China Makes No Promises On Emissions

The announced agreement between the United States and China on carbon dioxide emissions is not an historic breakthrough. If consummated, the deal announced Wednesday would require China to end the increase in its greenhouse gas emissions by 2030 and to increase its non-fossil fuel energy production to 20% by the same year. The U.S. woukd agree to reductions of at least 26% below 2005 emissions levels by 2025. While these commitments by the world’s two largest greenhouse gas producers are impressive at first blush, the agreement devolves into a U.S. promise to curb economic activity without any reciprocal changes in Chinese policy.

First and foremost, China’s obligations would be illusory. An April, 2011, U.S. Department of Energy report from the Lawrence Berkeley National Laboratory concludes that China’s CO2 emissions would – surprise – peak in or about 2030 based on China’s existing policies and economic outlook. In the first paragraph of the abstract in “China’s Energy and Carbon Emissions Outlook to 2050,” the authors note that “China has taken serious actions to reduce its [energy per unit of GDP and carbon dioxide per unit of GDP] by setting both a short-term energy intensity reduction goal for 2006 to 2010 as well as a long-term carbon intensity reduction goal for 2020.” Later the abstract continues:

It is a common belief that China’s CO2 emissions will continue to grow throughout this century and will dominate global emissions. The findings from this research suggest that this will not necessarily be the case because saturation in ownership of appliances, construction of residential and commercial floor area, roadways, railways, fertilizer use, and urbanization will peak around 2030 with slowing population growth. The baseline and alternative scenarios also demonstrate that China’s 2020 goals can be met and underscore the significant role that policy-driven energy efficiency improvements will play in carbon mitigation along with a decarbonized power supply through greater renewable and non-fossil fuel generation.

DOE estimates China’s CO2 emissions are going to peak at a bit under 12 billion tons in 2030 if China continues its current policies.

China’s renewable energy commitment is also redundant, or nearly so. The Washington Post noted that China “must add 800 to 1,000 gigawatts of nuclear, wind, solar and other zero-emission generating capacity by 2030 — more than all the coal-fired power plants that exist in China today and close to the total electricity generating capacity of the United States.”

Once again, though, China’s existing policies and economic trajectory will account for much or all of this obligation. According to the 2011 DOE report, China’s “growth rates for non-fossil based electricity generation are remarkable and exceed 10% on annual average basis for solar, wind and nuclear capacity . . . In the [current conditions] case, total installed solar capacity in China in 2020 reaches over 25% of current global installed capacity and wind capacity reaches over 60% of current global capacity.” A chart in the DOE report reflects that energy production from nuclear, hydro-, wind-, solar-, biomass and other non-carbon sources would be well over 20% by 2030 with no change in Chinese policy.

China’s proposals may look impressive on paper, but in practice merely require staying the course.

This is not particularly surprising. China’s spectacular economic growth has been fueled in part by massive industrial and power generation investment with little or no regard to environmental impact. As a result, while China only surpassed the U.S. as the world’s largest emitter of carbon dioxide in 2007, Chinese emission were nearly double the U.S. total by 2012.

But as China’s economic miracle slows and peaks, China’s emissions will likewise plateau. China’s GDP growth peaked in 2007 at 14% and has declined to under 8% in 2012 and 2013. Growth in demand for energy and products has likewise declined and is expected to continue to shrink.
As demand growth shrinks, an ever greater proportion of investment that previously went into new industrial and coal power projects can be diverted to non-fossil fuel energy production or retrofitting existing plants to reduce emissions.

The U.S.’s promises, on the other hand, have real teeth. President Obama previously committed to reducing emissions by 17% from 2005 levels by 2020. The new commitment is to reduce emissions by at least 26% from the 2005 level by 2025, or an additional 9% over only 5 years. If implemented, U.S. emissions in 2025 will be a bit less than 4.5 billion tons, approximately one third China’s projected 2030 limit.

There is no indication yet where U.S. reductions will come from. Most likely it will be further reduction in coal power generation by direct regulation of the industry or government subsidizing competitors. In either event, consumers’ electric bills will rise.

Even the best-case scenario assumes China can and will maintain its current policy of notably improved environmental consciousness, and thereby meet its treaty obligations. But if China’s economy continues to slow, and the combined weight of skewed demography, social unrest and political dissent make investment in non-productive or capital inefficient environmental projects politically risky, there is little doubt the ruling communist party will simply jettison the deal. If confronted by a choice between meeting its paper obligations to the United States and maintaining the political status quo in China, is there any doubt which choice the leaders of the People’s Republic will make?

By committing the U.S. to what amounts to unilateral emissions cuts, the President gains leverage in his effort to end coal power. Already, national newspapers, political magazines and even Popular Mechanics have hailed the prospective deal as “historic” and the surely the United States would not balk at making good on such weighty promises. So now the President has political cover for onerous new regulation. It is hard to quibble with Republican Senator Mitch McConnell’s assessment that this is a shot in “the President’s ideological war on coal.”

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