China’s Climate Emissions Pledge

Is What they Would Have Done Anyway

On Nov 11, 2014, China and the US made a joint climate pledge for the Paris conference covering 2020 to 2030. Both pledges are non-binding. China’s pledge is substantial and will likely be kept. But it is identical to its energy strategy, announced one week later, which was aimed at local pollution and made no mention of climate or carbon. China’s “climate policy” is nothing more than their purely domestic energy policy, repackaged for diplomatic reasons.

In short, China will let coal use rise another 10%, but will then bring it to a halt in 2020 due to dire health consequences. Since China has little gas and oil, energy increases will shift to renewables, and this will stop growth in CO2 emissions by 2030. This energy policy is driven by local pollution and China makes no pretense that climate entered its calculations. Such weak outcomes were predicted by Jean Tirole (Nobel 2014) on the basis of game theory.

Oct 2, 2015. Christiana Figueres, Executive Secretary of the UNFCCC, has just stated that China INDC is simply a matter of self-interest in an interview on CBS News.

Dec 11, 2014. Summary: China’s pledge for the Paris agreement, like its pledge for the Copenhagen accord (documented here), is to do what it was planning to do anyway for domestic reasons. There is no indication of any climate ambition in this pledge or from Chinese officials. This matches Chinese public opinion (NPR report 4 minutes).

What this means: The Paris, pledge-and-review scheme failed its biggest test. China is just doing what it would have done anyway.

The evidence on this pages is not presented to condemn China, which is adopting the same strategy as many, if not most, other countries. The point is to show that the “bottom up” approach planned for Paris is having the effect predicted by game theory. In fact, Jean Tirole (Econ Nobel 2014) predicted in 2011 that “Countries’ strategic behavior will increase the cost of delay beyond that associated with the classic free-riding problem. He calls this the “waiting game.” Here’s how to solve that problem.

China has now made its pledge for the 2015 Paris agreement, and we are unlikely to see much change. So what did it pledge? (US version, Chinese version)

1. Annual coal consumption, held below 4.2 billion tonnes, will peak in 2020.
2. The peaking of CO2 emissions around 2030.
3. The share of non-fossil fuels increased to around 20% of energy consumption, by 2030.

Two questions matter most:

1. Does this pledge demonstrate any climate ambition at all?
   • Probably not.
2. Is this pledge aimed at the coming Paris Climate Conference
   • Yes. The pledge is an attempt to motivate others to be ambitious.

And what is the evidence for these answers?

The key to question #1 is the extreme pollution China suffers as a result of its coal use. Concern over smog vastly outweighs concern with the climate. China has decided to cap coal simply because of domestic pollution. A search Chinese statements to the press reveals no evidence that climate concerns had any influence in this decision.

(The Chinese do point out that their policy will be good for the climate, but they never claim that was a motivating factor. Only smog and acid rain are listed as motivations.)

Here is some evidence for their policy’s purely domestic character:

• Beijing smog reduces life expectancy there by 5 years.
• Oct 20 2013: Harbin, a city of 11 million,experienced a smog emergency that cut visibility to as little as 50m, shutting roads and the airport. Several other major cities were effected as well, and the smog did not start to lift for five days.
• By March 2014, China’s Coal Industry Planning Institute was predicting the 2020 peak in coal use that China pledged in the Nov 11, 2014 US-China joint announcement.
• July 24, 2014. The NY Times reported that the director general of the state Energy Research Institute in Beijing said China’s “actual consumption of coal is already very close to four billion tons, which is at the limits of endurance for the domestic environment.” (The pledged cap is 4.2 billion tons.)

So the coal cap is explained by “the limits of endurance for the domestic environment,” and not by climate concerns. 

Part 2 of the pledge states that CO₂ will peak around 2030.

• The same NYT article reported that Yang Fuqiang, a former energy researcher for the Chinese government said “If a coal cap can help us reach a peak in coal in 2020, we can be confident that the CO₂ peak will be about 2025.”

So part 2 is simply a side effect of capping coal due to domestic environmental concerns.

Part 3 is the pledge that non-fossil fuels will account for 20% of energy by 2030. With non-fossil already near 15% by 2020, this is mathematically necessary in order to cap coal use in 2020 while total energy continues to grow by 25% from 2020 to 2030. So the 20% non-fossil part of the pledge is necessary, because coal is capped for domestic environmental reasons.

Conclusion: China’s pledge for the Paris climate agreement is simply what it would do to correct its horrendous smog problem if there were no climate negotiations. There is no indication of any climate ambition.

Definition: Climate ambition is taking a stronger mitigation action than would make sense for reasons of pure self interest* when here is no commitment by others that they will reciprocate.

Question 2, is the pledge aimed at Paris: China’s Paris strategy is simply the rational strategy under the so-called “bottom up approach.” Since this does nothing to fix the free-rider problem, there is no reason for it to be ambitious. But of course, it still wants all others to be ambitious (as do all other countries). China’s strategy was made clear in an Reuters article (Nov 12, 2014):

So said, Li Junfeng, an influential Chinese climate policy adviser linked to China’s state planning agency, the National Development and Reform Commission [emphasis added].

* The IMF calculates that it would have been in China’s self interest (excluding all climate benefits) to impose a domestic carbon tax to $63/ton in 2010.