Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

Tohoku University Research Unit for Building a Management Scheme
for the Atmospheric Environment of Northeast Asia

Working paper 2015-2

Assessment of China’s GHG emission reduction target for 2030
To peak CO2 emission in 2013 instead of 2030 !?
	
 May 12, 2015
Jusen Asuka, Tohoku University
asuka@cneas.tohoku.ac.jp

1. Introduction
On November 12, 2014, the Chinese Government pledged that “China intends to achieve the peaking
of CO2 emissions around 2030 and to make best efforts to peak early” in its joint statement of US-China
summit.

It is highly likely that this will be the main point of China’s Intended Nationally Determined

Commitments (INDCs).

Several research institutes have already conducted the assessment of this

China’s “to peak CO2 emission by 2030” target and have concluded that “to peak in 2030 will not be
sufficient to conform to 2 degrees Celsius target, which is the target to limit the global temperature rise
within 2 degrees Celsius since industrial revolution” (e.g. Climate Action Tracker, 2014).
Counterarguments to such conclusions are expected on the basis of the advancement in various
measures to promote energy conservation and low-carbon energies, intensity improvement, and the way
to share GHG emission reduction efforts.

Furthermore, China’s peak in coal consumption may comeearlier than expected, thereby advancing the peak of CO2 emission to come before 2030.

In fact, thecalculation based on the most recent data from the Chinese Government released on February 26, 2015
（National Bureau of Statistics of China, 2015）, indicates that China’s coal consumption and CO2
emission (from fossil fuels) have actually decreased in 2014.
In consideration of the above situation, this paper discusses China’s GHG emission reduction target
with focuses on the conformity with 2 degrees Celsius target, anticipated counterarguments, andpossibility of moving up the targets.
research institutes in the world.

For this, Section 2 introduces actual assessment made by several

Section 3 reviews possible counterarguments to such assessment results.

Section 4 discusses the most recent arguments and current situation of the peak year of coal consumption
and CO2 emission in China.

Finally, Section 5 summarizes the paper.

1Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

2. Assessment by research institutes
The Climate Action Tracker, which is the association of research institutes to review the GHG
emission reduction targets of various countries, has assessed China’s target to peak CO2 emission by 2030
announced by the Chinese Government, and has concluded that “to peak in 2030 is not sufficient for 2
degrees C target.” (Climate Action Tracker 2014)

Their reasons include: 1) GHG emission trajectory

estimated on the basis of peaking CO2 emission in 2030 is placed above the GHG emission trajectory of“Benchmark 450 scenario” in LIMITS Project, which is an international project to compare multiple
number of models (LIMITS, 2013); and 2) the resultant GHG emission reduction is less than thoseachievable with the introduction of the best available technologies (BATs).

Moreover, the analysis of

Höhne et al (2014) which has reviewed more than 40 studies and specified the GHG emission reduction
targets of 10 regions under various effort-sharing methods, implies that the China’s emission in 2030
need to be almost equal to its emission in 2010 under several effort-sharing methods such as “equal per
capita emission”.

In addition, the staff working paper of EU Commission (Commission of the European

Union, 2015) to justify EU’s 2030 target (40% reduction from year 1990) suggests that what EU
Commission considered the “fair and ambitious GHG emission reduction target of China” should be “topeak GHG emission around year 2023.”

3. Anticipated counterarguments
Against such assessments and criticisms from the international society, some may develop thefollowing counterarguments.
First, some will likely point out China’s progress in the enforcement of concrete policies and measures.
For example, China has drastically increased its investment in renewable energies in recent years.
According to Renewable Energy Policy Network for the 21st Century (2014), in the year 2013, China has
become the world’s largest investor in renewable energies, with 21% share in terms of global investment
amounts.

China invested more in renewable energy than all of Europe did in 2013.

In the same year,

China has introduced 12 GW solar energy facilities, which is 50% greater than any one nation’s single
year investment in the past.

