Sustainable Business

Explainer: What is China's "campaign-style" carbon reduction

3 minute read

Smoke stacks and cooling towers of a power plant rise above a low-rise neighborhood that borders a steel plant in Anyang, Henan province, China February 18, 2019. REUTERS/Thomas Peter

BEIJING, Aug 4 (Reuters) - China's top decision-making body last Friday said it would pursue its peak carbon and carbon neutrality plans in an "orderly" manner, and would correct any "campaign-style" carbon reduction by local governments.

The announcement fuelled concerns that the world's top polluter might backtrack on climate commitments, with analysts expecting China to cool some aggressive steps to curb carbon emissions from heavy industry as it tries to balance its climate goals with economic stability.

WHAT IS "CAMPAIGN-STYLE" CARBON REDUCTION?

The Politburo used the term "campaign-style" carbon reduction for the first time on Friday, echoing a statement made by the National Development and Reform Commission (NDRC) on July 21 that it would "avoid 'one-size-fits-all' measures and 'campaign-style' carbon reduction."

In response to Reuters' request to explain what "campaign-style" carbon reduction means, the NDRC said it would address the "complex" issue in more detail in due course.

Beijing, concerned about economic disruption, appears to be trying to rein in provincial authorities which have sought to clamp down on heavy emitters and back green projects while blocking energy-hungry developments.

State media Xinhua News Agency said in a Saturday editorial that some regions were chanting slogans without making any actual moves to reduce emissions, while others were overzealous in carrying out policies and were potentially jeopardising economic stability.

"This kind of campaign-style carbon reduction lacks overall planning ... and may even affect the normal development of the economy," Xinhua warned.

HOW IS CHINA CUTTING EMISSIONS?

Chinese President Xi Jinping last year announced that the country would bring its carbon emissions to a peak by 2030 and achieve carbon neutrality before 2060.

Many local governments, industrial associations and businesses followed with their own carbon vows, with or without detailed implementation plans. No overall scheme from Beijing has been published.

Some sectors, like the steel industry which accounts for around 15% of China's total carbon emissions, have ordered mills to curb production to curtail greenhouse gas emissions. Some regions have held back development of high energy-consuming industries, like coal, chemical and petrochemical manufacturing.

Steel product prices plunged more than 6% on Monday following the Politburo's announcement, while thermal coal, vital for power generation, dropped 5.8%, as investors bet that curbs on steel production and coal mining would be eased.

China's power industry, which overwhelmingly depends on coal, accounts for 40% of energy-related carbon emissions.

The country has tried to curtail coal mining and burning and slow construction of coal-fired power plants in recent years, and has promoted renewable power consumption by setting clean-energy targets for local grid firms.

NATIONAL GAME OF CHESS

The Politburo on Friday said it must play a "national game of chess" that balances the needs of the economy with Beijing's climate goals.

To some, such comments indicate "push-backs on the climate momentum generated by the carbon neutrality announcement," said Li Shuo, senior climate advisor for environment group Greenpeace.

The state-council backed Economic Daily on Sunday said in a commentary that China needs significant technology breakthroughs before renewables can replace coal as the dominant power source.

"It is not advisable to shut down coal-fired power units too quickly in the short term, otherwise it may affect energy security," it said.

A Chinese central bank official in February also warned of systemic financial risks from any rushed exit of high-carbon industries.

"Persist in a game of chess across the country, coordinate, orderly and scientifically 'reduce carbon', and we will win the tough battle of carbon peak and carbon neutrality," said Xinhua's editorial comment.

Reporting by Muyu Xu, Min Zhang and Shivani Singh; Additional reporting by Leng Cheng; Editing by Gavin Maguire and Sonali Paul

Our Standards: The Thomson Reuters Trust Principles.

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