December 24, 2025 • 36 mins
This episode was originally recorded in July 2025, and updated in December 2025. Happy Holidays from the Zero team.
When exactly China’s emissions peak will make a big difference to the fate of the planet. That moment has come, according to Lauri Myllyvirta, co-founder of the Centre for Research on Energy and Clean Air. A combination of factors – including a huge deployment of renewables and electrification of transport – has put China’s emissions into a structural decline. This week on Zero, Akshat Rathi asks Myllyvirta how confident he is that this really is a peak? What’s behind the decline in emissions? And how will the trade war with the US affect China’s climate and energy policies in the years to come?
Explore further:
- Lauri's latest analysis for Carbon Brief.
- Global Carbon Budget analysis.
- Analysis: Clean energy just put China’s CO2 emissions into reverse for first time - Carbon Brief
- China Set to Reach Peak Emissions Before 2030, Ex-Official Says - Bloomberg
- China’s Solar Industry Gathers as Gloom Deepens Over Demand — Bloomberg
Zero is a production of Bloomberg Green. Our producer is Oscar Boyd. Special thanks to: Jess Beck, Eleanor Harrison-Dengate, Sommer Saadi, Mohsis Andam and Siobhan Wagner. Thoughts or suggestions? Email us at zeropod@bloomberg.net. For more coverage of climate change and solutions, visit https://www.bloomberg.com/green.
See omnystudio.com/listener for privacy information.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
Hello Acua hi Asco.
Speaker 2 (00:04):
So we're about to take a short Christmas break on
zero and most of today's episode is going to be
a replay of one of our favorite episodes of the
past year. It's an interview with Larry mullerverta co founder
of the Center for Research on Energy and Clean Air,
and that interview is all about trying to answer the
question that everyone in the climate world really wants to
(00:25):
know the answer to which is have China's emissions finally peaked?
But before we dive into the main conversation with Larry,
a lot has been moving in this space, so we
thought we wanted to do a quick update on the topic.
So actually in the episode, Larry talks about China's emissions
flat nining or following a slight downward trend, but you
both acknowledge in the interview that there's some uncessainity there
(00:47):
about whether they are indeed plateaued or potentially falling. Almost
six months on from that episode being recorded, has the
trend continued.
Speaker 3 (00:56):
Peaks are very hard to go in advance after your
really only know maybe a couple of years after the
peak has happened, that indeed something peaked, but because China is,
you know, thirty percent of global emissions. You really want
to know whether China's emissions are peaking. And this is
why we get you know, Lowry and other researchers working
on this problem. In the last six months, We've learned
(01:18):
a couple of things. Louri himself came out with a study,
and he continues to think that China's emissions have peaked
or are on a slightly downward turn, primarily because of
its immense clean energy build out. It continues to install
record amounts of solar and wind and batteries and deploy
huge amounts of electric cars. All that is contributing towards
(01:41):
that trend, Lowry says. But a separate study from the
Global Carbon Project also found something similar. So they estimate
emissions from all countries and all economic sectors. Again, they
know their uncertainties involved, and we'll only really know the
real figures three years on. So they give an uncertainty
(02:02):
figure for China that emissions might have fallen by as
much as point nine percent, or may have risen by
two percent, and they land in the midpoint as an
increase of about zero point four percent is what they
think is likely. That is still a plantain compared to
China's emissions increased strength over the past four decades. So
(02:22):
both these studies are saying that we are going in
a direction that you know is generally good for the planet.
Speaker 2 (02:27):
So the other thing that's happened over the last six
months is COP thirty, which you were at in blem
in Brazil in November. And you know, what China does
on the world stage is also really important, and there
was a lot of expectation in the lead up to
COP thirty that China would perhaps fill in the void
that's been left by the US pulling out of the
Powers Agreement and start to take the lead on the
(02:50):
world stage kind of as a multilateral issue around climate.
It is, after all, the largest producer of green tech,
and it's in China's interest to see that adopted around
the world. So we see that happen. Did China become
the kind of big pressure of global climate treaties in
the COP thirty forum.
Speaker 3 (03:07):
Not so much, And I think there's a good reason
for that. So China has for the last many decades
of these diplomacy conversations kind of remained the reluctant candidate
because it knew it needed to increase emissions, and now
that it is the world's largest emitter, it also knows
that the harder targets it sets, the harder it will
(03:30):
have to go to meet them. Because China takes pride
in underpromising over delivering. And we thought maybe given how
much space President Donald Trump in the US providing China
to take on this climate leadership, that they would really
step in. But nope, not on the diplomacy stage. That
is not to say that they are not stepping up
(03:51):
on the technology space.
Speaker 2 (03:53):
Well, that's something I wanted to ask you about. You know,
we've had all these incredible stories coming out of China
over the past year, and you know a lot of
that looks set to continue in twenty twenty six. So
what trends do you think we might see continue, What
trends do you think we might see emerge from China
twenty twenty six, and what stories are you on the
hunt for next year when it comes to China and
(04:14):
its involvement in both the tech and climate politics space.
Speaker 3 (04:18):
So, China is not just the world's largest emitter, it
is the world's second largest economy, and almost anything it
does is now really closely observed. What we've seen over
the past few months is that China's investment figures are
declining in hard assets. You know, a lot of China's
growth was built on property development, on infrastructure development, and
(04:38):
that's starting to fall, which is a troubling sign for
an economy that is still high low middle income needs
to grow. And what we have seen is that China
has been replacing that kind of investment with more investments
in high tech industries, so yes, artificial intelligence for sure,
(04:59):
chips making, but also really its core advantages now in
green technologies, in solar, in wind, in batteries, in electric cars,
and we expect, given that the infrastructure spend is going down,
China will likely double down on its green technologies in
the next year. And here at Bloomergreen will be observing
(05:21):
how exactly because the US is now given China this
open space. You know, the US really doesn't want to
build very much of its own renewable energy, at least
at a government level, doesn't want to provide any incentives
for green industries to be born in the US. That
really just leaves China this open space to try and
(05:41):
not just deploy that domestically in China, but also all
around the world where people are hungry for it. There
is a rise in electricity demand in the West and
in developing countries, and the quickest way to meet it
is through green technologies. And we know that China will
definitely deploy green technologies in other parts of the world.
(06:01):
But how exactly is it going to do that and
will it take advantage of America's absence. That's what we're
going to be watching for in twenty twenty six.
Speaker 2 (06:09):
Well, thank you very much, a chat and a merry Christmas,
and a happy New Year to you.
Speaker 3 (06:13):
Happy Christmas to you too, and a happy new year.
And now here's my conversation with Loarry Millerwertha, recorded in
July twenty twenty five. We have linked to both the
studies that we talked about in the show notes, and
just to note that Lowry's analysis as of July is
still fully relevant to understanding how China got here. Hope
you find it insightful and we'll see you in the
(06:34):
new year. Lowry, welcome to the show.
