Although China’s energy transition is still gaining momentum as evidenced by sectoral peaking plans and intensified national and provincial ambition on rapid scaleup of renewable energy sources dependence on carbon-intensive fossil fuels is unfortunately expected to persist for the foreseeable future.
According to the researchers, China has a chance to dominate the market for renewable energy technologies if it starts to phase out coal right now. Otherwise, it might dangerously postpone the global breakthrough in renewable energy, according to Stephen Bi, Nico Bauer, and Jesscia Jewell’s article in Nature Climate Change.
To ensure that global warming stays far below 2 °C over pre-industrial levels, the Paris Agreement considers the global phase-out of coal by the middle of the century. In accordance with the Paris Agreement, 175 countries committed to sharing equal but distinct obligations in order to keep global warming to 1.5–2 °C over pre-industrial levels.
Political aspirations to hasten coal’s demise have grown since the founding of the Powering Past Coal Alliance (PPCA) at COP23, rising to the top of the agenda at COP26. The ability to determine if this bottom-up momentum may self-propagate towards Paris alignment is lacking in mitigation studies.
A new research demonstrates that current climate measures, including initiatives like the Powering Past Coal Alliance, will not result in a global coal departure. According to Bi, Bauer, and Jewell, nations that are transitioning away from coal in the electrical sector must extend their policy approach or else run the risk of importing too much coal for domestic steel manufacturing.
“It’s really a make-or-break moment,” says Stephen Bi from the Potsdam-Institute for Climate Impact Research (PIK) and Potsdam University, lead author of the study published in Nature Climate Change.
“Our computer simulation of climate economics and policy making indicates that current policies lead the world to less than a 5 per cent likelihood of phasing out coal by mid-century. This would leave minimal chances of reaching net-zero emissions by 2050 and limiting disastrous climate risks,” added Bi.
China formally submitted its carbon neutrality “before 2060” aim and updated NDC targets to the UNFCCC ahead of COP26 in November 2021. It strengthened its prior non-fossil share and carbon intensity targets and added a new renewable energy capacity target. While China’s revised NDC was an improvement over earlier goals, it still offers potential for more ambitious goal-raising.
“The most shocking result was that even though most countries decide to stop burning coal for electricity during the simulation, this has almost zero impact on total future coal use,” said Bi. “We then dug deeper into this perplexing result to identify what policymakers can do to actually achieve the coal exit,” added Bi.
Additionally, initiatives like carbon pricing and the phase-out of coal mining would be successful.
Scientists looked into the Powering Past Coal Alliance, which was introduced at the COP23 global climate summit in 2017. They wanted to know if these countries’ efforts to reduce coal use would make it easier or harder for other countries to follow suit.
As member nations try to upgrade their electricity industries, the coalition may expand, but it may also result in a global resurgence of coal use. The latter impact, often known as “leakage,” might occur as a result of market factors: if demand declines in some areas, prices will also fall, which may lead to an increase in demand elsewhere, according to Nature Climate Change.
Intriguingly, the leaking impact in this scenario may potentially occur within the Alliance itself rather than through global coal markets, according to the scientists’ computer simulation. The Powering Past Coal Alliance’s vow is only applicable to the electrical industry, despite expectations that it will expand.
According to Nature Climate Change, this means that countries who join the initiative may actually increase their use of coal in the manufacturing of steel, cement, and chemicals, significantly reducing the campaign’s potential.
“The greatest risk to the coal exit movement may actually come from free-riding sectors in coalition members. Unregulated industries can take advantage of falling coal prices at home and use more coal than they otherwise would have,” said co-author Nico Bauer from PIK.
The scientists come to the conclusion that more robust policies are required to prevent this consequence.
“The coal exit debate has to look beyond the power sector and also include the heavy industry. Carbon pricing would be the most efficient instrument to close loopholes in domestic regulations, while restrictions on coal mining and exports would go the furthest to deter free-riding abroad,” continued Bauer.
Meanwhile, Bi said that this is a “golden opportunity for China” – if it acts quickly. “China plays a special role since it produces and consumes more than half of all coal globally. The Chinese government must act swiftly to curtail the coal-driven Covid recovery,” said Bi.
China started toning down its outlook on coal in 2020–2021, which was highlighted by President Xi Jinping when he declared that China will carefully regulate coal consumption until 2025 and then begin to gradually phase it down. But by the end of 2021, China had evidently abandoned its plan to prioritise increasing the supply of coal (and other fossil fuels) in response to worries about energy security and scarcity.
China has also promised to stop funding the construction of coal power plants abroad, and 2021 will be the first year since 2000 in which its two global policy banks have not made any new energy finance pledges to foreign governments.
“The current coal plans jeopardize China’s recent promise to peak domestic emissions before 2030, and to achieve net-zero emissions by 2060. The computer simulation gives China roughly fifty-fifty odds of joining the Alliance, and it only falls on the right side of that line if it stops building coal plants by 2025,” added Bi.
Further, the simulation showed that the Alliance only manages to boost solar and wind energy expansion if China decides to phase-out coal. China would thus have “a golden opportunity to solidify its leading role in renewable energy market and unleash sustainable development opportunities worldwide, but this requires commitment to phasing out coal,” explained Bi.
“If not, then it becomes less clear how we’ll achieve sufficient diffusion of renewables worldwide. China’s actions today can position it to either lead or impede the global energy transition,” added Bi. The scientists employed a data-driven method called Dynamic Policy Evaluation for the first time to simulate actual policy making, making these conclusions sig
“Scientifically analyzing future emissions is subject to a large degree of uncertainties, not least policies. We were able to determine that coal-exit commitments often depend on certain domestic pre-conditions, which enabled us to remove some of the uncertainty on their emission impacts. Our new approach is thus the first to coherently simulate policy adoption in future scenarios which is also in line with historical evidence,” said co-author Jessica Jewell from Chalmers University of Technology.
“The G20 has initiated the phase-out of international public finance for coal projects. We are now assessing how much political momentum this can potentially impart on the Powering Past Coal Alliance,” said PIK Director Ottmar Edenhofer.
“Things are therefore looking somewhat more promising, but we must account for negative feedbacks alongside the positive for a balanced assessment of policy diffusion in our multipolar world. What remains clear is that governments must take a much more active approach to phasing out coal if they want to stay true to their climate promises,” added Edenhofer.nificantly more reliable than most earlier evaluations.
