The Importance of China in Combating Global Warming

AgMRC Renewable Fuels Monthly Report
June 2015

Don HofstrandDon Hofstrand
Retired Agricultural Extension Economist

Due to China’s rapid economic expansion, urbanization and growth of its middle class, it has become the largest emitter of carbon dioxide emissions in the world, as shown below. In addition to the showing the emissions of several of the most important countries, the chart also shows Annex B countries (countries with participation in the Kyoto Protocol) and Non-Annex B countries (those without binding agreements and include Southern Asia, Middle East, Africa and Latin America).

Emissions from Annex B countries

Source: Vox Energy & Environment, “China's CO2 emissions have been plummeting lately. What's going on?”
China accounts for about 30 percent of the world’s emissions. China and the U.S. combined account for almost half of the world’s emissions.  Although U.S. annual emissions have declined slightly in recent years, China’s emissions have grown rapidly and account for about half of the increase in emissions over the last decade.  

Last November, the Presidents of the U.S. and China announced aggressive goals to reduce carbon emissions.  China pledged to a peak in its emissions by 2030 or earlier, an aggressive goal for China considering its commitment to continued fast economic growth.  Heavy industry expansion and an increasing affluent population lead to large increases in energy demand.

Can China Meet its Pledge?

Researchers at the Massachusetts Institute of Technology (MIT) and Tsinghua University in Beijing, China, have collaboratively made projections of China’s ability to meeting its pledge of peak carbon emissions by 2030. It also pledged to increase the amount of energy coming from zero-carbon sources to 20 percent by 2030.  The researchers believe that with aggressive action the goals are achievable.

The projections are based on three scenarios and five policy measures.  The scenarios are:

  • No Policy – This scenario assumes that China has no policy to restrict carbon emissions after 2010.  It provides a baseline on which to compare the other two policies.
  • Continued Effort – This scenario assumes that China remains on its current path to reduce carbon emissions. It assumes that China will reduce its carbon dioxide intensity (carbon emissions per dollar of China’s Gross Domestic Product) by three percent per year through 2050. 
  • Accelerated Effort – This scenario assumes that China moves to a more aggressive plan to reduce carbon emissions.  It assumes that China will reduce its carbon dioxide intensity by four percent per year through 2050. 

The policy measures to achieve the scenarios listed above are:

  • Carbon Price – China has been testing the potential viability and structure of implementing a carbon market in seven pilot markets across China.  The pilot markets are set-up in China’s five largest cities and two industrial provinces.  These markets are each setup somewhat differently as a way of experimenting with different options in determining the best structure for the national market.  China has been working cooperatively with the state of California on carbon-trading practices. It expects to announce and implement a national market next year.   
  • Fossil Resource Tax – a tax on crude oil, natural gas and coal.
  • Feed-in-tariff – a feed-in-tariff for wind, solar and biomass electricity that guarantees returns to renewable electricity generators.  It is financed by a surcharge on electricity prices.
  • Hydro Resource Development – a policy to reach 350 gigawatts of electricity production by 2020 and 400 by 2050. 
  • Nuclear Power Development – a policy to reach 58 gigawatts of electricity generation by 2020 and 350 (continued effort scenario) and 450 (accelerated effort scenario) by 2050. 

Projections of the amount of total primary energy required by China under the three scenarios from 2010 to 2050 are shown below, along with the composition of the energy sources for the Accelerated Effort scenario. 

China energy and climate project

Source: Tsinghua-MIT China Energy and Climate Project (CECP),

Under the No Policy scenario where there is no effort to improve carbon dioxide intensity, primary energy demand in 2050 is almost triple that of 2010.  Under the Continued Effort scenario where carbon intensity is reduced by 3 percent per year, primary energy demand is reduced to double the amount in 2050 as compared to 2010.  Under the Accelerated Effort scenario (carbon intensity decreased by 4 percent per year), primary energy demand is slightly less than the Continued Effort scenario. 

The composition of primary energy sources for the Accelerated Effort scenario changes over the forty year period.  Although oil and natural gas increase, the increase is more than offset by the reduction in coal, resulting in a total reduction in fossil fuel sources.  All of the non-fossil fuel sources increase with nuclear increasing the most, followed by wind.  

