Will China change the world with its plan to become 'carbon neutral' by 2060?

In September, China’s President Xi Jinping announced China’s intention to become “carbon neutral” before 2060. If this plan is realised, it will change the world.

Less than a month later, news that several state-operated Chinese power plants and steel makers would stop importing Australian coal received more attention in the Australian media.

Australian news analyses on China’s coal ban have focused on Australia’s deteriorating diplomatic relationship with China, and its economic impact. Coal is the third-largest Australian export to China, behind natural gas and iron ore – in 2018-19, Australian coal sales to China reached A$14 billion.

China has also stopped importing Australian wine and barley, with the Australian cotton industry expected to feel the blow in 2021.

Coal reduction is welcome news

But from an environmental perspective, China’s plans to scale down its use of coal – Australian or otherwise – is welcome news. China produces about 28% of global carbon dioxide emissions, more than the European Union and the US put together. It now joins the EU and other countries, including Canada, Japan and South Korea, in announcing a climate target by 2050, in accordance with the Paris Agreement.

President Xi says China will reach peak emissions before 2030 – it will keep burning coal in the short term, and is building coal-fired power plants. “It's like trying to slow down a really large steamship,” says Dr David Holmes, director of the Monash Climate Change Communication Research Hub.

But if China succeeds in reaching carbon neutrality before 2060, this could prevent the world warming further by 0.2 to 0.3 degrees Celsius, according to rough estimates. President Xi’s announcement, made by video link to the UN General Assembly, is the biggest climate commitment the world has seen.

'Climate villain' label is not warranted

Commentators who routinely portray China as a “climate villain” should think again, Dr Holmes says. China’s carbon emissions have often been cited by conservative politicians as a reason why Australia (and the US) should delay taking action on climate change.

“What people don’t acknowledge with China is that it’s the largest workshop in the world,” says Dr Holmes. “They’re doing the manufacturing that we’re not doing in our own country. And we’re benefiting both by selling the raw materials and also getting cheap consumer products in return.”

And if you look at the cumulative impact of greenhouse emissions from an historical perspective, China’s per-capita carbon footprint is smaller than economies such as the US and Europe, which have been industrialised for longer, he says.

As our coal and gas assets become less valuable, the economic argument for a greater investment in renewables, including green hydrogen, will become more compelling.

China’s investment in renewable energy is already substantial.

“China has sought to find energy from wherever it can get it,” Dr Holmes says. “Whether it’s coal or gas or solar power or wind power. And because of that, it actually has the largest domestic installation of wind farms in the world. It has more solar panels by kilowatt than any other country in the world.”

China is also a major exporter of solar panels and wind tower components. One in three solar panels and wind turbines are found in China, along with 47% of the world’s electric cars.

China is growing its battery storage capacity, too, and is on track to dominate the world market and its supply chains.

In the meantime, Australia’s coal workers (and our gas workers, in the longer term) will face a painful adjustment – and they’re not alone. Indonesia’s coal exports to China fell by 37% in the year to September; the Indonesians have a warmer diplomatic relationship with China.

Australia's politicians will feel the heat

China’s energy transition will also influence Australian politics, Dr Holmes predicts. Politicians who have resisted moves to commit to emissions reduction targets will be under greater pressure, he says.

Added pressure will come from Japan, where the new Prime Minister, Yoshide Saga, has announced Japan will also become carbon neutral by 2050. Japan is the third-largest economy in the world.

As our coal and gas assets become less valuable, the economic argument for a greater investment in renewables, including green hydrogen, will become more compelling.

“Australia has increased its greenhouse emissions every year since 1997 – except for 2012 to 2014, when the Gillard government had a clean energy policy that was equivalent to a price on carbon, and emissions actually began to fall,” Dr Holmes says. “This is despite the fact that we have one of the best take-ups of domestic solar in the world.” (Domestic solar and wind power together account for 25% of Australia’s domestic energy generation).

Australia’s coal and gas exports also contribute to what Australia’s Clean Energy Regulator calls “scope three emissions”. These emissions are not reported under the National Greenhouse and Energy Reporting scheme, and are difficult to calculate. They include the indirect emissions caused by extraction and transportation. “If you count those, our emissions are way above the global average,” he says.

Calls for renewables investment

The COVID-enforced pause in business as usual has led to growing calls – from both green groups and environmentally-minded business leaders – for Australia to invest more in renewables, for both the domestic and export markets.  

In the federal government’s recently released Technology Investment Roadmap, gas, coal, wind and solar are identified as “mature” technologies, and not a priority for future investment.

Instead, the Commonwealth will invest $18 billion over the next decade in technologies that it says will support the economy and lower emissions – these are hydrogen, storage options (which includes batteries), “low carbon” steel and aluminium production, carbon capture and storage (CCS), and soil carbon.

Australia has not signed up to the Paris target of net zero emissions by 2050. The government says that by following the roadmap, Australia will avoid 250 million tonnes of annual emissions – almost half of what we emit today – by 2040.