For wind power, China is the number one country in the world since 2009,in terms of its accumulated wind power capacities.

In the aspect of institutions, China has alreadyintroduced, though in a pilot phase, GHG emission trading systems in seven of its cities/regions, with thescale second to EU’s Emission Trading Scheme (EU ETS).

Their energy taxation system has beenreformed in a way to promote energy conservation.
Second counterargument can be based on the international comparison of intensity improvements.

Topeak GHG emission by 2030, China assumes 4.5 % per year reduction in its energy consumption per
GDP (Tsinghua University Energy Economy Environment Research Institute, 2014)1. No developed
1

Assumption of the GDP growth rate is 4 to 5 %/year, and energy consumption growth of 1.5 to 2%/year.

China’s

GDP intensity was reduced by 4.8% from the previous year in 2014 (National Bureau of Statistics of China (2015).

2

Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

countries had ever reduced energy intensities at such rate during their economic development stages.
(Many developed countries had the economic growth rate of around 3% per year at their peak of GHG
emission.)

Actually, China did reduce their energy intensity by 19.1% during the period of 2006 to

2010, which was much higher than those of any other emerging countries.
Thirdly, some may criticize the “un-equitable” methodologies of GHG emission reduction efforts
sharing used in the models referenced by the Climate Action Tracker (2014) and the EU Commission.
As the calculated values of such models are based on the methodology to calculate GHG emission
reduction effort sharing under the concept of “equal marginal abatement cost” to minimize the global costof GHG emission reduction cost-effectively, it will be disadvantageous to emerging countries like China
with less historical emission. It is also important to know that “marginal abatement cost curve” to be used
for calculating cost differ widely from model to model due to different assumptions on technology, cost,discount rates, etc. (Hanaoka and Kainuma, 2012).
Whether above counterarguments have sufficient persuasive power or not, the views will differ.

For

the first counterargument, China’s introduction of various measures is easy to understand, but, when
asked whether these measures are sufficient enough or not, many will likely answer that they are not(whatever their own emission reduction efforts are).

For the second counterargument, certainly there

has been no other country in the history of the world that has realized the scale of intensity reductions
China has done.

Still, the history is a thing of the past and, in consideration of the new global challenge

to achieve 2 degrees Celsius target, the international community may find difficulty in accepting the
China’s claim that their global warming measures of today will be wholly sufficient.

For the third

counterargument, the author consider it having a certain degree of persuasiveness, in consideration of thedescriptions of equity in GHG emission reduction effort sharing stated in IPCC’s Fifth Assessment
Report, as well as Höhne et al. (2014).

However, it is necessary to note that the other methods of effort

sharing (for example, equalizing per capita emission) in the same Höhne et al. (2014), and Jiang et al.
(2014)2 have also indicated the need to peak emission before 2025 in China, in order to achieve global 2
degrees Celsius target.

In other words, the assessment of China’s GHG emission reduction targets

largely depends on how strongly historical responsibility is considered as the indices of equity.

4. Peaking in 2013 !?
4.1. Coal consumption peak and CO2 emission peak
In the case of China, today’s focus would be whether CO2 emission can peak “before” 2030, rather than“in” 2030.

According to aforementioned latest “Statistical Communiqué of the People's Republic ofChina on the 2013 National Economic and Social Development” 3 (National Bureau of Statistics of2

Jiang et al. (2014) used “equal per capita emission” as the methodology to share GHG emission reduction efforts.

3“Statistical Communiqué of the People's Republic of China on the National Economic and Social Development” isan annual bulletin to be published at the end of February every year.

3Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

China, 2015), it is actually possible to calculate that CO2 emission (from fossil fuels) has “peaked” in2013.

Though noted as provisional data, this bulletin describes the actual data of year 2014 for energy

consumption, coal consumption, natural gas consumption, crude oil consumption, electric power
consumption, shares of coals and renewables in final energy consumption, and others in comparison to
those of year 2013.

For example, coal consumption in 2014 was 2.9% less than that in 2013.