Speaker 1 (06:45):
Thank you.
Speaker 3 (06:46):
Let's start with the big picture and situate the listener
on where China is. Obviously, it's a big manufacturing powerhouse.
For the last three decades, the submissions have been growing
really quickly. It is now a word second largest economy.
But what are its climate targets?
Speaker 1 (07:04):
So China's been pledging climate targets since the Copenhagen Climate Conference,
which was more than fifteen years ago now. So the
first quantitive targets that they pledged were for twenty twenty,
and then another set of targets was set for twenty thirty.
That's the current target year for China. The targets were
(07:27):
announced in twenty twenty one. The headline target that China
has been setting is carbon intensity so CO two emissions
from the energy sector per unit of GDP, which when
your GDP is growing fast, is of course a flattering
way of setting targets because even if your emissions are
(07:47):
going up let's say five percent in a given year,
if you clock ten percent GDP growth, then you can
say that you got a reduction in your carbon intensity.
So the target for twenty thirty is to reduce CO
two intensity by more than sixty five percent from the
two thousand and five levels, so over a period of
(08:08):
twenty five years. To make that a bit more tangible.
When the target was set in twenty twenty one, it
looked like it would allow pretty much businesses usual COO
two emissions growth of one to two percent per year
until twenty thirty. What happened though, is that during the
zero COVID period, China's economic strategy shifted towards emphasizing manufacturing
(08:34):
very heavily, which caused the spiking emissions. And now that
twenty thirty target is in fact very meaningful, if not
challenging one. So from the current level, emissions will have
to fall in absolute terms out to twenty thirty in
order to meet that target.
Speaker 3 (08:52):
And then it does have an absolute target too, which
is to try and peak carbon emissions by twenty thirty.
So if it does both things, then China may be
on track, but right now it is quite off track
now in terms of where things are. Specifically over the
past year, You've done an analysis looking at china CO
(09:14):
two emissions and they've been down by a significant percentage,
and that tends to only happen during times of financial crisis.
Is China in a financial crisis and is that why
the emissions are down? Just talk us through what have
you seen over the past year?
Speaker 1 (09:31):
For sure, So as I said, China's emissions went up
rapidly during the zero COVID years, so from twenty twenty
out to twenty twenty three. But at the same time,
China's clean energy industries boomed because of the emphasis of manufacturing,
because of government drive together kinds of projects and investment moving,
(09:52):
because of a shift of investment from real estate to
the clean energy industries, and so because of all of that,
clean energy additions have reached a level that no one
really expected. The past twelve months were the first time
that all of the growth in electricity demand was covered
(10:14):
by clean energy, while electricity demand grew above average rates.
So this is the first time that power sector emissions
and total emissions have gone down without the cause being
the global financial crisis, zero COVID, something else that would
lead to a drop or a slowdown in electricity demand.
(10:35):
There of course, economic headwinds in China related to the
trade war, related to the long tail of the economic
impacts from zero COVID, and so on. But the key
point is that over the past twelve months, electricity demand
growth was still above average, so whatever was happening in
some sectors of the economy didn't result in a slowdown
(10:57):
in edage demand or electricity demand.
Speaker 3 (11:00):
How much have emissions fallen by?
Speaker 1 (11:02):
Yeah, so transmissions over the past twelve months are down
by about one percent. So it's significant enough, especially compared
with the repid road of several percent per year in
the past few years, to mark change in the trend.
But it also means that if there is a surprise
like severe drought and heat wave over the summer, that
(11:23):
could still cause a spike that would cause emissions to
top the previous peak.
Speaker 3 (11:28):
How certain are we that this peak might be the
peak and we might not just see a rise next year.
Speaker 1 (11:35):
I think it's quite certain that the key trends driving
this structur rule reduction emissions will continue this year for
the next few years. There are two key uncertainties. The
first one is will the clean energy growth continue? So
trying to change the price is paid to a new
(11:56):
renewable power projects earlier this year. The changes kicking in
in the summer of this year, and so the industry
has been quite optimistic that they can keep the development going,
but it does create uncertainty. So that's one thing that
we need to be mindful of. The other one is
what happens with energy demand growth, and so the expectation
(12:21):
would be that if China's aim of weathering the current
trade tensions and so on by stimulating consumption is successful
and so on, then energy de mind growth would be
at or even below the historical trends. But of course,
if there is another decision, the resort to construction stimuls
for example, then we could see faster energy demand growth
(12:42):
and that could also upset the pig.
Speaker 3 (12:45):
Before we get into the details of how exactly China
came to this point, let's just talk about how reliable
these numbers are. You know, how do you know whether
we can trust China's carbon accounting is renewables figures, it's
coal deployment, and what are the big holes that are
still there in the data?
Speaker 1 (13:06):
Right? So I would really point to do things in
terms of how to think about china statistical data. So
one of them is that there are always uncertainties for
a big country with a complex, rapidly changing economy, and
simply in terms of the quality of the statistics, china
statistics are much better than many other emerging economies. The
other thing is intentional statistical manipulation, which does happen in China,
(13:32):
and it does happen in China more than just about
or let's say, most other countries, simply because China set
so many quantitative targets. So whenever there's a quantitative target
to do something, the statistical statistics tend to show that
it happened, whether or not it did. So the quality
of the statistics has been improving. This kind of statistical
(13:54):
manipulation has gotten harder to do and less blatant than
it used to be, but it's something that one always
has to be mindful of. So the way I evaluate
the robustness of different statistics is looking at okay, So
have these statistics shown trends that the government wouldn't want
to display? Electricity statistics are famed for doing that, so
(14:20):
they're one of the indicators that we know that China's
policy makers themselves have used when economic numbers have looked
too good to be true, and so they've shown slowdowns
when the government wouldn't like there to be a slowdown,
or they've shown rapid growth when the government wouldn't like
there to be rapid growth. That said, over the past
(14:41):
twelve months, there has been very little with any pressure
on China's provinces or enterprises to actually show that emissions
are going down. So there isn't much of a reason
to think that there would be that kind of distortions.
Speaker 3 (14:55):
Right now, let's look at what is causing the decline
and emissions. You talked about the large amount of solar
and wind power and battery capacity that China is installing.
How much venerables is it? In numbers?
Speaker 1 (15:10):
The numbers are pretty hard to get your head around.
So we're talking more than three hundred gigawatts of wind
and solar per year. The US has less than two
hundred gigawatts of solar installed in total, so China's additions
in one year exceeded that. And last year was a
record year for solar in the US as well, with
(15:30):
fifty k CO setteds so turned it almost five times.
