Top polluter China in focus as UN climate talks begin in Madrid

As climate warnings become more severe, the focus is shifting from creating more green power toward stopping emissions, putting a harsher spotlight on China.

A sign warning local residents not to burn trash in order to reduce pollution stands in a field as emissions rise from cooling towers at a coal-fired power station in Tongling, Anhui province, China | Photographer: Qilai Shen | Bloomberg

Beijing/Singapore: All eyes are on China as negotiators from nearly 200 nations head to Madrid for the next round of United Nations climate talks. Like most efforts to reach an international consensus, what Beijing wants matters because of its rising geopolitical clout and economic might.

But when it comes to one of the core causes of climate change — carbon emissions from burning fossil fuels — there’s no bigger player than China. Though it’s the biggest investor in renewable power, it’s the world’s top carbon polluter and energy consumer. Balancing how it powers its massive economy against what’s asked of it by the rest of the planet is far from settled.

As a developing economy, China backs one of the main pillars of the UN-organized efforts: that richer nations have more responsibility for past climate-changing emissions than poorer countries, and so they should do more to finance efforts to change course. It also supports a multinational approach to avoiding climate change, criticizing the U.S. decision to pull out of the 2015 Paris Agreement and Europe’s recent consideration of a regional carbon tax.

There’s a specific and esoteric focus of the Madrid talks: How to implement Article 6 of the Paris Agreement, which addresses developing cooperative approaches and mechanisms to cut emissions and support sustainable development. One way to do this would be a global carbon market, where nations can build up credits from reducing emissions and then trade them.

China supports a market mechanism because it’s flexible and offers opportunities to seek lowest-cost options, said Ma Aimin, an adviser to the Chinese government on climate change policies. China could be a developer of credits if its costs are relatively lower or a buyer if costs are higher, he said.

China is already in the process of developing its own carbon market, which would be the world’s biggest. How that links to any global effort will depend on the final rules agreed internationally, said Ma, who’s also deputy director-general of the National Center for Climate Change Strategy & International Cooperation.

After a bureaucratic reshuffle last year saw China fall behind its own schedule to launch a national carbon market, the newly created Ministry of Ecology and Environment is back on track to launch trading for the power sector next year, Ma said. Registration and trading systems are almost complete and mock trading has started with potential participants, he said. Other industries will be drawn into the market after 2020, Ma added.

Meanwhile, world’s biggest renewable energy investor is trying to pull off a major policy shift. After years of bankrolling solar and wind projects, which added more capacity than any other nation, China is now weaning the industry off subsidies and promoting projects that can compete against coal- and natural gas-fired plants.

The transition has been rocky. The global solar industry is still reeling from China’s abrupt decision last year to cut subsidies and halt approvals of some new projects. Demand for solar panels and prices sank and haven’t quite recovered. The delay in releasing this year’s solar policy — a relaxed version of the 2018 approach — first sparked optimism of a demand boom in the top market, then predictions that it’s failing to happen, creating a lot of uncertainty for manufacturers worldwide.

The cool-down in China depressed global clean energy investment, according to data compiled by BloombergNEF. Countries collectively spent almost $189 billion in the first nine months this year, barely over half the amount for all 2018. Worldwide investments reached a six-year low in the first half, with China’s decline especially pronounced, BNEF said. The slowdown in China also pummeled both panel prices and the shares of large developers globally.

Next year could see a rebound in investment, according to Wang Bohua, secretary-general of China Photovoltaic Industry Association, who said Friday the nation is likely to announce its 2020 policies soon. This could help capacity additions recover next year to more than 40 gigawatts, he said, citing an industry forecast.

Rising Emissions

As climate warnings become more severe, global focus is shifting from creating more green power toward stopping emissions. That’s putting a harsher spotlight on China, despite its track record of renewables investments.

After contributing to a global slowdown earlier this decade, China’s emissions are on the rise again, the UN Environment Program said in a report last month, citing a 1.6% increase in 2018 to a record 13.7 billion tons of carbon dioxide.

And the outlook doesn’t seem promising. According to an analysis by Global Energy Monitor, China has enough coal-fired power plants in the pipeline to match the entire capacity of the European Union, driving an overall expansion globally in power from coal, the most-polluting fossil fuel.

As part of its Paris Agreement pledge, China aims by 2030 for emissions to peak and for carbon output per unit of economic output to drop by as much as 65% from 2005 levels. Beijing has touted it already hit a 2020 target for a 45% cut in emissions intensity from 2005. But with its GDP growing by 390% since then, overall carbon emissions have risen by more than half.

It’s expected that Zhao Yingmin, vice environmental minister, will lead China’s delegation to this round of climate talks. He’ll take over from Xie Zhenhua, who served as the top negotiator at UN climate meetings for more than a decade.

The change in negotiators follows a regulatory restructuring last year that saw responsibility for climate duties moved from National Development & Reform Commission to the new ecology & environment ministry. The ministry didn’t respond to requests for comment.

Zhao was appointed to his current position in March 2018, according to his official biography, which lists a series of government appointments since he started at the National Environmental Protection Agency in 1989.

“The positions and attitude won’t change dramatically because of a change in officials,” said Li Shuo, a policy adviser at Greenpeace China, who described Xie as “very authoritative and veteran official, who is highly respected internationally.”

Xie, who held the role as China’s special representative for climate change affairs even after his 2015 retirement from the NDRC, said last month that China has always sought a “multilateral system” on climate change negotiations and is willing to work with the U.S. to help reign in global warming.- Bloomberg