China’s economy is undergoing profound and fundamental change as it pursues high-quality growth. It has an opportunity over the next 40 years to lead by example and demonstrate that it can generate high-quality economic growth while achieving carbon neutrality. If China peaks its emissions in 2030, it will mean that it will attempt to make the transition from peak to zero in just 30 years, a much shorter period than attempted by rich countries. On the other hand, if China accelerates the transition to high-quality economic development and growth, it could peak its emissions during the period of the 14th Five-Year Plan, and gain an additional five years at least to reduce its emissions towards carbon neutrality. 

The foundations for reaching carbon neutrality can be laid in the next five years by focusing on the transition away from fossil fuels, and coal in particular, for electricity generation. However, the speed with which China can move along a path towards carbon neutrality will also depend on how quickly a more widespread and deeper understanding can develop, including among economic policymakers, of how policies to tackle climate change can promote, rather than hinder, economic development and growth in China.

In the process of pursuing carbon neutrality, China can learn from the experience of other countries that are decarbonising their economies, and the rest of the world, particularly developing countries, can learn from China. In addition, the leadership and example set by China can promote a multilateral and cooperative international approach to climate change.

An increase in the understanding in China of how the transition zero-emissions and climate-resilient economy can drive high-quality growth could accelerate both the investments and returns across sectors. This would require a fundamental shift in how China measures its economic success to take account of advances in prosperity beyond an increase in GDP, recognising the value of natural, human, and social capital.

To quickly place itself on a path towards carbon neutrality, China will need to peak its annual emissions within the period of the 14th Five-Year Plan. This will need China to peak and reduce its consumption of coal, particularly for electricity generation, and to accelerate the electrification of its economy, including transport and industry. This acceleration will need to take place through decision-making at national, provincial and municipal level across China.

China’s domestic progress could be assisted by learning from the experience of other countries, with information and knowledge exchanged through bilateral engagements and international fora, including the G20 and the United Nations Framework Convention on Climate Change.

The goals of this project are:

  • assist China in the acceleration of the transition to a zero-emissions and climate-resilient economy;
  • help economists and other economic decision-makers in China to understand the opportunities for high-quality growth through the transition to a zero-emissions and climate-resilient economy;
  • help China to move forward the date of peaking of its annual emissions, ideally within the period of the 14th Five-Year Plan, and to embark on a pathway towards carbon neutrality by 2060; and
  • assist China in increasing international ambition and action on climate change, including net zero global emissions by mid-century.

This project is funded by the Energy Foundation China.

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