China’s NPC: is this the critical climate summit of 2020?

Few meetings are as important for the future of the planet as China’s National People’s Congress, which kicked off on Friday 21 May.

Delayed due to COVID-19, the gathering of 3000 senior lawmakers is where XI Jinping hopes to reset China’s economy and reboot a battered global image.

How the world’s largest emitter of carbon dioxide resets its economy matters for us all.

Like COVID-19, climate change respects no borders. How Xi decides to tackle crashing growth and rising unemployment will send ripples that will be with us for decades.

Here’s Ma Jun, former Chief Economist at the Research Bureau of People’s Bank of China:

“Sizable financial resources will be injected into infrastructure projects as well as to boost consumption in the efforts to recover the economy. These new infrastructure projects could determine China’s carbon emission and environment pathway for the next thirty or even fifty years.”

What rolls at the NPC next week will be with us in 2070 and beyond, if it contributes to yet more spikes in global warming emissions, which have briefly slowed due to global lockdown.

“It is no exaggeration to say the next few days will be critical for China, the world and global climate and environment agenda.”

That’s Li Shuo — senior policy advisor for Greenpeace East Asia and coordinator of Greenpeace’s engagement at global climate and biodiversity negotiations.

Early reports from the NPC on Friday offered some promise.

Delivering the Government Work Report, Premier Li Keqiang proposed to set no explicit GDP growth target for 2020, given the highly unpredictable global economic and market conditions due to the COVID-19 crisis.

Analysts say that’s good news for the environment, as it means officials will be less inclined to pump money into coal, steel and other heavy industry plants as a growth quick fix.

He Lifeng, Director of the National Development and Reform Commission — China’s key economic planning body — was quoted saying no GDP target would allow the government to be more focused on supply side reform and accelerating the transition to ‘high quality development’.

Li promised at least 6.35 trillion RMB (895 billion USD) to support China’s economic recovery in 2020. This will come from a range of sources including central government spending, government bonds and special purpose bonds.

So far so good. Still, early indications are that China has already started to open the taps for dirty industry, with smog returning across major industrial zones.

A report from UK-based consultants Vivid Economics rates China’s stimulus efforts so far as second-worst on the environment to the US, where Team Trump is bailing out oil, gas and coal barons.

“The increased speed of coal permit approval in China is a backward progression for the country which had previously banned new coal-fired power plants previous to 2018,” say Vivid.

“In February and March, China had loosened the labelling on the provinces which were previously considered over- capacity for coal production to available for sites, and had more permit approvals than in the same period in 2019.58

“From the post-2008 crisis, China funded much of the coal capacity they have today.”

A key point the report makes is that given China’s industrial base is already ‘brown’ — only a concerted push to green will make a difference.

Latest coal development figures from analysts at Global Energy Monitor bear out fears China is pouring good money after bad.

‘Last year the global coal fleet grew by 34.1 gigawatts (GW) in 2019, the first increase in net capacity additions since 2015. Nearly two-thirds (43.8 GW) of the 68.3 GW of newly commissioned capacity was in China,’ they say.

‘Outside China, the global coal fleet overall shrank for the second year in a row, as these other countries together retired more coal power capacity (27.2 GW) than was commissioned (24.5 GW).’

What makes this all the more perverse is China doesn’t need more coal plants, as a recent analysis in Carbon Brief underlined:

‘Coal-fired power capacity grew by around 40 gigawatts (GW) in 2019, a 4% increase, and a pick-up from the past two years (the red line on the figure, below). As a result, the coal fleet’s average utilisation rate fell further, to below 50%’

For Ma Jun, the answer needs to come from the top of government — ideally next week — and cascade down to regional and local leaders.

“When designing the stimulus plan, the share of green projects need to be significantly enhanced, particularly on infrastructure,” he says.

“Projects that are classified as sustainable and green, according to the Green Industry Guiding Catalogue issued by the National Development and Reform Commission in 2019, should make up at least 20% among all infrastructure projects.”

Low growth evidently exercises minds in Beijing for now, but the more money dropped into old industry, the harder it will be for China to meet its obligations under the Paris Agreement

To hit its goal of a 2030 emissions peak, clean energy needs to come online if there is increased demand.

Piling on coal undermines that ambition, undercuts Beijing’s ambition to be a global leader and dents chances of a strong EU-China climate pact this September in Leipzig.

Either way, Xi will have to reveal his hand in the coming days. What’s clear is the shockwaves will rebound beyond Beijing and for decades to come.

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