In terms of power generation, the amount of solar and
wind added in twenty twenty four was enough to generate
the entire electricity consumption of the UK, and so most importantly,
we're talking about five percent of China's own electricity demand
added in clean power generation per year, which is the
(15:54):
average historical growth rate of electricity demand. So that crossover
where past editions start to actually cover electricity demand growth
is what makes a turnaround in emissions possible. And in
terms of evs, they're approaching fifty percent of all passenger
vehicles sold, also gaining share rapidly in heavier commercial vehicles,
(16:20):
where the next breakthrough is expected. The same is happening
now for electricity storage. So there's almost two hundred gigawats
of pumped hydro storage in operation and under construction, and
just last year about thirty gig awards of battery storage
was added in China. So to put things into scale,
(16:43):
China speak, demand is just over one thousand gig awards.
So when we start to talk about a few percent
of that in battery storage added per year, then that
starts to definitely make a dent in how much GUS
or coal fired power you need to cover those peak demands.
Speaker 3 (17:02):
So is this just a power sector story then that
emissions are falling because electricity consumption is getting cleaner with
all the solar and wind and energy storage that is
coming online.
Speaker 1 (17:16):
The other big thing that's happening in China besides clean
electricity generation is electrification, and that's happening. Of course, we
already talked about transportation, but it's also happening in industry.
It's also happening in buildings, so that means that for
quite a while already all of the growth in emissions
has been coming from the electricity sector because you get
(17:40):
growth energy demanding the other sectors, but they're shifting to electricity,
so the use of direct use of fossil fuels in
the other sectors has been falling. The third thing that
has been happening is a dramatic slowdown in the construction sector.
So construct especially real estate and construction and infrastructure, have
(18:03):
been a massive source of GDP growth and emissions growth
for China over the past couple of decades because those
are very energy and carbon intensive sectors, so all of
the cement and steel consumed by those sectors has been
a major driver of emissions. Cement production has come down
(18:25):
by more than twenty percent of its peak in twenty
twenty one, so that has been a major part of
this story in emissions starting to come down. Simply, the
process emissions from cement made up almost ten percent of
China's zero two emissions at its peak. And for the
steel sector, the trends are slightly more confusing because manufacturing
(18:48):
has started to use more steel. But steel consumption for
construction has come down dramatically, and overall steel consumption looks
like it's splittored or starting to come down, and there's
a huge but you need to shift to more steel recycling,
which would reduce the energy demand for steel making significantly,
even if total production stays flat.
Speaker 3 (19:10):
And so that is an interesting story because we typically
hear of the renewable story in China, of the electric
car story in China, but just put the steel sector
in context here and what this move towards recycling steel,
which is mostly driven by electricity, and this electricity is
becoming cleaner, could do too, not just peaking which might
(19:34):
have happened, but the decline that has to happen afterwards,
because China has to meet not just as twenty thirty goals,
but it has the goal to reach carbon neutrality by
twenty sixty, so it must start to decline pretty quickly.
Speaker 1 (19:47):
Right, So, first of all, the steel sector in China
is of course massive. China makes more than half of
the world's steel, and energy use for the steel making
is the largest source of emissions if you include the
electricity use. Even without the electricity use, it's almost a
fifth of China's emissions, and so the opportunity here is
(20:08):
that as long as China's steel demand was growing rapidly,
the only way to meet that demand was to produce
a lot of primary steel. Because if your demand is
going up five percent ten percent per year, then whatever
vehicles and buildings and so on that are coming to
the end of their life so built decades ago, are
(20:29):
a tiny fraction of your current demand. But once demand
plateaus and a lot more buildings and vehicles and so
on start to come to the end of their life,
the amount of scrap steel available for recycling or potentially
available for recycling starts to go up fast as a
percentage of your steel demand. That shift hasn't really happened
(20:53):
in China yet. The share of electric arc steel making,
so the kind of steel making that uses scrap as
the primary input, has stagnated and is in fact missing
the target for this year. And that's because it's too
cheap or or too cost competitive in China to make
steel out of iron ore and cocin coal. But that's
(21:15):
something that I expect to be fixed because, as I said,
the target for this year is being missed and it
clearly needs a further push.
Speaker 3 (21:24):
There's also just the electrification story of China, which has
been remarkable. So over this century, China has almost tripled
the share of energy that it consumes coming from electricity,
so from about ten percent to nearly thirty percent now.
And in that same period, Western economies have largely remained
(21:45):
flat at about eighteen to twenty percent of their energy
coming from electricity. With the trajectory that you have outlined
in terms of deployment of wind and solar, but also
some coal, and we should talk about that, and all
this electrification of transport even now industry that might happen
(22:07):
with steel. Are we starting to see China becoming an
electro state.
Speaker 1 (22:12):
I've been a bit skeptical of that broad categorization because
there are still at least pockets of industry where electrification
trend isn't clear. But electrification is certainly a big part
of the strategy for transportation for industry. So there was
a time that shifting from coal to gas fossil gas
(22:35):
was a big part of the strategy, especially for addressing
air pollution, but because of energy security concerns, the emphasis
on shifting to gas has declined, and also because of
economic considerations, and so I think electrification will become even
more clearly the focus.
Speaker 3 (22:54):
And so what makes you pause if all the numbers
are pointing towards trification and this is not just in
the transport sector but also in buildings and also in industry,
and the fact that even steel, which is a laguard,
might start to catch up. Why do you think the
electro state thesis is not yet one that is the
(23:18):
trajectory China is taking.
Speaker 1 (23:20):
I think that's the trajectory for everyone. It's quite obvious.
It's just that it's not clearly stated as a policy
end point. But certainly China has to been moving much
faster than just about everyone else.
Speaker 3 (23:44):
We'll be back with more of my conversation with Louriy
Mulwerta after this short break. And hey, if you're enjoying
this episode, please take a moment to rate and review
the show on Apple Podcasts and Spotify. Your feedback really
matters and helps new listeners discover the show. Thank you.
(24:07):
So far, we've looked at the good story, which is
renewables are helping power emissions decline and things electrifying so
that means emissions will decline in other sectors. But when
you look at the numbers, there are currently sectors where
emissions are growing. What are those.
Speaker 1 (24:25):
The main sector with a clear expectation that coal consumption
emissions will go up is the chemical sector. China has
this long standing program of building a coal to chemicals industry,
which is basically petrochemicals industry using coal as the feedstock
(24:45):
to produce synthetic couts, synthetic liquid fuels, and chemicals industry outputs.
And this is incredibly carbon intensive. It's even more much
more intensive than making the same stuff out of crude oil.
This is an area where a massive amount of capacity
is being built to process goal into chemicals. The utilization
(25:09):
of that capacity has remained quite low because it's struggling
with profitability. The posymakers are quite clear that this is
an energy security play or cityp White call planning for
extreme scenarios, so basically making sure that China has the
capacity to keep its economy working if maritime transportation of
(25:33):
oil and gas is blocked as part of a major
conflict with the US.
