Transforming China onto a low carbon pathway

China emits more than one-quarter of global emissions and is one of the key drivers behind the growth in global emissions. However, there are large uncertainties in Chinese carbon dioxide emissions. As a part of a group of international researchers, in 2015 we reported in the journal Nature that Chinese emissions may have been overestimated by around 10 percent in key international datasets. We followed this up with a report in Nature Climate Change on the uncertainties in China's coal use and CO2 emissions, particularly after China's third economic census. The census led to an upwards adjustment of emissions of around 10 percent, offsetting the earlier overestimate. We have updated our analysis on an annual basis, with new Chinese data released 28 February, to obtain quick estimates of Chinese emissions for the previous year. These updates were usually published as blog posts, and will continue after the project based on the framework developed. Much of this work has been of high interest to international media, leading to articles in New York Times, Reuters, and similar. Around one-quarter of Chinese emissions are from the production of products that are exported, and ultimately consumed outside of China. In some years, this share has been as high as one-third, and in some years, up to one-half of the growth in Chinese emissions has been from the production of exports. Some have argued that the growth in Chinese exports has undermined the effectiveness of the Kyoto Protocol, as rich countries have been able to reduce their territorial emissions while China has increased its production and emissions. Chen Pan (Nanjing University) published a paper in Earth's Future (see blog post), showing that this stylised image of China has changed since the Global Financial Crisis in 2008. Since 2008, slower growth in exports and successful domestic energy and climate policies have combined to cause a plateau in China's exported emissions. China has a high, but now dwindling, share of exports related to processing trade (import of intermediate products that are lightly processed and reexported). Jiansuo Pei (University of International Business and Economics) incorporated processing trade into an economic model of China to better quantify their effect on emissions. Processing exports have lower emissions, but also less value to the Chinese economy. Both these studies by our Chinese partners show how changes in trade or economic conditions can have a significant impact on emissions. China is a diverse country, and greater understanding can be obtained by breaking China into smaller regions (generally around 30 provinces). The provinces trade with each other, and there is a growing literature on the role of these domestic value chains in China's energy and climate policy. Most of the wealth in China is in the Eastern cities, and over time, dirty production tends to drift to the central and western provinces while the coastal provinces have the latest technologies. In paper in review, Chen Pan, showed that this drift has slowed since the global financial crisis, in concert with the slower growth in exports, but has been replaced by emissions from construction and technology investments. Bo Meng and Jinjun Xue (Nagoya University) obtained similar findings over a shorter period. Hongyan Zhao (Tsinghua University) linked a model of the domestic value chains to an air-pollution model, to show that in many cases the trade and pollution flows amplify negative effects. Our studies on domestic value chains show that energy and climate policy can either enhance, or mitigate, the equity and effectiveness in regional development, details of which are important to policy development in China. Chinese emissions grew strongly in the 2000s, but China began to take climate concerns more seriously and pledged in 2015 to peak its emissions by 2030. In the last few years, China had an unexpected slowdown, and even decline, in coal consumption and emissions, and many have argued that China may have already peaked its emissions, more than 10 years earlier than planned. Our analysis, published in Nature Climate Change (under another project, CICEP, but also as blog posts), found that the recent slowdown in Chinese emissions was driven by slower than expected economic growth, a return to faster improvements in energy intensity, and growth in renewable energy (blog post). The declines in coal consumption were offset by continued strong growth in oil and gas consumption. Many of these changes were arguably well overdue as China was suffering from overcapacity after decades of high capital investments. However, the changes are likely of a more permanent nature, suggesting that Chinese emissions are likely to remain relatively flat for the next few years. Given China's growing demand for energy and large existing fossil-fuel infrastructure, it is unlikely that China will reduce emissions to any large extent before 2030.

As carbon emissions continue strong global growth, the most imminent climate challenge for society is a "long-term, large scale" transformation to a low carbon pathway consistent with keeping temperatures below 2°C. Chinese emissions represented 60% of th e growth in global emissions in the last ten years, and now China emits as much as the EU on a per-capita basis. Given that China plans continued strong economic growth, it is clear that China's future development pathway will be a pivotal determinant in whether global temperature rise can be kept below 2°C. The objective of this project is to investigate feasible pathways of a Chinese transformation to a low carbon pathway, but importantly, to use alternative methods to ensure robust and verifiable resul ts. The project is separated into four work packages, each addressing specific challenges. First, the accuracy of Chinese emissions statistics is widely debated, and this may bias emission projections. We use independent methods and proxies to verify th e trends in Chinese emissions and use this knowledge to reduce uncertainty in Chinese emission estimates. Second, China is an integral and growing part of the global value chain created by international trade. We analyse results from different datasets on how Chinese provinces and multinational firms are integrated into the global value chain, and the consequences this has on emissions. Third, just as the relationship between countries changes over time, so does the relationship between Chinese provinces. There is much debate on whether Chinese coastal provinces reduce emissions by outsourcing production to the central and western provinces keen for economic growth. We seek to settle that debate. And finally, incorporating information on drivers of Chines e national and provincial emissions, we develop independent projections of Chinese emissions leading to a peak and decline, to evaluate the potential Chinese mitigation challenge in the coming decade.