China can achieve the twin goals of net-zero carbon emissions and becoming a rich developed economy, a new report by the Energy Transitions Commission has shown. Strong policy support, accelerated innovation and expanded investment can enable China to cut its final energy demand while trebling its GDP per capita.
22nd November 2019: The Energy Transitions Commission (ETC) today launched its report “China 2050: A Fully Developed Rich Zero-Carbon Economy,” in partnership with the Rocky Mountain Institute (RMI). The report shows that it is technically and economically feasible for China to simultaneously become a fully developed economy and reach net-zero carbon emissions by mid-century.
According to the report, to achieve this objective, the investment required can easily be afforded given China’s high savings and investment rate, and the impact on China’s gross domestic product (GDP) per capita in 2050 will be minimal. Committing to achieve zero emissions by 2050 will spur investment and innovation, and it will also deliver large improvements in local air quality and enable China to establish technological leadership across multiple industries.
“For the world to deliver the Paris Climate objectives, it is vital that China has a strategy to achieve net-zero emissions by mid-century,” says Adair Turner, Chair of the ETC. “Given China’s central role in the global economy, its vast renewable energy resources, and its technological leadership in key industries, China is uniquely positioned to lead the global energy transition and to decarbonize its economy completely by 2050. This report shows how it is technically and economically possible, and describes the actions which policy makers and companies need to take to seize the opportunity.”
“The report reflects six months of work and covers all sectors of the Chinese economy. It draws upon previous analyses from the ETC and broader literature review. It also integrates feedback from several rounds of consultation with representatives of Chinese companies, academia and institutions as well as global companies and institutions operating in China,” says Chen Ji, Principal of RMI, lead for the Chinese secretariat of ETC.
The report demonstrates how China can reduce final energy demand, while living standards continue to rise. Reduced demand for steel and cement, more circular use of all materials —especially plastics — and the inherent energy efficiency advantages achieved by the electrifying of surface transport and building heating will enable China to enjoy a GDP per capita and standard of living of three times the current levels while reducing final energy demand from 88 exajoules (EJ) today to 64 EJ in 2050. Within this projection, the industry sector would experience the most significant reduction (minus 30%) but would continue to account for 60% of final energy demand in 2050.
China’s total primary energy demand could fall by 45% from 132 EJ today to 73 EJ in 2050. This larger fall in primary energy demand than in final energy demand largely reflects the elimination of the energy losses involved in today’s thermal electricity production system. This would also see a dramatic change in the sources of energy, with fossil fuel demand falling over 90%, while non-fossil energy would expand by 3.4 times.
At the supply side, to achieve net-zero emissions will require the total decarbonization of electricity generation and the massive expansion of electricity use of around 15,000 terawatt-hours (TWh) in 2050, compared with only 7,000 TWh in 2018. Nearly 70% of total electricity generation could be from wind and solar resources with a portfolio of grid flexibility and storage options that help balance supply and demand.. It could also require a more than threefold increase in the production and use of hydrogen, from 25 million tonnes to over 80 million tons in 2050. There will also be important but more limited roles for increased bioenergy production and for carbon capture and either storage or use.
The report highlights key sectoral actions to achieve the zero-carbon target as follows:
The report also points out that clear targets and forceful public policies are required to achieve the zero-carbon target. Key policy levers to accelerate the transition should include:
“China has the institutional, financial and technological advantages of ‘concentrating resources to accomplish large undertakings,’ which makes it well placed to stimulate long-term and large-scale investment once setting up strategic goals. This helps lay a solid foundation for China to pursue zero-carbon objectives by 2050 and gain the economic and environmental advantages which would result,” says Jules Kortenhorst, CEO of RMI.
To read the full report, visit the ETC website at: http://www.energy-transitions.org/china-2050-fully-developed-rich-zero-carbon-economy