Assessing China’s New Climate Commitments

Q2: Are the targets achievable? Can China "do more"?

A2: Xi Jinping's announcement of the overall goal was not unexpected, but many were hoping for a more ambitious announcement than a 7-10 percent reduction by 2035. It is widely believed that China either will peak this year or has already peaked and therefore has room to begin to reduce before 2030 and to reach a higher goal than 7-10 percent fewer emissions by 2035. A more rapid reduction by 2035 would ensure that China can meet its 2060 goal more easily without exacerbating the world's fragile climate, given that it would help reduce near-term increases in atmospheric greenhouse gases.

The Chinese government is often characterized as wanting to announce goals that it is confident of achieving and preferring to under-announce and over-deliver. However, it has struggled with some goals, most notably the carbon intensity reduction targets announced in 2020, in part because of the economic disruption following the Covid-19 pandemic. Many advocates had hoped for more of a "stretch" goal that would encourage stretch goals from other developing countries, especially at a time when the United States has been stepping back from its climate commitments.

China's new targets for the deployment of solar and wind are consistent with China's already record-breaking installations over the past decade (see Figure 2). The biggest challenge to expanding new installations is grid integration and other adjustments, including the expansion of grid storage capacity, so that current and new solar and wind installations can be used more effectively. The creation of a unified national power trading market by the end of 2025 would facilitate the liberalization needed to ensure that more low-cost renewable energy is purchased throughout the country. Thus, if it can fulfill its solar and wind targets, China may be able to over-deliver on its announced carbon reduction goals.

Q3: What does this mean for China's domestic economic policy?

A3: Targets set by the top leadership serve as guiding posts for local governments, state-owned enterprises, and even private investors in China. Climate targets are treated as key economic targets that are studied closely and shape policies and economic decisions at all levels of government and in major state and private enterprises. The solar and wind targets, in particular, signal continued support for an industry whose importance has grown in recent years. The electric vehicle target is also important and achievable, since it reflects ongoing market trends.

This sign of support might be particularly important for the solar industry, which has been an object of the ongoing "anti-involution" campaign as officials are concerned by excessive competition, low prices, and profitability. In a way, the commitment is in line with broader efforts to expand China's domestic consumption, although this is unlikely to resolve existing issues in industrial production.

The emission reduction target could have different interpretations, including potential respite for coal-powered plants that might face closure under more ambitious goals. However, as renewables continue to expand and have become the low-priced source of power, there could also be less appetite for investment in what will increasingly be seen as potential stranded assets.

Q4: What does this mean for China's commitment to reach net zero by 2060? Might it be feasible for them to move up the date to 2050?

A4: The unwillingness to make a more ambitious announcement signals that China's leadership is unlikely to make any move to change its 2060 commitment. The announcement of targets of mixed ambition suggests that even within China's bureaucracy, there are conflicting views of what is achievable or desirable for the country's economy. Renewables have clearly won the day when it comes to having positive support, but actions that might entail economic pain are still not being explicitly announced.

Yet, climate is also clearly not going away from Xi Jinping's agenda. The continued use of the UN platform demonstrates that this is seen as an important area for China to engage in publicly and a source of potential soft power. Especially at a time when the United States has been taking an openly anti-renewables stance and is questioning other countries' energy strategies and climate commitments.

Q5: What does it mean for the rest of the world and the United States?

A5: There are at least three areas where these announcements have implications.

First, China still prefers to take a limited role in global climate governance. China continues to be unwilling to take the kinds of positions that would exert direct pressure on other developing countries to increase their ambition. At the same time, the Chinese government's use of the UN platform is intended as a strong show of support for the Paris agreement and the green energy transition, and a rebuke to the United States. Most countries will welcome the support for the international process, although some, especially in Europe, had hoped for more ambitious leadership by the world's largest emitter and second-largest economy.

Second, for the energy transition itself, this provides mixed messages. On the one hand, China's commitment to carbon emission reductions is still not in line with an increase in global temperatures of no more than 2 degrees Celsius, let alone 1.5 degrees Celsius, the preferred goal of the Paris Agreement. Even a 2 degrees Celsius increase in global temperatures could lead to dangerous disruptions to the climate, agriculture, and extreme weather incidents, but further temperature increases beyond that could be even more disastrous. On the other hand, China has reiterated its full commitment to transforming its energy system and, for the first time, has committed to reducing its emissions. In other words, Xi Jinping has signaled to China's bureaucracy and to the world that China is moving forward with the energy transition.

Third, China will continue to be the leading provider of cleantech globally. If there was any doubt of that, the new commitments to deploy record amounts of solar, wind, and electric vehicles effectively ensure that Chinese manufacturing will continue to benefit from record economies of scale. Similar dynamics will emerge in other technologies that China will need to deploy to achieve its targets, with implications for innovation and technological competition globally. The concentration of clean energy technology value chains and expertise in China creates challenges for other countries that are seeking to localize more value chains for economic security and development goals. In particular, the Chinese commitment looks likely to leave the U.S. auto industry and power sector far behind.

Ilaria Mazzocco is deputy director and senior fellow with the Trustee Chair in Chinese Business and Economics at the Center for Strategic and International Studies (CSIS) in Washington, D.C. Deborah Seligsohn is an Associate Professor of Political Science at Villanova University and a senior associate with the Trustee Chair in Chinese Business and Economics at CSIS.