nd of 2014, China had released draft GHG accounting guidelines to cover 14 key industries, and on November 12th, it issued draft rules and guidelines for tracking carbon emissions in ten more key industrial sectors.
The Good News: China’s Coal Consumption is Now Dropping and May Already Have Peaked
All the discussion about China’s revised historic coal consumption data seems to have overshadowed the good news: that China’s physical coal consumption in 2014 actually fell by 2.9%, while its heat value coal consumption was flat. Even more important, China is on track in 2015 to register the largest drop in coal consumption in history. According to a new Greenpeace report, China’s coal consumption fell by at least 2.3% and possibly as much as 4.6% in January-September 2015, compared to the same period a year ago.
This is consistent with a new analysis by the Institute for Energy Economics and Financial Analysis (IEEFA) showing that global coal consumption has likely peaked:
- China’s coal production and consumption looks to have peaked in 2013;
- China’s thermal coal imports peaked in 2013, having fallen 40% since then;
- World coal consumption peaked in 2013, declined 0.7% in 2014 and is on track to decline an additional 2-4% in 2015;
- Japan’s thermal coal imports likely peaked in 2014; and
- Indian thermal coal imports likely peaked in mid-2015.
According to the IEEFA, “History could record 2013-2014 as showing that China coal production and consumption peaked, international coal imports peaked, and global thermal coal consumption peaked as well.”
Why China’s Coal Use is Dropping
China’s falling coal use is not simply a result of its slowing economy. Rather, according to a recent study by the London School of Economics, it reflects China’s fundamental shift to a new phase of economic development – a “new normal” – that is continuing to promote economic growth while driving down its greenhouse gas emissions.
China’s new growth model focuses on shifting away from heavy industry towards consumption and services, promoting innovation, reducing inequalities and ensuring environmental sustainability. China’s goal is to achieve better quality growth by promoting efficiency, clean energy and pollution control — all of which translate into lower coal consumption.
The authors of this report, Fergus Green and Lord Nicholas Stern, stated:
In our analysis of structural and cyclical trends in the electricity and industrial sectors, we conclude that China’s coal use has reached a structural maximum and is likely to plateau over the next five years. Though there are some structural risks of coal use increasing over this period, there are possibilities, in our view more likely, that it will continue to decline.
They concluded that in light of China’s fundamental economic and policy shifts, it is likely to peak its CO2 emissions by 2025 or even earlier, rather than by 2030 as it has pledged. This is consistent with the findings of the China Coal Consumption Cap Plan and Research Report: Recommendations for the 13th Five Year Plan.
China’s transition away from coal to cleaner energy is of major importance, not only for the climate negotiators, but for all of us. As President Obama remarked at a press conference yesterday following a trip to Asia:
Sometimes, back home, critics will argue, there’s no point in us doing something about getting our house in order when it comes to climate change because other countries won’t do anything and it will just mean that we’re in a less competitive position. Well, when I met with President Xi and China signed on to an aggressive commitment, that took a major argument away from those critics.
We — now the two largest emitters — signed on. And it makes sense for us and the Chinese and the Europeans and others to help these countries, because, ultimately, if a country like India, for example, with over a billion people, is a major polluter, that’s going to affect all of us. If, on the other hand, they’re developing and growing in a clean way, that’s going to be good for all of us.