Economic stimulus in China drives second year of emissions growth

China’s carbon dioxide emissions grew by roughly 3% last year, according to Greenpeace analysis of the country’s annual ‘statistical communique’. This marks the second year of emissions increases in China – which also recorded growth of 1.7% in 2017. 

A rapid rise in energy consumption, including increased household electricity use and industrial power demand, drove the CO2 rise. According to Greenpeace, expansion in China’s construction industry and sectors linked to it – such as iron, steel and cement – accounted for two-thirds of growth in industrial power demand. 

As economic growth continues to slow in the world’s most populous nation, the government has enacted resource-intensive stimulus measures to try and mitigate the impacts. Increased infrastructure spending is part of these efforts – and industrial energy use has risen as a result. 

Coal consumption in China also rose for the second year in a row in absolute terms in 2018, but coal’s share of total energy consumption fell below 60% for the first time as cleaner power sources come to prominence. 

Gas, nuclear power and renewables now account for a combined 22.1% of generation in China, up 1.3% year-on-year. The country is currently striving to reduce the proportion of coal in its energy mix to under 58% by the end of the decade. 

In a note, Greenpeace analyst Lauri Myllyvirta said that there are several factors that will determine if China’s CO2 emissions rise again this year: 

• whether the government responds to slowing economic growth with another round of stimulus to ‘highly polluting smokestack industries’; 

• whether the government can moderate energy demand growth; 

• whether the speed of clean energy deployment can grow to meet overall demand growth; and 

• whether the war on smog gets back on track after setbacks this winter. 

In March, the Chinese government announced it would extend winter anti-smog measures – which include production cuts and traffic restrictions – for a third successive winter. 

Analysis by Reuters has shown that only six of 39 smog-plagued cities in northern China have managed to reduce concentrations of the toxic particle PM2.5 during the latest anti-smog campaign, which was launched in October last year. On average, PM2.5 concentrations rose 13% last winter. 

Meanwhile, China’s National Development and Reform Commission (NDRC) announced that it will launch the country’s first subsidy-free wind and solar projects this year. In January, the planning agency reported that solar construction costs in China had fallen by 45% from 2012 to 2017, with wind installation costs dropping by 20% over the same period.