Speaker 3 (25:38):
Given the macroeconomic situation right now, which even before Trump
came to power, was the case where the Chinese economy
was slowing down, plus the Chinese population has started to decline.
Is there some contribution to the speaking of emissions that
is coming from these two facs.
Speaker 1 (26:01):
You can always talk about the counterfactual, which is if
we were still seeing seven percent ten percent GDP growth
like two decades ago, then of course even the current
massive clean energy additions would would fall way short of
covering demand. But overall, the slowdown of the economy is
(26:23):
something that has been expected for a long time. So
slowing down to maybe five percent GDP growth in the
first half of this decade and towards four percent in
the second half, China does have a target or seaging
pain maybe personally has a target of doubling GDP per
capiture from twenty twenty to twenty thirty five, which means
(26:47):
you have to maintain over four point five percent GDP
growth for the remainder of the period. That's very clearly
the red line for the policy makers, and that's why
they stuck with an around five percent GDP target for
this year as well.
Speaker 3 (27:03):
And what about China's population, given has been following by
about a million people each year for the past three years,
is that contributing to a decline in emissions.
Speaker 1 (27:13):
Where that definitely comes in is the real estate and
infrastructure sector. So if you had a lot of population
growth contributing to needing more real estate and more infrastructure
and so on, then of course that would be a
different situation.
Speaker 3 (27:28):
And then if you look at the trade war that
is ongoing right now, there is something that we can
learn from the past, where in the first Trump administration,
China responded to the tariffs that were deployed by the
US by increasing its manufacturing capacity to try and offset
(27:49):
the decline that it would have in exports to the
US by sending those exports to other countries. Do you
expect China to have a similar trajectory given this time
around the turps are even higher.
Speaker 1 (28:04):
A big part of the response during the first Trump
administration was, in fact domestic stiamulus to the construction sector,
very much unannounced and only really visible after the fact.
This time, what Chinese policy makers are saying is that
they want to stimulate consumption so household spending power, instead
(28:27):
of relying on these kind of stimulus, which has been
dubbed low quality by the sig administration. And this also
very much aligns with CI's overall economic guidelines of common prosperity,
aiming for a large middle class, and so on. So
(28:47):
there is a happy development here that could take place
where this in fact pushes long China's own ambitions for
changing the structure of the economy. If you're used to
the environmentalist messaging of consumption is the root of all evil,
it might sound a terrible idea to increase consumption, but
the point here for emissions is that household consumption is
(29:10):
in fact much less carbon intensive than the construction and
manufacturing industries which have been driving growth in the past.
So if more of the spending power in the economy
was directed to households, they would spend much more of
that on services like healthcare or a range of other services.
(29:31):
And even the manufacturing that caters to households is much
less energy intensive than the manufacturing that caters to the
construction sector, for example.
Speaker 3 (29:42):
And what about China's climate diplomacy Given the past decade,
we've seen the US flip every time there's been a
change in the president, but there have been moments where
US and China have cooperated. But now that the US
is firmly the Trumpet administration not going to be part
(30:03):
of climate diplomacy and maybe even play the role of spoiler.
How is China responding to this moment.
Speaker 1 (30:12):
I think two things have changed. If you think to
Obama's announcement in twenty fourteen, where the two leaders announced
their new climate targets together, so one of them is
the entire political dynamic in both countries. It's very hard
to see that there would be any kind of political
(30:34):
upside for seeing in the current atmosphere from announcing something
like this together with a US president, because that would
be just seen as caving and being weak. So China
has been very clear that their ambition is unchanging, is
not influenced by pressure from others. And the other thing
that has really changed is that clean energy industry, including exports,
(30:58):
has become such a key driver of China's economy that
China has a much stronger self interest now in also
keeping a global and transition going. So just in the
past few years, China has made a massive investment in
manufacturing capacity for solar, for batteries for evs and so on,
(31:19):
and if the global transition styled, that would mean that
quite a bit of that capacity would go unused and
cost financial distress. That said, this hasn't really translated into
multilateral diplomacy from China yet. So China, for example, didn't
put its weight behind the target of dripling renewables and
(31:43):
doubling efficiency. So this is where China still needs to
get more comfortable with taking the initiative and in fact
persuading other countries to do more. And I think here
things are really going to change. Once a China's leader
are secure in thinking that they've turned the ship on emissions,
(32:05):
they're going to be a lot more comfortable because they
don't have to be defensive about their emissions growth anymore.
Speaker 3 (32:12):
If this is the peak, how quickly will we see
a decline or will it be a slope plateau like
it has been for coal consumption over the past decade.
Speaker 1 (32:24):
There's certainly a risk of China getting stuck at pretty
much current levels of emissions in the absence of setting
ambitious emission reduction targets for twenty thirty five. I think
one key concern is that once the coal industry starts
to see their demand go down in absolute terms, especially
(32:47):
as they've been investing in new coal mines, new coal
fired power plants recently, that could generate a lot of pushback,
but at the same time, keeping emissions at a plateau
would mean upsetting the growth ambitions of the cleaner engine industry,
So there's going to be pushed from both sides. But
so the targets that China's going to set this year,
(33:11):
first in its new Paris Commitment and then in the
five year Plan that is due to be released next year,
will be key in calibrating that level of ambition.
Speaker 3 (33:21):
And finally, what do people in China think about the
US right now, which is the world's largest producer of
oil and gas, has a ton of fossil fuels still
available for it to burn, but it is not really
deploying electricity technologies which are more efficient and economically cheaper. Instead,
(33:42):
it is doubling down on fossil fuels, especially under this administration.
Do they see the US losing out on the future
of energy, even as it might be currently the global
energy superpower.
Speaker 1 (33:57):
I was, in fact in Beijing when the US election
results were coming in, and I can say that in
a room full of Chinese people, I was the only
one who was trying to check my phone under the
table for the results. So people weren't paying as much
attention as Americans might expect, and also when under the
(34:20):
Biden administration the US was starting to actually make an airport,
I think the reaction from Chinese experts was one of skepticism,
or at least one of wait and see, like see
whether the US can actually pull this off, because there
(34:41):
is a sense that the US is so far behind,
especially in terms of manufacturing, and it just doesn't have
the kind of ecosystem and the kind of uh, let's
get it done spirit that China has. So currently, I
think Chinese experts and Chinese policymakers are very comfortable and
secure in thinking that they have the lead in these
(35:04):
markets and technology areas, and it would actually be really
good to get some more competition. So if there was
more of a sense that others are at least making
an effort to catch up and put up some competition,
that would keep China moving faster.