These primary energy projections impact China’s carbon dioxide emissions as shown below. 

CO2 Emissions China Enery and Climate Project

Source: Tsinghua-MIT China Energy and Climate Project (CECP),

Under the No Policy scenario, emission continue to increase, exceeding 20 billion tons annually by 2050. This is up from about 7.5 billion tons annually in 2010. The increase is due primarily to carbon emissions from coal usage that increases to over 2.8 times the current level.

Under the Continued Effort scenario, carbon dioxide emissions level off at about 12 billion metric tons per year in the 2030 to 2040 time frame.  Although this level of emissions is much better than the No Policy scenario, it only leads to a plateau in emissions and not a long-term downward trend in emissions.

Under the Accelerated Effort scenario, carbon dioxide emissions peak at about 10 billion metric tons per year, only about 20 percent above current levels and about a decade earlier than the Continued Effort scenario and then gradually declines though 2050. 

More information on the MIT/Tsinghua University research

Energy Production Investment

Most people believe that China is currently building only coal plants.  Although China has built many coal plants (about two-thirds of China’s energy production is from coal), it is a leader in clean energy investment. As shown below, China invested almost $90 billion in clean energy in 2014, well ahead of the US.  Although the US has invested slightly more than China over the last decade, it appears as though China may surge ahead in coming years.  Also, China is far ahead in installed clean energy capacity. 

Clean energy investment by coutnry

Another indicator of China’s commitment to renewable energy is the Ernst and Young Renewable Energy Country Attractiveness Index (below).  This index ranks 40 countries on the attractiveness of their renewable energy investment and deployments opportunities.  The report is issued quarterly and is based on a number of macro, energy market and technology-specific indicators. 

EY renewable energy country attractiveness index

China is ranked number one with the US following closely at number two.  The next three countries of Germany, India and Japan have scores significantly below China and the U.S.

China has a number one ranking in four technology-specific rankings – onshore wind, solar PV, biomass and hydro and a number two ranking in offshore wind.  The US has two number one rankings and three number two rankings.  Germany, India and Japan have no technology-specific one or two rankings.

Soon after the China/US announcement last November where China pledged to peak carbon emissions by 2030, China announced that it would cap coal usage by 2020.  Many analysts believe that China’s carbon dioxide emissions will peak about ten years after the country’s coal consumption peaks.  So, if China meets it commitment of a coal usage peak in 2020, it may lead to the carbon emissions peak by 2030. 

Recent analysis indicates that China may already have reached its coal peak as shown below. 

China's CO2 emissions from fossil fuel use

Source: analysis of government data by Greenpeace/Energydesk China,,

Greenpeace’s Energydesk team estimates that coal use declined by about eight percent in the first four months of 2015 as compared to the same period in 2014 resulting in a carbon dioxide reduction of about five percent. This decline is about equal to the United Kingdom’s entire emissions for a year. 

If 2015 truly is China’s peak coal usage, it will have occurred about five years ahead of schedule, opening the possibility that China will peak emissions earlier than expected.  However, it may be too early to predict a peak in coal usage.  China’s statistics have a degree of uncertainty about them often requiring significant adjustments later. 

The decline may be the result of temporary factors that are not long-term in nature. However, it appears as though China is shifting away from a heavy industry economy to a service-oriented economy.  This shift could greatly reduce the rate of growth of China’s energy demand over the long-term.


China is the 500 pound gorilla sitting in the middle of the global warming problem.  China’s carbon emissions have grown rapidly in recent years and currently account for about 30 percent of the world’s emissions.  Without aggressive policies aimed at limiting and reducing carbon emissions, China’s emissions will continue to grow at an alarming rate.

Good news arrived last fall when China’s President announced a path to greatly reducing future carbon emissions.  Research indicates that China can significantly reduce emissions without a major impact on economic growth.  However, the reduced emissions path is long and full of challenges. 

Even with a major reduction in China’s emissions, the world may still not be able to limit global warming to two degree Celsius, the limit that is considered to be relatively safe.  However, without successful limits to China’s emissions resulting in continued unabated emissions, the world will be heading towards an increase in global warming that will eventually create catastrophic climate change.