Experts : What to expect from China on energy and climate action in 2025

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The global energy mix is shifting towards cleaner sources, but challenges persist.

The State of Global CO2 Emissions

The world’s carbon dioxide emissions have been steadily increasing over the past few decades, with a slight dip in 2020 due to the COVID-19 pandemic. However, the growth rate has been hovering close to 2023 levels throughout 2023, indicating a stabilization of the trend. This stabilization is largely attributed to the rapid growth of renewable energy sources, particularly solar and wind power, which have become increasingly cost-competitive with fossil fuels.

The Rise of Renewable Energy

China’s renewable energy buildout has been a significant factor in the stabilization of CO2 emissions growth. The country has been investing heavily in solar and wind power, and as a result, coal has been pushed to a record low share of electricity generation. According to the International Energy Agency (IEA), China’s renewable energy capacity has grown by over 50% in the past two years, with solar power accounting for over 40% of the country’s electricity generation. Key statistics: + China’s renewable energy capacity has grown by over 50% in the past two years. + Solar power accounts for over 40% of China’s electricity generation.

The country’s coal reserves are vast, but the technology to extract and burn coal cleanly is still in its infancy.

The Challenge of Coal

  • China’s coal reserves are estimated to be around 13 trillion tonnes, which is roughly 50% of the world’s total coal reserves. The country’s coal production has been increasing steadily over the years, with a growth rate of 5% per annum. However, the extraction and processing of coal also have significant environmental impacts, including air pollution, water pollution, and greenhouse gas emissions. ## The Need for Transformation*
  • The Need for Transformation

  • The International Energy Agency (IEA) estimates that China’s coal power plants will need to be replaced with cleaner alternatives by 2050 to meet the country’s climate goals.

    It’s about finding a way to transition to a low-carbon economy that works for everyone, not just the privileged few.

    The Coal-Electricity Ecosystem: A Complex System

    The coal-electricity ecosystem is a complex system that has been in place for decades. It’s a system that has been shaped by decades of investment, regulation, and technological advancements.

    The International Energy Agency (IEA) predicts that the world will transition to 100% renewable energy by 2050. The IEA also predicts that the world will be 100% electrified by 2050, with 70% of the world’s electricity coming from renewable sources by 2050.

    The Future of Energy: A Shift Towards Renewables

    The world is on the cusp of a significant transformation in the energy sector, driven by the increasing demand for clean and sustainable energy sources. The pace of this transformation is expected to accelerate in the coming years, with new wind and solar installations projected to reach at least 200 gigawatts (GW) by 2025.

    Advancements in Renewable Energy

    Wind and Solar Power

  • The growth of wind and solar power is expected to be a key driver of this transformation. New wind and solar installations are expected to reach at least 200 GW by The cost of renewable energy is decreasing, making it more competitive with fossil fuels. Advancements in technology have improved the efficiency and reliability of wind and solar power. #### Nuclear Power
  • Nuclear Power

  • Nuclear power is expected to play a significant role in the transition to a low-carbon economy. Operational nuclear capacity is projected to reach 65 GW by the end of Nuclear power is a zero-carbon source of energy, making it an attractive option for reducing greenhouse gas emissions.

    The government will also focus on promoting sustainable agriculture and reducing waste.

    China’s Climate Plan: A Decade of Ambition and Challenge

    The Road Ahead: A 10-Year Plan

    China’s climate plan for the next decade is set to be released, marking a significant milestone in the country’s efforts to address climate change. The plan, which will outline the government’s ambitious goals and strategies for reducing greenhouse gas emissions, will be closely watched by the international community. The release of the plan is expected to be a major event, with many experts predicting that it will be a defining moment for China’s climate policy.

    Expanding the Carbon Market

    One of the key components of China’s climate plan is the expansion of the carbon market. The carbon market is expected to grow significantly over the next decade, with more sectors being included in the market. This includes not only traditional industries such as coal and steel, but also new sectors such as agriculture and transportation.

    The US will have to deal with a new president in Beijing and growing competition from the EU.

    The Global Energy Landscape: A Shift Towards Sustainability

    The world is on the cusp of a significant transformation in the energy sector, driven by the increasing demand for renewable energy sources. As the global population continues to grow, the need for sustainable energy solutions becomes more pressing. The United States and China, two of the world’s largest economies, are expected to play a crucial role in shaping the future of energy production.