Speaker 3 (35:21):
Thank you, Laurie, thank you so much, and thank you
for listening to zero. Now for the sound of the week.
(35:44):
That was the sound of a bucket reel excavator used
for open pit coal mining, and it's essentially a shovel
as big as a skyscraper. If you liked this episode,
please take a moment to rate and review the show
on Apple Podcasts or Spotify. Share this episode with a
friend or with a China skeptic. This episode was produced
(36:05):
by Oscar Boyd. Noomberg's head of podcast is Saige Bauman
and head of Talk is Brendan newnham Our. Theme music
is composed by Wonderly Special Thanks to Jessica Beck eleanor
Harrison Dengate, Soamersadi, Moses Andam and Sherwan wagner I am
Akshatrati Back soon.
Hello Acua hi Asco.
Speaker 2 (00:04):
So we're about to take a short Christmas break on
zero and most of today's episode is going to be
a replay of one of our favorite episodes of the
past year. It's an interview with Larry mullerverta co founder
of the Center for Research on Energy and Clean Air,
and that interview is all about trying to answer the
question that everyone in the climate world really wants to
(00:25):
know the answer to which is have China's emissions finally peaked?
But before we dive into the main conversation with Larry,
a lot has been moving in this space, so we
thought we wanted to do a quick update on the topic.
So actually in the episode, Larry talks about China's emissions
flat nining or following a slight downward trend, but you
both acknowledge in the interview that there's some uncessainity there
(00:47):
about whether they are indeed plateaued or potentially falling. Almost
six months on from that episode being recorded, has the
trend continued.
Speaker 3 (00:56):
Peaks are very hard to go in advance after your
really only know maybe a couple of years after the
peak has happened, that indeed something peaked, but because China is,
you know, thirty percent of global emissions. You really want
to know whether China's emissions are peaking. And this is
why we get you know, Lowry and other researchers working
on this problem. In the last six months, We've learned
(01:18):
a couple of things. Louri himself came out with a study,
and he continues to think that China's emissions have peaked
or are on a slightly downward turn, primarily because of
its immense clean energy build out. It continues to install
record amounts of solar and wind and batteries and deploy
huge amounts of electric cars. All that is contributing towards
(01:41):
that trend, Lowry says. But a separate study from the
Global Carbon Project also found something similar. So they estimate
emissions from all countries and all economic sectors. Again, they
know their uncertainties involved, and we'll only really know the
real figures three years on. So they give an uncertainty
(02:02):
figure for China that emissions might have fallen by as
much as point nine percent, or may have risen by
two percent, and they land in the midpoint as an
increase of about zero point four percent is what they
think is likely. That is still a plantain compared to
China's emissions increased strength over the past four decades. So
(02:22):
both these studies are saying that we are going in
a direction that you know is generally good for the planet.
Speaker 2 (02:27):
So the other thing that's happened over the last six
months is COP thirty, which you were at in blem
in Brazil in November. And you know, what China does
on the world stage is also really important, and there
was a lot of expectation in the lead up to
COP thirty that China would perhaps fill in the void
that's been left by the US pulling out of the
Powers Agreement and start to take the lead on the
(02:50):
world stage kind of as a multilateral issue around climate.
It is, after all, the largest producer of green tech,
and it's in China's interest to see that adopted around
the world. So we see that happen. Did China become
the kind of big pressure of global climate treaties in
the COP thirty forum.
Speaker 3 (03:07):
Not so much, And I think there's a good reason
for that. So China has for the last many decades
of these diplomacy conversations kind of remained the reluctant candidate
because it knew it needed to increase emissions, and now
that it is the world's largest emitter, it also knows
that the harder targets it sets, the harder it will
(03:30):
have to go to meet them. Because China takes pride
in underpromising over delivering. And we thought maybe given how
much space President Donald Trump in the US providing China
to take on this climate leadership, that they would really
step in. But nope, not on the diplomacy stage. That
is not to say that they are not stepping up
(03:51):
on the technology space.
Speaker 2 (03:53):
Well, that's something I wanted to ask you about. You know,
we've had all these incredible stories coming out of China
over the past year, and you know a lot of
that looks set to continue in twenty twenty six. So
what trends do you think we might see continue, What
trends do you think we might see emerge from China
twenty twenty six, and what stories are you on the
hunt for next year when it comes to China and
(04:14):
its involvement in both the tech and climate politics space.
Speaker 3 (04:18):
So, China is not just the world's largest emitter, it
is the world's second largest economy, and almost anything it
does is now really closely observed. What we've seen over
the past few months is that China's investment figures are
declining in hard assets. You know, a lot of China's
growth was built on property development, on infrastructure development, and
(04:38):
that's starting to fall, which is a troubling sign for
an economy that is still high low middle income needs
to grow. And what we have seen is that China
has been replacing that kind of investment with more investments
in high tech industries, so yes, artificial intelligence for sure,
(04:59):
chips making, but also really its core advantages now in
green technologies, in solar, in wind, in batteries, in electric cars,
and we expect, given that the infrastructure spend is going down,
China will likely double down on its green technologies in
the next year. And here at Bloomergreen will be observing
(05:21):
how exactly because the US is now given China this
open space. You know, the US really doesn't want to
build very much of its own renewable energy, at least
at a government level, doesn't want to provide any incentives
for green industries to be born in the US. That
really just leaves China this open space to try and
(05:41):
not just deploy that domestically in China, but also all
around the world where people are hungry for it. There
is a rise in electricity demand in the West and
in developing countries, and the quickest way to meet it
is through green technologies. And we know that China will
definitely deploy green technologies in other parts of the world.
(06:01):
But how exactly is it going to do that and
will it take advantage of America's absence. That's what we're
going to be watching for in twenty twenty six.
Speaker 2 (06:09):
Well, thank you very much, a chat and a merry Christmas,
and a happy New Year to you.
Speaker 3 (06:13):
Happy Christmas to you too, and a happy new year.
And now here's my conversation with Loarry Millerwertha, recorded in
July twenty twenty five. We have linked to both the
studies that we talked about in the show notes, and
just to note that Lowry's analysis as of July is
still fully relevant to understanding how China got here. Hope
you find it insightful and we'll see you in the
(06:34):
new year. Lowry, welcome to the show.
Speaker 1 (06:45):
Thank you.
Speaker 3 (06:46):
Let's start with the big picture and situate the listener
on where China is. Obviously, it's a big manufacturing powerhouse.
For the last three decades, the submissions have been growing
really quickly. It is now a word second largest economy.
But what are its climate targets?
Speaker 1 (07:04):
So China's been pledging climate targets since the Copenhagen Climate Conference,
which was more than fifteen years ago now. So the
first quantitive targets that they pledged were for twenty twenty,
and then another set of targets was set for twenty thirty.
