goals were anounced that only reductions under its newly announced carbon intensity targets that have international financial support will be open to external MRV:

Actions would be measurable, reportable and verifiable if (international) support is measurable, reportable and verifiable...If you look at the magnitude of the measures that were announced yesterday, I would assume only a very small proportion would come under this particular provision.  You cannot apply the same kind of standards for actions that we take on our own, with our own resources, (as you do) for actions that we take with international support.

China has just reiterated this stance over ther wekend through a list of "non-negotiables" it has come to agreement with Brazil, India and Soth Africa.]

So it remains to be seen in Copenhagen if China will be willing to (a) commit these targets in a binding international agreement, and (b) subject such commitments to an international standards of “measurable, reportable and verifiable”, or MRV, in a way that would be willing to “open its books and defend them.”  Certainly, China’s declarations out of the China-U.S. presidential summit last week on “full transparency” and a resolve to “stand by these actions” push them in that direction (see previous post “Announcements of U.S.-China Cooperation Create a Path to Copenhagen Success“) are encouraging, but those declarations are not the same as promises for MRV under a legal treaty.  But we’ll just have to see, and the Chinese government will have to be continued to be encouraged.

The Bottom Line

What this new carbon intensity target says is that China is politically committed to continuing its policy of energy conservation and low-carbon energy deployment beyond 2010, in its 12th and 13th five year plans. Said Jake Schmidt, international climate policy director at the Natural Resrouces Defense Council, in an exclusive interview with The Green Leap Forward:

This announcement shows that China is committed at the highest-level to dealing with this challenge and that it will take clear steps to reduce its global warming pollution.

This not simply a case of China making commitments to do something it has already planning to do.  By adopting a carbon intensity target, it is implicitly obligating itself to report, monitor and verify carbon emissions on a regular basis for the first time (see previous post “China’s Carbon Intensity Plans and its Implications for Climate Progress“). Also, China never previously committed to reduce energy intensity beyond 2010, but now it effectively has.  It will involve significant investments and structural changes to industry, an exceptionally challenging endeavor in light of its “factory of the world” status.  But let’s also not forget that its current energy intensity target will avoid the emissions over a billion tons of carbon emissions by 2010 than it otherwise would  (by comparison, the European Union’s targets under the Kyoto Protocol translate to an annual absolute reduction of 300 million tons of carbon dioxide by the end of its compliance period in 2012).

Its political significance with respect to Copenhagen cannot go unsaid as well.  In fact, it almost seems like the dual announcements of China carbon intensity targets and attendance of Premier Wen at Copenhagen is a direct riposte to the U.S. announcements yesterday that President Obama would go to Copenhagen with a provisional emissions reduction target of 17 percent below 2050 levels (UPDATE Nov 28: was the timing purely coincidental?  Or was it coordinated, or more interesting yet, completely orchestrated?  I would like to think that this is a tangible and direct result of President Obama’s diplomacy with China over the course of the year, culiminating in the presidential summit last week) .  With the world’s two major emitters sending their top leaders to Copenhagen with gifts of numerical targets, and with the U.S. successfully engaging India to commit to a successful Copenhagen outcome just as it did with China (see my guest post on Climate Progress on the new U.S.-India Green Partnership), momentum is definitely picking up as with just a week and a half to go before the Copenhagen climate conference begins.  Together, China, United States and India account for nearly half the world’s emissions, getting these three carbon Colusus’ to commite to a succesful international outcome is a major step forward.

I am also optimistic that we may see China revise these targets upwards, according to what the science requires, as implementation of these goals progresses. China has showed a willingness to do raise clean energy targets this year when it strengthened its wind energy and solar energy goals for 2020. China can be encouraged to do the same for carbon emissions, and to pledge these commitments in an international agreement subject to international standards of MRV.  The best way to do that is for the rest of the world to help China with important capacity building initiatives in GHG reporting and monitoring, and by walking the talk by demonstrating their own commitment to robust climate action.

Comments (12)

  1. frasse Dec.1.2009@4:08 pm Reply

    of course the world needs more like 80% reduction asap….but hey, this is a step and mind you, in my view, China seems to be taking a more responsible approach to its growth than the US ever did (probably ever will too)
    F

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