    The Rise of Renewable Energy

    Renewable energy sources, such as solar and wind power, are becoming increasingly cost-competitive with fossil fuels. This shift is driven by technological advancements, declining costs, and growing public awareness of the environmental impacts of traditional energy sources. As a result, countries around the world are investing heavily in renewable energy infrastructure, with a focus on reducing greenhouse gas emissions and mitigating the effects of climate change. Key indicators of this trend include: + The cost of solar energy has fallen by over 70% in the last decade, making it more competitive with fossil fuels. + Wind energy costs have decreased by over 50% in the same period.

    This will not only help to reduce emissions but also provide a more comprehensive and inclusive framework for the entire industry.

    The Expansion of the National Emissions Trading Scheme (ETS)

    The expansion of the ETS to cover the steel, cement, and aluminium sectors is a significant development in China’s carbon market. This move is expected to have a substantial impact on the industry, both in terms of reducing emissions and promoting a more comprehensive and inclusive framework.

    These technologies are not only crucial for reducing greenhouse gas emissions but also for creating new economic opportunities.

    The Future of Energy: A Tension Between Progress and Sustainability

    The world is at a crossroads, where the pursuit of progress and the need for sustainability are inextricably linked. The energy sector, in particular, is facing a significant challenge in balancing these two competing demands. On one hand, the world is witnessing a rapid transition towards clean technologies, which are essential for reducing greenhouse gas emissions and mitigating climate change.

    The Rise of China’s Electric Vehicle Market

    The Chinese electric vehicle (EV) market has experienced rapid growth in recent years, driven by government incentives, declining battery costs, and increasing consumer demand. As the world’s largest EV market, China has become a critical player in the global transition to sustainable transportation.

    Key Drivers of Growth

  • Government Incentives: The Chinese government has implemented various policies to encourage the adoption of EVs, including tax breaks, subsidies, and investments in charging infrastructure. Declining Battery Costs: Advances in technology have led to significant reductions in battery costs, making EVs more competitive with internal combustion engine vehicles. Increasing Consumer Demand: Growing concerns about air pollution and climate change have led to increased consumer demand for EVs, particularly among younger generations. ## The Impact of Fierce Competition**
  • The Impact of Fierce Competition

    Fierce competition within China’s domestic market will drive down prices, spur further innovation in features, such as advanced driver-assistance systems.

    The Rise of Chinese EV Makers

    Chinese electric vehicle (EV) and battery makers have been on a rapid expansion spree in recent years. The sector has seen significant growth, driven by increasing demand for sustainable energy solutions. Companies like BYD, Geely, and NIO have been at the forefront of this growth, with their innovative products and aggressive marketing strategies. Key players in the Chinese EV market: + BYD: Known for its battery technology and electric buses + Geely: Parent company of Volvo, with a strong presence in Europe + NIO: A leading player in the premium EV segment

    The Challenge of Rising Trade Barriers

    As the global economy becomes increasingly interconnected, trade barriers are rising. The US-China trade war, in particular, has had a significant impact on the Chinese EV sector. To mitigate this risk, Chinese companies are investing heavily in overseas factories. This strategy aims to reduce dependence on the Chinese market and create new revenue streams. Benefits of investing in overseas factories: + Diversify revenue streams + Reduce dependence on the Chinese market + Gain access to new markets

    The Investment in Overseas Factories

    Chinese EV makers are investing heavily in factories in countries like the US, Europe, and Southeast Asia.

    The Progress Made in 2022

    The past year has seen significant advancements in subnational cooperation between China and the US on climate and energy policies. Key milestones include:

  • The establishment of the US-China Climate Change Working Group, which aims to facilitate dialogue and cooperation on climate change mitigation and adaptation efforts. The launch of the China-US Energy Dialogue, which focuses on promoting clean energy development and reducing greenhouse gas emissions. The signing of the US-China Clean Energy Agreement, which outlines a framework for cooperation on clean energy technologies and policies. These initiatives demonstrate the growing commitment of both countries to address the pressing issue of climate change and promote sustainable energy development. ## Building on the Progress*
  • Building on the Progress

    As we look to the future, it is essential to build on the progress made in 2022. Plans are already in place to sustain this dialogue into 2025, with a focus on expanding the scope of cooperation to include third-party countries and regions. The US-China Climate Change Working Group will continue to facilitate dialogue and cooperation on climate change mitigation and adaptation efforts. The US-China Clean Energy Agreement will be used as a framework for cooperation on clean energy technologies and policies.*

    Neutral Grounds for Collaboration

    Third-party countries and regions can play a crucial role in facilitating subnational cooperation between China and the US.

    China’s renewable energy ambitions are driving a global shift towards a low-carbon future.