When

calculated based on these data, the CO2 emission (from fossil fuels) has peaked in 2013, or at least has
decreased in 2014 (Fig. 1). 4

Fig. 1. Changes in China’s coal consumptions and CO2 emission (from fossil fuels) based on
National Bureau of Statistics of China (2015)
Reference: Clean Technica, March 13th, 2015
http://cleantechnica.com/2015/03/13/china-coal-consumption-co2-emission-drop-2014/(Accessed May 10, 2015)

The main reasons for coal consumption decrease can be attributed to the effects of various
governmental measures implemented as air pollution mitigation actions and the measures to change
industrial structures.

Economic downturn can also be one of the reasons.

More specifically, thosemeasures include: 1) tightened regulation of coals and promotion of energy conservation; 2) reforms oftaxation systems and protection measures; and 3) increases in renewable and nuclear power generation.
The actual contributions of these factors will be analyzed in the future.

4

Based on the National Bureau of Statistics of China (2015) released on February 26, 2015, Glen Peters at CICERO(Center for International Climate and Environment Research) in Norway quickly calculated that total CO2 emissions
from fossil fuels and cement production in China has decreased by 0.7% in 2014 from 2013.
（https://twitter.com/Peters_Glen/status/570929352831066112/photo/1）

4

Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

4.2. Adjustment of the energy consumption and coal consumption data
In fact, there is an another noteworthy fact in National Bureau of Statistics of China (2015).

That isthe upward adjustment (modification) of data for energy consumption and coal consumption in 2013
(Table 1).
Table 1. Energy consumption, coal consumption and share of coals (before and after adjustment)2014

2013 (after adjustment)2013 (before adjustment)

Difference (%)

Energy consumption (Mtce)

4260

4168

3750

11.1

Coal consumption (Mt)

3940

4054

3465

17.1

Share of coals (%)

66.0

69.5

66.0

-

Reference: National Bureau of Statistics of China (2015) and National Bureau of Statistics of China (2014)

As long as the author knows, some researchers were already aware of the possibility of the Chinese
Government making upward adjustment of its energy consumption and coal consumption data before thepublication of National Bureau of Statistics of China (2015) on Feb.26, 2015.

It is also well known that

China’s National Bureau of Statistics did modify their data of coal consumption in the past.

For

example, the drastic reduction in coal consumption reported for the period of 1998 to 2002 was latermodified due to the correction to raise the number of coal consumption.

The reason for such correction

at that time was said to be the error in the statistics of small coal mine.

Even in more recent statistics,

researchers indicated some discrepancies between the total coal consumption of the nation and the sum ofsectoral coal consumptions in China. (Horii, 2015)
This time, the direct cause or background of upward adjustment in energy consumption and coalconsumption can be statistical “under-reporting” of local governments and enterprises, in response to thecentral government’s tightening of regulations for air pollution and energy conservation measures.5
Until more detailed analysis is done, however, no clear-cut conclusion can be drawn.

Still, it is fairly

certain that statistics of coals has some problems.
From the historical viewpoint, however, the Chinese Government has gradually improved the accuracyof statistical data to some extents, as they develop and establish various systems of relevancy.

Moreover,it is also true that they now have better capacity to verify the accuracy and reliability of statistical data

5

In China, a veto by one vote system has been implemented, in which the achievement of environmental and energy

conservation targets becomes the key indices in evaluating the performances of local government officials.
Therefore, these officials feel strong pressures to meet such targets.

In 2010, the heating energy supply was forcibly

stopped in some places to meet energy conservation targets under the 11th Five-Year plan (for 2006 to 2010), causing
serious problems in the society.

5Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

through multiple methods.
As for the future development, the Chinese Government is likely to continue further its industrial
re-structuring, and the enforcement of more strict air pollution measures, while unlikely maintaining rapid
economic expansion.

Their power generation capability in renewable and nuclear has actually increased.

