The Big Reveal in China’s New Five-Year Plan

The new draft of China’s five year plan is here, and the news isn’t all good for climate advocates. Although China vows to expand its gigantic “clean energy bases” in the plan, it has actually walked back some of its biggest climate goals since 2021. The new plan also contains a mysterious — and politically convenient — change to one of its most important emissions estimates.

On this episode of Shift Key, Rob is joined by Lauri Myllyvirta, the lead analyst and co-founder of the Centre for Research on Energy and Clean Air and one of the world’s top experts on Chinese emissions outside China. Rob and Lauri discuss whether China is creating a new kind of energy hegemony, what really drives the country’s energy strategy, and how the new war in Iran could affect its plans.

Shift Key is hosted by Robinson Meyer, the founding executive editor of Heatmap News.

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Here is an excerpt from their conversation:

Robinson Meyer: Let’s get into this question about the Chinese emissions target. So China, I think, has a reputation internationally for always meeting its emission targets, and for setting emissions targets that it can hit. And when it’s sometimes conservative in its targets, there’s a sense that, okay, well, it is being conservative, but that’s because it’s very focused on setting targets that it can hit. But it sounds like in the run up to this report, it became clear that China was not going to hit its 2030 target under the Paris Agreement. And so, as you write, it basically revised its own accounting metric. Can you just describe what happened there and how it was able to change its accounting midstream, basically?

Lauri Myllyvirta: I’ll start with what is known. China has been reporting on reductions in carbon intensity. Carbon intensity is the amount of CO2 per unit of GDP. And so if emissions stay flat, GDP goes up by 5%, carbon intensity falls by a bit less than 5% in a year.

Meyer: My understanding — and maybe this is wrong — is that up until 2030, the bulk of its emissions targets under the Paris Agreement, its nationally determined contributions, are phrased in the terms of carbon intensity, not in the terms of like, here’s what our national emissions target is going to be. They were primarily talking about, our big target is reducing the carbon intensity of our economy, rather than hitting some kind of tons per year goal that the U.S. and Europe and a lot of other countries adopted.

Myllyvirta: For sure. So for 2020 and 2030, China has had a few different targets, but the one that is most closely related to emissions — and in that sense, the cornerstone target — is carbon intensity. And so until 2020, China was overachieving that target. But then during the COVID and Zero COVID period, China went through a period of very energy-intensive and carbon-intensive growth with the service industries and other less energy-intensive industries were obviously not doing great. So that meant that carbon intensity started falling much more slowly. CO2 emissions grew faster during that period, at least according to the numbers that China had reported.

So they had been reporting carbon intensity reductions every year. And if you take the numbers from 2021 to 2025, they add up to a reduction of about 12% in China’s carbon intensity over that five-year period. And the target was 18% — that’s what they needed to get on track to, or stay on track to the 2030 carbon intensity target, and so that means that if you have a shortfall of six percentage points during these five years, then the target for the next five years becomes very demanding.

But so then along comes this new five-year plan, and it says that we achieved a reduction of 17.7% instead of the 12-point-something percent. So that is a huge revision. If you rephrase that in emission terms, it means that earlier China had said that their emissions over this five year period had increased about 13% in absolute terms. And now they say the increase was only 6%. So half of the emission growth disappeared. So this is what we know for a fact. The less clear part is what is this revision based on?

You can find a full transcript of the episode here.

Mentioned:

Previously on Shift Key: Have China’s Emissions Already Peaked?

China’s 15th Five-Year Plan — Implications for climate and energy transition, by Lauri Myllyvirta and Belinda Schäpe

China Can’t Decide If It Wants to Be the World’s First ‘Electrostate’

This episode of Shift Key is sponsored by …

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Music for Shift Key is by Adam Kromelow.