That's the current target year for China. The targets were
(07:27):
announced in twenty twenty one. The headline target that China
has been setting is carbon intensity so CO two emissions
from the energy sector per unit of GDP, which when
your GDP is growing fast, is of course a flattering
way of setting targets because even if your emissions are
(07:47):
going up let's say five percent in a given year,
if you clock ten percent GDP growth, then you can
say that you got a reduction in your carbon intensity.
So the target for twenty thirty is to reduce CO
two intensity by more than sixty five percent from the
two thousand and five levels, so over a period of
(08:08):
twenty five years. To make that a bit more tangible.
When the target was set in twenty twenty one, it
looked like it would allow pretty much businesses usual COO
two emissions growth of one to two percent per year
until twenty thirty. What happened though, is that during the
zero COVID period, China's economic strategy shifted towards emphasizing manufacturing
(08:34):
very heavily, which caused the spiking emissions. And now that
twenty thirty target is in fact very meaningful, if not
challenging one. So from the current level, emissions will have
to fall in absolute terms out to twenty thirty in
order to meet that target.
Speaker 3 (08:52):
And then it does have an absolute target too, which
is to try and peak carbon emissions by twenty thirty.
So if it does both things, then China may be
on track, but right now it is quite off track
now in terms of where things are. Specifically over the
past year, You've done an analysis looking at china CO
(09:14):
two emissions and they've been down by a significant percentage,
and that tends to only happen during times of financial crisis.
Is China in a financial crisis and is that why
the emissions are down? Just talk us through what have
you seen over the past year?
Speaker 1 (09:31):
For sure, So as I said, China's emissions went up
rapidly during the zero COVID years, so from twenty twenty
out to twenty twenty three. But at the same time,
China's clean energy industries boomed because of the emphasis of manufacturing,
because of government drive together kinds of projects and investment moving,
(09:52):
because of a shift of investment from real estate to
the clean energy industries, and so because of all of that,
clean energy additions have reached a level that no one
really expected. The past twelve months were the first time
that all of the growth in electricity demand was covered
(10:14):
by clean energy, while electricity demand grew above average rates.
So this is the first time that power sector emissions
and total emissions have gone down without the cause being
the global financial crisis, zero COVID, something else that would
lead to a drop or a slowdown in electricity demand.
(10:35):
There of course, economic headwinds in China related to the
trade war, related to the long tail of the economic
impacts from zero COVID, and so on. But the key
point is that over the past twelve months, electricity demand
growth was still above average, so whatever was happening in
some sectors of the economy didn't result in a slowdown
(10:57):
in edage demand or electricity demand.
Speaker 3 (11:00):
How much have emissions fallen by?
Speaker 1 (11:02):
Yeah, so transmissions over the past twelve months are down
by about one percent. So it's significant enough, especially compared
with the repid road of several percent per year in
the past few years, to mark change in the trend.
But it also means that if there is a surprise
like severe drought and heat wave over the summer, that
(11:23):
could still cause a spike that would cause emissions to
top the previous peak.
Speaker 3 (11:28):
How certain are we that this peak might be the
peak and we might not just see a rise next year.
Speaker 1 (11:35):
I think it's quite certain that the key trends driving
this structur rule reduction emissions will continue this year for
the next few years. There are two key uncertainties. The
first one is will the clean energy growth continue? So
trying to change the price is paid to a new
(11:56):
renewable power projects earlier this year. The changes kicking in
in the summer of this year, and so the industry
has been quite optimistic that they can keep the development going,
but it does create uncertainty. So that's one thing that
we need to be mindful of. The other one is
what happens with energy demand growth, and so the expectation
(12:21):
would be that if China's aim of weathering the current
trade tensions and so on by stimulating consumption is successful
and so on, then energy de mind growth would be
at or even below the historical trends. But of course,
if there is another decision, the resort to construction stimuls
for example, then we could see faster energy demand growth
(12:42):
and that could also upset the pig.
Speaker 3 (12:45):
Before we get into the details of how exactly China
came to this point, let's just talk about how reliable
these numbers are. You know, how do you know whether
we can trust China's carbon accounting is renewables figures, it's
coal deployment, and what are the big holes that are
still there in the data?
Speaker 1 (13:06):
Right? So I would really point to do things in
terms of how to think about china statistical data. So
one of them is that there are always uncertainties for
a big country with a complex, rapidly changing economy, and
simply in terms of the quality of the statistics, china
statistics are much better than many other emerging economies. The
other thing is intentional statistical manipulation, which does happen in China,
(13:32):
and it does happen in China more than just about
or let's say, most other countries, simply because China set
so many quantitative targets. So whenever there's a quantitative target
to do something, the statistical statistics tend to show that
it happened, whether or not it did. So the quality
of the statistics has been improving. This kind of statistical
(13:54):
manipulation has gotten harder to do and less blatant than
it used to be, but it's something that one always
has to be mindful of. So the way I evaluate
the robustness of different statistics is looking at okay, So
have these statistics shown trends that the government wouldn't want
to display? Electricity statistics are famed for doing that, so
(14:20):
they're one of the indicators that we know that China's
policy makers themselves have used when economic numbers have looked
too good to be true, and so they've shown slowdowns
when the government wouldn't like there to be a slowdown,
or they've shown rapid growth when the government wouldn't like
there to be rapid growth. That said, over the past
(14:41):
twelve months, there has been very little with any pressure
on China's provinces or enterprises to actually show that emissions
are going down. So there isn't much of a reason
to think that there would be that kind of distortions.
Speaker 3 (14:55):
Right now, let's look at what is causing the decline
and emissions. You talked about the large amount of solar
and wind power and battery capacity that China is installing.
How much venerables is it? In numbers?
Speaker 1 (15:10):
The numbers are pretty hard to get your head around.
So we're talking more than three hundred gigawatts of wind
and solar per year. The US has less than two
hundred gigawatts of solar installed in total, so China's additions
in one year exceeded that. And last year was a
record year for solar in the US as well, with
(15:30):
fifty k CO setteds so turned it almost five times.
In terms of power generation, the amount of solar and
wind added in twenty twenty four was enough to generate
the entire electricity consumption of the UK, and so most importantly,
we're talking about five percent of China's own electricity demand
added in clean power generation per year, which is the
(15:54):
average historical growth rate of electricity demand. So that crossover
where past editions start to actually cover electricity demand growth
is what makes a turnaround in emissions possible. And in
terms of evs, they're approaching fifty percent of all passenger
vehicles sold, also gaining share rapidly in heavier commercial vehicles,
(16:20):
where the next breakthrough is expected. The same is happening
now for electricity storage. So there's almost two hundred gigawats
of pumped hydro storage in operation and under construction, and
just last year about thirty gig awards of battery storage
was added in China. So to put things into scale,
(16:43):
China speak, demand is just over one thousand gig awards.