Most recently (March 21, 2015), the Shen Hua Group, a major coal supplier in China, published theirforecast that “coal sales in 2015 will decrease by 10% from 2014”.6Moreover, according to the Reuters,in 2014, utilization rates at China's thermal power generators fell to a lowest-ever 53.7 percent, downfrom 57.3 percent in 2013 and resulting in coal for power use dropping 1.3 percent compared with 2013.
In addition, utilization rates at thermal power plants - nearly all coal-fired - have dropped to 52.2 percent
in the first two months of 2015, Reuters calculations based on monthly power generation andconsumption figures show. If that rate holds for the full year, it would be a new annual low7.
There are two important factors to be addressed regarding future coal consumption. First factor is how
coal-to-gas and coal-to-oil projects will develop in the future since these projects are the biggest source ofadditional coal demand outside the power sectors (Myllyvirta, 2014). However, the economic
environment to invest on these projects is not so favorable currently and massive water supply required inthese projects may cause another environmental problem in water-scarce China. Second factor is thepossibility of Chinese Government introducing measures to stimulate the economy if very serious
economic downturn continues, which may result in the increase of the coal consumption.
Therefore, although some uncertainty remain, coal consumption is not likely to increase significantly
but rather decrease in the near future, making it necessary to consider the problem of upward adjustmentin the statistical data of 2013 or before, separate from the trend of coal consumption decrease in 2014 andafterward.
As shown in Table 2 below, recent studies and reports published from several international research
institutes and market analysts indicate that China’s peak of coal consumption will come unexpectedly
earlier.

Moreover, many researches listed in Table 2 assume some time laps of two to 10 years between

the peak of coal consumption and that of CO2 emission.8
	  In other words, whether China’s coal consumption really hit the peak in 2013 or not, it is possible that
China’s coal consumption peak before year 2020, if the current domestic and international situation inpolitics and economy continues, according to the projections made by many researchers and market
analysts.

With due consideration to a time lag in peaking time, it means that CO2 emission will likely

peak well before 2030.

6

http://reneweconomy.com.au/2015/more-signs-of-peak-coal-as-chinas-shenhua-forecasts-10-sales-decline-35119

7

http://www.reuters.com/article/2015/03/26/china-coal-idUSL3N0WL32720150326

8

For the coal consumption peaking issues, including the trends of Chinese energy policies, refer to Li (2014), Shuo

and Myllyvirta (2014), Myllayvirta (2014) and Myllayvirta (2015).

6

Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

Table 2. Assumed peaks of coal consumptions and CO2 emission of China in various studies
Study names
Zhou et al. (2011)

Scenario names
Continued
Improvement
Accelerated
Improvement

Peak year of coal

Peak year of CO2

consumption

emission

2030

2032

2019

2027

IEA WEO (2013)

New Policies

2025 (flattening)

NA

Citi Research (2013)

Transition

2017

NA

Deep Transition

2015

NA

Current Policy

After 2040

After 2040

New Policies

2030

2030

450 ppm

2020

2018

2030 (peaking)NA

Continued Effort

2035

2040

Accelerated Effort

2020

2030

2015

NA

2016

NA

2020

NA

2015-20192025-2030

IEA WEO (2014)

Chinese Academy ofEngineering (2011)
Tsinghua University
Energy Environment
Economy ResearchInstitute (2014)
Bernstein Research(2014)
Deutsche Bank (2014)
China National Coal
Association (2014)
Li (2014)

Notes
Research group of Lawrence
Berkeley National Laboratory ofUSMarket analysis by a privatecompany in the US
New Policies scenario considers
the effect of PM2.5 measures tosome extent

A part of global Climate New
Economy ProjectMarket analysis by a privatecompany in the US
Market analysis by a privatecompany in Germany
Association of the companies in
the industry
ResearchbyNagaokaaprofessor

University

atofTechnology in Japan
Zhang et al. (2014)

Jiang et al. (2014)

