Antony Froggatt
Senior Research Fellow, Energy, Environment and Resources

China has announced that it will set a 'carbon intensity' (the level of CO2 emissions per unit of economic activity) target for 2020 of a 40-45% reduction relative to 2005.

This is the first time that China has adopted targets expressed in terms of carbon emissions, and will require the authorities on a national and regional level to measure and monitor their greenhouse gas emissions. This is an important process of making actors from the public and private sector 'carbon literate', much as the Emissions Trading Scheme (ETS) did in Europe.

China, for economic, environmental and supply reasons, is already striving to improve the efficiency of its energy sector. In the current five year plan, (2006-2010) it is attempting to improve the energy intensity of its economy by 20%. Furthermore, China has within an extremely short period of time become the world leader in both the manufacturing and installation of renewable energy, particular wind power and solar energy. Significant reductions in carbon intensity will also occur over the next decade through economic restructuring. The higher the growth of cleaner and higher value-added sectors such as services and light-industry relative to energy-intensive sectors such as steel and cement, the easier it will be for China to meet a carbon intensity target.

Despite these intensity reductions, total CO2 emissions from China will continue to increase in the coming decade. The International Monetary Fund anticipates that China's economy will grow, for the next five years, at a rate of around 9% per year. If this growth rate were to continue until 2020, the value of the Chinese economy would increase three-fold compared to 2005. With this growth rate, a 40-45% reduction in carbon intensity leads to CO2 emissions from the energy sector increasing from around 6 gigatonne (GT) in 2007 to between 10-11 GT in 2020. By comparison, in 2007 the EU's energy sector CO2 emissions were 3.8 GT.

While the announcement is a welcome signal of China's continuing commitment, the world will need China to go further in order to meet global goals of preventing dangerous interference with the climate system. A low carbon pathway for China would mean reducing carbon intensity by around 55% by 2020. To achieve this, further domestic measures would be needed, such the introduction of a carbon tax and the removal of energy subsidies for polluting fuels. However, the key question is what is the mix of mechanisms to entice China to deviate further from business-as-usual and how can the international community support this? New measures could include:

  • International research and development collaboration for low carbon technologies and new mechanisms to utilise the combined manufacturing might of China, India and the developed world to ensure rapid diffusion.
  • Accelerating the development and testing of new low carbon development to demonstrate the economic and environmental advantages of a low carbon economy.
  • Introducing new technologies and policies that prevent infrastructure that produces high levels of emissions over its operational life, for example energy efficient buildings.