So when we start to talk about a few percent
of that in battery storage added per year, then that
starts to definitely make a dent in how much GUS
or coal fired power you need to cover those peak demands.
Speaker 3 (17:02):
So is this just a power sector story then that
emissions are falling because electricity consumption is getting cleaner with
all the solar and wind and energy storage that is
coming online.
Speaker 1 (17:16):
The other big thing that's happening in China besides clean
electricity generation is electrification, and that's happening. Of course, we
already talked about transportation, but it's also happening in industry.
It's also happening in buildings, so that means that for
quite a while already all of the growth in emissions
has been coming from the electricity sector because you get
(17:40):
growth energy demanding the other sectors, but they're shifting to electricity,
so the use of direct use of fossil fuels in
the other sectors has been falling. The third thing that
has been happening is a dramatic slowdown in the construction sector.
So construct especially real estate and construction and infrastructure, have
(18:03):
been a massive source of GDP growth and emissions growth
for China over the past couple of decades because those
are very energy and carbon intensive sectors, so all of
the cement and steel consumed by those sectors has been
a major driver of emissions. Cement production has come down
(18:25):
by more than twenty percent of its peak in twenty
twenty one, so that has been a major part of
this story in emissions starting to come down. Simply, the
process emissions from cement made up almost ten percent of
China's zero two emissions at its peak. And for the
steel sector, the trends are slightly more confusing because manufacturing
(18:48):
has started to use more steel. But steel consumption for
construction has come down dramatically, and overall steel consumption looks
like it's splittored or starting to come down, and there's
a huge but you need to shift to more steel recycling,
which would reduce the energy demand for steel making significantly,
even if total production stays flat.
Speaker 3 (19:10):
And so that is an interesting story because we typically
hear of the renewable story in China, of the electric
car story in China, but just put the steel sector
in context here and what this move towards recycling steel,
which is mostly driven by electricity, and this electricity is
becoming cleaner, could do too, not just peaking which might
(19:34):
have happened, but the decline that has to happen afterwards,
because China has to meet not just as twenty thirty goals,
but it has the goal to reach carbon neutrality by
twenty sixty, so it must start to decline pretty quickly.
Speaker 1 (19:47):
Right, So, first of all, the steel sector in China
is of course massive. China makes more than half of
the world's steel, and energy use for the steel making
is the largest source of emissions if you include the
electricity use. Even without the electricity use, it's almost a
fifth of China's emissions, and so the opportunity here is
(20:08):
that as long as China's steel demand was growing rapidly,
the only way to meet that demand was to produce
a lot of primary steel. Because if your demand is
going up five percent ten percent per year, then whatever
vehicles and buildings and so on that are coming to
the end of their life so built decades ago, are
(20:29):
a tiny fraction of your current demand. But once demand
plateaus and a lot more buildings and vehicles and so
on start to come to the end of their life,
the amount of scrap steel available for recycling or potentially
available for recycling starts to go up fast as a
percentage of your steel demand. That shift hasn't really happened
(20:53):
in China yet. The share of electric arc steel making,
so the kind of steel making that uses scrap as
the primary input, has stagnated and is in fact missing
the target for this year. And that's because it's too
cheap or or too cost competitive in China to make
steel out of iron ore and cocin coal. But that's
(21:15):
something that I expect to be fixed because, as I said,
the target for this year is being missed and it
clearly needs a further push.
Speaker 3 (21:24):
There's also just the electrification story of China, which has
been remarkable. So over this century, China has almost tripled
the share of energy that it consumes coming from electricity,
so from about ten percent to nearly thirty percent now.
And in that same period, Western economies have largely remained
(21:45):
flat at about eighteen to twenty percent of their energy
coming from electricity. With the trajectory that you have outlined
in terms of deployment of wind and solar, but also
some coal, and we should talk about that, and all
this electrification of transport even now industry that might happen
(22:07):
with steel. Are we starting to see China becoming an
electro state.
Speaker 1 (22:12):
I've been a bit skeptical of that broad categorization because
there are still at least pockets of industry where electrification
trend isn't clear. But electrification is certainly a big part
of the strategy for transportation for industry. So there was
a time that shifting from coal to gas fossil gas
(22:35):
was a big part of the strategy, especially for addressing
air pollution, but because of energy security concerns, the emphasis
on shifting to gas has declined, and also because of
economic considerations, and so I think electrification will become even
more clearly the focus.
Speaker 3 (22:54):
And so what makes you pause if all the numbers
are pointing towards trification and this is not just in
the transport sector but also in buildings and also in industry,
and the fact that even steel, which is a laguard,
might start to catch up. Why do you think the
electro state thesis is not yet one that is the
(23:18):
trajectory China is taking.
Speaker 1 (23:20):
I think that's the trajectory for everyone. It's quite obvious.
It's just that it's not clearly stated as a policy
end point. But certainly China has to been moving much
faster than just about everyone else.
Speaker 3 (23:44):
We'll be back with more of my conversation with Louriy
Mulwerta after this short break. And hey, if you're enjoying
this episode, please take a moment to rate and review
the show on Apple Podcasts and Spotify. Your feedback really
matters and helps new listeners discover the show. Thank you.
(24:07):
So far, we've looked at the good story, which is
renewables are helping power emissions decline and things electrifying so
that means emissions will decline in other sectors. But when
you look at the numbers, there are currently sectors where
emissions are growing. What are those.
Speaker 1 (24:25):
The main sector with a clear expectation that coal consumption
emissions will go up is the chemical sector. China has
this long standing program of building a coal to chemicals industry,
which is basically petrochemicals industry using coal as the feedstock
(24:45):
to produce synthetic couts, synthetic liquid fuels, and chemicals industry outputs.
And this is incredibly carbon intensive. It's even more much
more intensive than making the same stuff out of crude oil.
This is an area where a massive amount of capacity
is being built to process goal into chemicals. The utilization
(25:09):
of that capacity has remained quite low because it's struggling
with profitability. The posymakers are quite clear that this is
an energy security play or cityp White call planning for
extreme scenarios, so basically making sure that China has the
capacity to keep its economy working if maritime transportation of
(25:33):
oil and gas is blocked as part of a major
conflict with the US.
Speaker 3 (25:38):
Given the macroeconomic situation right now, which even before Trump
came to power, was the case where the Chinese economy
was slowing down, plus the Chinese population has started to decline.
Is there some contribution to the speaking of emissions that
is coming from these two facs.