No Policy

After 2050

Joint

research

researchers

of

work

between

MIT

and

of

Continued Effort

2030

2040

Accelerated Effort

2020

2030

Baseline

NA

2040

Research using the integrated

Low Carbon

NA

203（flattening）

assessment model by researchers

2020 (peaking)

2030

NA

2020

2030

NA

Coal-Control

2020 (flattening)NA

2 degrees2020 (peaking)NA

Enhanced Low
Carbon2 degreeYang (2014)

After 2050

EnergyConservation

Tsinghua University in China

at Energy Research Institute under
the National Development andReform Commission in China
Result

of

China

Coal

Consumption Cap Project, a joint
research project between NRDC
(US’s

research

institute)andseveral Chinese researchers	  Note: “Peaking” means decrease starts. “Flattening” means increase stops.

7

Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

In terms of the CO2 emission, the Chinese Government may revise conversion rate to calculate CO2
emission from fossil fuel combustion due to change of the contents of the fuels, which may result inincreasing the CO2 emission. It seems that the Chinese Government is considering all issues mentioned
above and is going to make the INDCs public in June, which will clarify many of these issues.
The joint statement of the US and China did refer to the 2 degrees Celsius target, while describing thatthe current target is not fixed.

If the peaking of coal consumption before 2020 becomes quite apparent,or the peak in 2013 is ascertained to some extents, it is possible that the Chinese Government may
advance the peak year of GHG emission reduction earlier at some point.

5．Conclusions
To assess China’s GHG emission reduction target for 2030 may influence the assessment of othercountries’ GHG emission reduction targets. This is because there may be some countries that would try tojustify their targets “in comparison to China.”

In this respect, also, the assessment of China’s GHG

emission reduction target for 2030 has special significance.
	  Now, if we are to consider 2 degrees Celsius target, and do not place much emphasis on historicalresponsibilities, then not many research institutes will evaluate China’s GHG emission reduction target“to peak in 2030” as “fair and ambitious” target.

Undoubtedly, some will try to make various

counterarguments against such assessments, but the author is skeptical of some of their persuasiveness.
Depending on how much importance being placed on historical responsibilities, the assessment ofChina’s targets can be varied widely.
In addition, China has upwardly adjusted its statistical data of energy and coals as discussed in thelatter half of this paper which made many researchers troubled to find appropriate interpretation of suchadjustment as well as CO2 emission peak.

As long as the author knows, many of those involved in

China’s energy and climate change policy issues are already aware of the upward adjustment of statistical
data with the decrease in coal consumption and possible CO2 peak.

Because the peaking comes muchearlier than assumed, and probably because of a tactical reason for international negotiation, not many
officials and relevant researchers would claim that the decrease of CO2 emission will continue as is. It
seems that quite a few recognize the high possibility of coal consumption decrease, while taking "waitand see" attitude towards CO2 emission decrease.

As for the upward data adjustment issue, it seems

many are also waiting for the revision of the previous years' data, i.e., data before 2013.

However,these data adjustments simply make the international community more doubtful in the reliability ofChinese data, which may, in some degree, strengthen criticisms to China’s GHG emission reduction
commitment and its climate policy itself.
	  Still, several international research institutes as well as market analysts have indicated the possibility of
China’s coal consumption peaking much earlier than expected, since several years ago.

There is little

8Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

doubt that China is experiencing many structural changes in its energy mix and industrial structures
because of many reasons including air pollution mitigation.

In this sense, the issue of upward

adjustment of statistical data until 2013 and the declining trend of coal consumption in 2014 and later be
discussed separately.

And it seems more appropriate to assume that coal consumption and CO2 emission

are not likely to show significant increases in the future.
	  The shrinking of global carbon budget due to China’s data adjustment is a “bad news”, but it will bebetter and, probably, more appropriate to accept the possibilities of much earlier peaking in China’s coalconsumption and CO2 emission as a “good news”.

9Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

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Assessment of China’s GHG emission reduction target for 2030: To peak CO2 emission in 2013 instead of 2030 !?

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