Renewed joint Sino-US efforts to tackle climate change, announced during the Asia-Pacific Economic Co-operation forum in San Francisco, highlight one of the few areas in which the world's two leading powers can find common ground. But their latest commitments come against a backdrop of a possible structural shift in China's emissions trend, which could see a boost in coal use, and a clean energy industrial policy that will likely add to geopolitical tensions with the US and Europe.
In the 14 November Sunnylands joint statement, China and the US reaffirmed their 2021 agreement to co-operate on reducing carbon emissions in the power generation sector, cutting methane emissions and boosting renewable energy. Within this framework, China has committed to developing a 2035 economy-wide emissions reduction target that covers all greenhouse gases, not just CO2, according to non-profit Asia Society Policy Institute (ASPI) China climate hub incoming director Li Shuo. The statement shows China is "increasingly comfortable to consider its post-peaking emissions trajectory", he says.
China's new methane plan, unveiled this month, is widely regarded as a positive move ahead of the UN Cop 28 climate summit — due to begin on 30 November in Dubai. But it may be a challenge to implement. Climate envoy Xie Zhenhua acknowledged last year that China is struggling to accurately collate methane emissions data. Statistical problems have also plagued the country's efforts to expand its national emissions trading scheme beyond the power sector.
China's CO2 emissions are set to fall in 2024 and could face structural decline because of record growth in new low-carbon energy sources, according to international organisation the Centre for Research on Energy and Clean Air (CREA). China's CO2 emissions may rise by 542mn t this year, but could drop by 249mn t next year and fall by another 64mn t in 2025, CREA says. A 4.7pc year-on-year rise in third-quarter emissions this year can be attributed to growth in oil demand from sectors affected by pandemic control policies, which were lifted in December, CREA says.
"The most striking growth [in low-carbon energy sources] has been in solar power, where expected installations in 2023 — some 210GW — are twice the total installed capacity of solar power in the US and four times what China added in 2020," CREA says. But China's rising renewable power generation also increases its need to sustain coal-fired power, to complement renewables' intermittency.
Beijing will pay coal power generators a capacity tariff based on a calculated fixed cost of 330 yuan/kW/yr ($46/kW/yr) from January, aimed at compensating utilities for losses that would likely encourage more coal-fired power generation. Coal mining is the single largest source of Chinese methane emissions, at 39pc in 2014, the last available figure. China and the US agreed to include methane in their 2035 emissions cutting plans, but China is not part of the Global Methane Pledge.
Escalating trade tensions
The US and China pledged to support the G20 Leaders' Declaration to pursue efforts to triple renewable energy capacity globally by 2030. But China will have difficulty tripling its capacity from an already high base and there is limited space on the hydropower front in China, ASPI's Li says.
And the US' Inflation Reduction Act has heightened trade tensions with China. "Trade tensions are starting to shape China's climate diplomacy," Li says. This is the result of trade barriers and a recent EU probe of Chinese electric vehicles — a sector in which China is leading global growth. The Cop 28 section of the Sunnylands statement provides a light touch on what the two countries want to see from the climate meeting's outcome, suggesting either they are too far apart on many issues or they plan to leave the debates until Dubai, Li says.