Speaker 1 (26:01):
You can always talk about the counterfactual, which is if
we were still seeing seven percent ten percent GDP growth
like two decades ago, then of course even the current
massive clean energy additions would would fall way short of
covering demand. But overall, the slowdown of the economy is
(26:23):
something that has been expected for a long time. So
slowing down to maybe five percent GDP growth in the
first half of this decade and towards four percent in
the second half, China does have a target or seaging
pain maybe personally has a target of doubling GDP per
capiture from twenty twenty to twenty thirty five, which means
(26:47):
you have to maintain over four point five percent GDP
growth for the remainder of the period. That's very clearly
the red line for the policy makers, and that's why
they stuck with an around five percent GDP target for
this year as well.
Speaker 3 (27:03):
And what about China's population, given has been following by
about a million people each year for the past three years,
is that contributing to a decline in emissions.
Speaker 1 (27:13):
Where that definitely comes in is the real estate and
infrastructure sector. So if you had a lot of population
growth contributing to needing more real estate and more infrastructure
and so on, then of course that would be a
different situation.
Speaker 3 (27:28):
And then if you look at the trade war that
is ongoing right now, there is something that we can
learn from the past, where in the first Trump administration,
China responded to the tariffs that were deployed by the
US by increasing its manufacturing capacity to try and offset
(27:49):
the decline that it would have in exports to the
US by sending those exports to other countries. Do you
expect China to have a similar trajectory given this time
around the turps are even higher.
Speaker 1 (28:04):
A big part of the response during the first Trump
administration was, in fact domestic stiamulus to the construction sector,
very much unannounced and only really visible after the fact.
This time, what Chinese policy makers are saying is that
they want to stimulate consumption so household spending power, instead
(28:27):
of relying on these kind of stimulus, which has been
dubbed low quality by the sig administration. And this also
very much aligns with CI's overall economic guidelines of common prosperity,
aiming for a large middle class, and so on. So
(28:47):
there is a happy development here that could take place
where this in fact pushes long China's own ambitions for
changing the structure of the economy. If you're used to
the environmentalist messaging of consumption is the root of all evil,
it might sound a terrible idea to increase consumption, but
the point here for emissions is that household consumption is
(29:10):
in fact much less carbon intensive than the construction and
manufacturing industries which have been driving growth in the past.
So if more of the spending power in the economy
was directed to households, they would spend much more of
that on services like healthcare or a range of other services.
(29:31):
And even the manufacturing that caters to households is much
less energy intensive than the manufacturing that caters to the
construction sector, for example.
Speaker 3 (29:42):
And what about China's climate diplomacy Given the past decade,
we've seen the US flip every time there's been a
change in the president, but there have been moments where
US and China have cooperated. But now that the US
is firmly the Trumpet administration not going to be part
(30:03):
of climate diplomacy and maybe even play the role of spoiler.
How is China responding to this moment.
Speaker 1 (30:12):
I think two things have changed. If you think to
Obama's announcement in twenty fourteen, where the two leaders announced
their new climate targets together, so one of them is
the entire political dynamic in both countries. It's very hard
to see that there would be any kind of political
(30:34):
upside for seeing in the current atmosphere from announcing something
like this together with a US president, because that would
be just seen as caving and being weak. So China
has been very clear that their ambition is unchanging, is
not influenced by pressure from others. And the other thing
that has really changed is that clean energy industry, including exports,
(30:58):
has become such a key driver of China's economy that
China has a much stronger self interest now in also
keeping a global and transition going. So just in the
past few years, China has made a massive investment in
manufacturing capacity for solar, for batteries for evs and so on,
(31:19):
and if the global transition styled, that would mean that
quite a bit of that capacity would go unused and
cost financial distress. That said, this hasn't really translated into
multilateral diplomacy from China yet. So China, for example, didn't
put its weight behind the target of dripling renewables and
(31:43):
doubling efficiency. So this is where China still needs to
get more comfortable with taking the initiative and in fact
persuading other countries to do more. And I think here
things are really going to change. Once a China's leader
are secure in thinking that they've turned the ship on emissions,
(32:05):
they're going to be a lot more comfortable because they
don't have to be defensive about their emissions growth anymore.
Speaker 3 (32:12):
If this is the peak, how quickly will we see
a decline or will it be a slope plateau like
it has been for coal consumption over the past decade.
Speaker 1 (32:24):
There's certainly a risk of China getting stuck at pretty
much current levels of emissions in the absence of setting
ambitious emission reduction targets for twenty thirty five. I think
one key concern is that once the coal industry starts
to see their demand go down in absolute terms, especially
(32:47):
as they've been investing in new coal mines, new coal
fired power plants recently, that could generate a lot of pushback,
but at the same time, keeping emissions at a plateau
would mean upsetting the growth ambitions of the cleaner engine industry,
So there's going to be pushed from both sides. But
so the targets that China's going to set this year,
(33:11):
first in its new Paris Commitment and then in the
five year Plan that is due to be released next year,
will be key in calibrating that level of ambition.
Speaker 3 (33:21):
And finally, what do people in China think about the
US right now, which is the world's largest producer of
oil and gas, has a ton of fossil fuels still
available for it to burn, but it is not really
deploying electricity technologies which are more efficient and economically cheaper. Instead,
(33:42):
it is doubling down on fossil fuels, especially under this administration.
Do they see the US losing out on the future
of energy, even as it might be currently the global
energy superpower.
Speaker 1 (33:57):
I was, in fact in Beijing when the US election
results were coming in, and I can say that in
a room full of Chinese people, I was the only
one who was trying to check my phone under the
table for the results. So people weren't paying as much
attention as Americans might expect, and also when under the
(34:20):
Biden administration the US was starting to actually make an airport,
I think the reaction from Chinese experts was one of skepticism,
or at least one of wait and see, like see
whether the US can actually pull this off, because there
(34:41):
is a sense that the US is so far behind,
especially in terms of manufacturing, and it just doesn't have
the kind of ecosystem and the kind of uh, let's
get it done spirit that China has. So currently, I
think Chinese experts and Chinese policymakers are very comfortable and
secure in thinking that they have the lead in these
(35:04):
markets and technology areas, and it would actually be really
good to get some more competition. So if there was
more of a sense that others are at least making
an effort to catch up and put up some competition,
that would keep China moving faster.
Speaker 3 (35:21):
Thank you, Laurie, thank you so much, and thank you
for listening to zero. Now for the sound of the week.
(35:44):
That was the sound of a bucket reel excavator used
for open pit coal mining, and it's essentially a shovel
as big as a skyscraper. If you liked this episode,
please take a moment to rate and review the show
on Apple Podcasts or Spotify. Share this episode with a
friend or with a China skeptic. This episode was produced
(36:05):
by Oscar Boyd. Noomberg's head of podcast is Saige Bauman
and head of Talk is Brendan newnham Our. Theme music
is composed by Wonderly Special Thanks to Jessica Beck eleanor
Harrison Dengate, Soamersadi, Moses Andam and Sherwan wagner I am
Akshatrati Back soon.
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