China's tough options on climate change

Pilot carbon trading has shown encouraging progress, and well-designed program will play crucial role

Representatives of more than 195 governments have been in Paris negotiating a new universal climate change agreement to keep the average rise in global temperatures below 2 C. It should come as no surprise that China, as the world's largest carbon emitter, has been under the spotlight in the run-up to this conference.

Indeed, in international climate change negotiations, China's role is an issue of perennial concern. In particular, the focus has been on the lack of quantitative, absolute emissions commitments.

In line with changing domestic and international contexts, China is recalibrating its stance and strategy. Its participation in international negotiations has evolved from a peripheral role to gradually taking center stage. This is reflected in its hard commitments to cap carbon emissions by 2030 under the joint China-US climate statement announced in Beijing late last year.

According to the statement, China aims to cap emissions around 2030, or earlier if possible, and increase the share of nonfossil fuels in its energy mix to about 20 percent by 2030.

These commitments were incorporated into China's pledge - intended nationally determined contribution - to the United Nations. In addition, China has vowed to reduce carbon emissions per unit of GDP by 60 to 65 percent by 2030 compared with 2005 levels.

These long-awaited commitments are ambitious, encourage other major parties to follow suit, and markedly increase the prospects of the Paris conference.

China is certainly doing its part to reach a legally binding agreement in the French capital. The country would be most hard hit if climate change continues unabated. Moreover, the past three decades of Chinese economic reforms have witnessed a shift in control over resources and decision-making to local governments. This devolution placed environmental stewardship in the hands of local officials and polluting enterprises more concerned with economic growth and profits than the environment.

The central government has had difficulty in getting effective cooperation from local governments in meeting energy-saving and pollution-cutting goals. From this perspective, having a legally binding international agreement allows Beijing to pressure local authorities and enterprises to meet energy and environmental goals in the name of fulfilling national commitments to the international agreement.

How China's carbon emissions are likely to develop, or at what level they will peak, is still an open question. This determines whether China's commitments are ambitious enough and could be among the contentious issues affecting the outcome of Paris and subsequent negotiations.

At the UN climate summit in Lima, parties were requested to submit national pledges well in advance of the Paris conference. This amounts to two significant shifts in international negotiations: from the original UN climate convention emphasis on developed country leadership to a fully global process, and from the Kyoto-style, quantity-based, legally binding "commitments" toward voluntary and broad "contributions" to defuse major points of contention, such as sovereignty issues.

More than 190 countries submitted pledges ahead of the Paris meeting, covering 95 percent of global greenhouse gas emissions, compared with only 15 percent covered by the Kyoto Protocol. These pledges, if fully implemented, put us on track for an average rise in the global temperature of 2.7 C, not as bad as the estimated 4 C or 5 C without these commitments. But they are not sufficient to hold the average rise to below the safe level of 2 C.

Limiting the temperature rise raises the issue of increasing ambitions over time. This is of paramount importance to any post-2020 deal.

There are two ways to increase China's ambition. One is to indicate a peak level of carbon dioxide emissions. Just as estimates of peak time differ, estimates of peak levels also differ significantly across studies. An optimistic estimate puts the peak level at less than 9 gigatons, assuming widespread adoption of more advanced low- or zero-carbon technologies without factoring in adoption costs and behavioral changes.

A joint study by Tsinghua University and Australian National University suggests China's carbon emissions will peak during the 2020s and return to below the 2020 level by 2030 and then to around current levels by 2040.

My educated estimate is that China's peak level in 2030 will not be lower than 10 gigatons. The country did not set a peak level in the pledges submitted to the UN.

Another way to show ambition would be to set emissions targets for 2025. The current level of ambition for China and the rest of the world under the 2030 timeframe is not consistent with limiting the global average temperature increase below 2 C. There is still a significant emissions gap in meeting this goal. If China sets stringent emissions targets for 2025, and parties in Paris agree on emissions targets for 2025, this would help avoid the risk of locking in insufficient actions and an inadequate emissions pathway for 15 years.

It has been proposed that a process be launched in Paris of regular, periodic updating of contributions - for example, every five years - with parties expected to progress in the level of ambition in each round in line with their national circumstances. If that can be agreed upon, then binding goals for 2030 could be set by 2020.

While the second option is even more stringent than the first, neither of them is easy for China. To what extent China is willing to go along will no doubt be based on a combination of Beijing's own assessment of its responsibility, economic and political benefits and climate change effects, while also taking into consideration mounting diplomatic and international pressure, and the give and take of international negotiations. Whether a consensus on these issues can be reached will determine the outcome of the Paris conference.

Regardless, China, for its own sake, will honor the commitments to the UN. China is working on its 13th Five-Year Plan (2016-20) and its carbon emissions target will likely be incorporated as a domestic commitment for the first time in Beijing's economic plan.

Meeting the 2020 domestic goal and the 2030 hard commitments will require significant economic restructuring and technology upgrading. Both are conducive to carbon mitigation, and mitigation provides a variety of ancillary benefits, such as reductions in conventional air pollutants and health risks, so this creates a new impetus for structural economic reforms to maximize synergy between climate change mitigation efforts and structural economic reforms.

This synergy could be further enhanced by capping nationwide coal consumption to let it peak during the 13th Five-Year Plan (2016-20), and for carbon emissions to peak between 2025 and 2030. To that end, China needs to put in place new policies and measures while strengthening and expanding existing flagship programs and supportive economic policies to genuinely shift to a low-carbon economy.

China's pilot carbon trading has shown encouraging progress, and a well-designed, well-implemented and well-operated national carbon program will play a crucial role in helping China meet its carbon control targets.

The author is a professor at Tianjin University's College of Management and Economics. He is a fellow with the Asia and the Pacific Policy Society in Australia, and the Chinese representative of the European Association of Environmental and Resource Economists. The views do not necessarily reflect those of China Daily.