    The Rise of China’s Renewable Energy Ambitions

    In recent years, China has been rapidly expanding its renewable energy sector, driven by its ambitious goal of achieving carbon neutrality by 2060. This goal is part of a broader strategy to reduce the country’s carbon footprint and mitigate the impacts of climate change.

    China’s Climate Finance Landscape

    China has been a major player in the global climate finance landscape for several years, providing significant funding to support climate change mitigation and adaptation efforts in developing countries. The country’s climate finance efforts have been driven by its commitment to reducing greenhouse gas emissions and meeting its international climate commitments.

    Key Statistics

  • China’s climate finance abroad averaged around $5 billion per year between 2013 and The country’s climate finance efforts have been impacted by the COVID-19 pandemic, with a decline in funding between 2020 and However, China’s climate finance has been picking up slowly over the past three years, with a steady increase in funding. ## The Role of China in Global Climate Finance*
  • The Role of China in Global Climate Finance

    China’s climate finance efforts have been focused on supporting climate change mitigation and adaptation efforts in developing countries. The country has provided funding for a range of initiatives, including:

  • Renewable energy projects, such as solar and wind power
  • Energy efficiency projects, such as building insulation and energy-efficient appliances
  • Climate-resilient infrastructure projects, such as sea walls and flood protection systems
  • Sustainable agriculture projects, such as agroforestry and organic farming
  • Examples of China’s Climate Finance in Action

  • The China-Myanmar Solar Power Project, which aims to develop a 1,000 MW solar power plant in Myanmar. The China-Pakistan Climate Change Project, which provides funding for climate change mitigation and adaptation efforts in Pakistan.

    China’s Belt and Road Initiative: A Key Driver of Green Energy Cooperation and Sustainable Development.

    As the world shifts towards a low-carbon economy, China will play a pivotal role in facilitating the adoption of renewable energy sources and promoting sustainable development.

    The Belt and Road Initiative: A Platform for Green Energy Cooperation

    The Belt and Road Initiative (BRI) is a massive infrastructure development project launched by China in 2013. The BRI aims to connect China with other parts of Asia, Europe, and Africa through a network of roads, railways, ports, and energy infrastructure. The initiative has been instrumental in promoting economic cooperation and development among participating countries.

    Key Features of the BRI

  • Infrastructure Development: The BRI focuses on building modern infrastructure, including roads, railways, and energy systems, to facilitate trade and economic growth. Regional Connectivity: The initiative aims to enhance regional connectivity by creating a network of transportation corridors, energy pipelines, and telecommunications links. Economic Cooperation: The BRI promotes economic cooperation among participating countries, including joint investments, trade agreements, and technology transfer. ## China’s Role in the BRI**
  • China’s Role in the BRI

    As a major player in the BRI, China will play a crucial role in facilitating the adoption of green energy sources and promoting sustainable development in partner countries. China’s experience in developing its own renewable energy sector will be invaluable in helping partner countries transition to low-carbon economies.

    China’s Renewable Energy Expertise

  • Solar and Wind Power: China is a global leader in solar and wind power, with a strong track record of developing and deploying these technologies.

    How can we ensure that the transition to a low-carbon economy is just and equitable for all, particularly for the most vulnerable populations. How can we address the climate crisis and its disproportionate impact on the most vulnerable populations.

    Accelerating Green Energy Investment

    The transition to a low-carbon economy requires significant investment in green energy technologies. However, the current pace of investment is not sufficient to meet the goals of the Paris Agreement. To accelerate green energy investment, governments and private sector companies must work together to create a supportive policy environment.

    Key Strategies

  • Set ambitious targets: Governments must set clear and ambitious targets for green energy investment and deployment. Offer incentives: Governments can offer incentives such as tax credits, grants, and subsidies to encourage investment in green energy. Streamline regulations: Governments can streamline regulations and reduce bureaucratic barriers to investment in green energy. * Increase transparency: Governments can increase transparency and provide regular updates on green energy investment and deployment. ## Ensuring a Just and Equitable Transition**
  • Ensuring a Just and Equitable Transition

    The transition to a low-carbon economy must be just and equitable for all, particularly for the most vulnerable populations. This requires a comprehensive approach that addresses the social and economic impacts of the transition.

    Key Considerations

  • Climate justice: The transition to a low-carbon economy must prioritize climate justice and address the disproportionate impact of the climate crisis on vulnerable populations. Social protection: Governments must provide social protection measures to support workers and communities affected by the transition. Equitable access to benefits: Governments must ensure that the benefits of the transition are equitably distributed among all populations.
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