China’s climate goals need $14tn for power and transport, says World Bank

Chart showing that China's carbon neutral goal will require a faster pace than other big polluters

China will need an estimated $14 billion in energy and transport investment to reach Beijing’s goal of net zero emissions by 2060, according to a World Bank report, as the ruling party’s congress this week reinforced a commitment to a “revolution of green energy”.

China’s decarbonisation plan should decouple economic growth and emissions at a faster pace and at a lower income level than in advanced economies, the bank warned, as it made “significant investments in massive green infrastructure and technology expansion”.

But China could also benefit from some advantages, the World Bank said, such as its position at the forefront of developing low-carbon technologies. China is already home to a third of the world’s installed wind power and a quarter of its solar capacity.

In his opening speech to Congress, President Xi Jinping outlined his plan to “virtually eliminate” pollution, despite a central message emerging on energy security, food security and other key supplies that power the Chinese economy, China reported Independent dialogue.

State media also quoted Wang Wenbin, a spokesman for China’s foreign ministry, as saying that China hopes “countries can overcome difficulties as soon as possible and return to the right path of green and low-emission development of carbon, to achieve together the goals of the Paris Agreement”.

Chart showing China's decarbonization needs $14 billion for energy and transportation

China, the world’s largest annual producer of greenhouse gases, is being “severely affected” economically by global warming, the World Bank has noted. Its low-lying coastal cities, which account for a third of China’s gross domestic product, are affected by rising sea levels, storm surges and coastal erosion.

Also Read :  Xinjiang: UN rights council rejects debate on China's treatment of Uyghur Muslims

Inland provinces in northern and western China are increasingly exposed to heat waves and drought, intensifying the risks of water shortages and impacting rural farmers.

Ilaria Mazzocco, a fellow who serves as director of Chinese business and economics at CSIS, a Washington think tank, said there is “an understanding in Beijing that by reforming their energy system, they can become a more efficient economy.” .

President Xi pledged in 2020 that China would peak CO₂ emissions by 2030 and achieve net zero emissions by 2060. Achieving this goal would require reducing demand for coal in China, which accounts for half of global consumption, by nearly zero.

Also Read :  New book celebrates Petrolia's 'Crude Genius'

According to China’s National Bureau of Statistics, coal accounted for 56% of China’s energy consumption in 2021.

Chart showing that energy-related emissions account for the largest share of total GHG emissions in China

Lockdowns to contain the coronavirus have reduced industrial demand in China, and coal consumption fell 3 percent in the first half of 2022, the International Energy Agency estimated.

Blackouts in the early summer during extreme heat spells prompted Beijing to provide additional assistance to coal-fired power plants to help maintain electricity supplies as energy demand rose.

Beijing has made “serious efforts” to reduce its reliance on coal, said Jennifer Turner, director of the Wilson Center’s China Environment Forum. “But you have to see this as an attempt to turn the Titanic, right?”

China’s energy sector – China’s biggest source of carbon emissions – should first be decarbonised to achieve the rapid emissions reductions needed over the next two decades, the World Bank has said, with investment in solar and wind power steadily falling the use of coal.

Also Read :  China cultural center donates books to Egypt's Alexandria library-Xinhua

Electrification and increased energy efficiency would boost the decarbonisation of Chinese industry in the short term, the World Bank said.

Continued investment in public mass transit systems and electrification would reduce emissions from this sector.

Of the estimated $14 billion in additional investment needed between now and 2060 for energy and transport, the bank said most should be front-loaded to avoid locking in carbon-intensive assets.

Public investment would be “necessary but not sufficient to meet overall investment needs,” the World Bank said in its report. “They will need to be complemented by good sectoral policies, broad regulatory reforms and new standards to fully exploit the potential and stimulate private sector investment and innovation in these sectors.”

Climate Capital

Where climate change meets business, markets and politics. Explore the FT’s coverage here.

Curious about FT’s environmental sustainability commitments? Learn more about our science-based goals here


Leave a Reply

Your email address will not be published.