EnergyChina’s Climate Matters To Us All.

Kennnedy MuturiOctober 3, 202240912 min
source: freepick.com

Scientists agree that the world cannot win the fight against climatic changes unless China reduces its emissions significantly. In 2020, Chinese President Xi Jinping stated that his country’s emissions would peak before 2030 and that carbon neutrality would be achieved by 2060. China’s official stance has been confirmed, just in time for the COP26 global climate summit in Glasgow. China, however, has not specified how these goals will be met as stated on Bloomberg .

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Whereas other countries are attempting to reduce their emission levels, China has the most challenging task ahead of it. Although China’s emission levels per person are probably half that of the US, it’s massive 1.4 billion population and rapid economic development have accelerated it far ahead of any other country in terms of overall emission levels.

China surpassed the United States as the world’s largest carbon dioxide producer in 2006, accounting for more than a quarter of global greenhouse gas emissions. Its commitments to reduce these are expected to be closely scrutinized at the COP26 meeting. China agreed in 2015, along with all other Paris Agreement signatories, to make changes to limit global warming to 1.5 degrees Celsius above pre-industrial levels and “well below” 2 degrees Celsius according to Intergovernmental Panel on Climate Change . China’s commitments were strengthened in 2020, but an international group of scientists and policy experts, China’s current actions are “highly insufficient” to meet that target.

President Xi has reported that China will “scale down” its coal use by 2026 and will not build new coal-fired power plants abroad, but other countries and campaigners believe the plans are inadequate. According to Tsinghua University in Beijing, with nuclear and renewable energy production taking its place, China will need to completely phase out coal-fired power generation by 2050. Rather than shutting down coal-fired power plants, China is building new ones in over 60 locations across the country, with many of these sites housing multiple plants according South China Morning Post .

New power plants typically operate for 30 to 40 years, so if China wants to reduce emissions, it will need to reduce the capacity of newer plants and close existing ones; is According to Philippe Ciais of the Institute of Environment and Climate Science in Paris.

Some plants may be able to be retrofitted to capture emissions, but the technology to do so on a large scale is still in development, and many will have to be shut down after only a few years of operation.

China claims it has the legal right to do what Western countries have done in the past, namely, release carbon dioxide as part of its economic development and poverty reduction efforts.

Beijing has directed coal miners to increase output in the short term to avoid power outages this winter. Heavy industrial demand has skyrocketed in the aftermath of the Covid-19 epidemic, resulting in shortages in several nation areas in recent weeks.

According to Tsinghua University academics, nuclear and renewable energy should account for 90% of total power generation by 2050  .

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China’s leadership in green technology manufacturing, such as solar panels and large-scale batteries, could significantly help meet that goal.

China was among the first countries to embrace green technology to combat air pollution, which is a significant issue in many cities. The government believes they have enormous economic potential because they can bring jobs and income to millions of Chinese while reducing China’s dependency on foreign oil and gas.

China generates the most solar energy of any country on the earth. This may not seem remarkable given China’s vast population, but it is symptomatic of the country’s direction.

By 2020, China will have more than double the quantity of wind power installed than any other country. China has stated that it intends to generate 25% of its energy from non-fossil fuel sources by 2030, and many analysts believe it will meet that goal sooner. China ranks eighth in the world in terms of electric vehicle sales, but it produces and purchases far more than any other country due to its massive size.

Currently, one in every twenty cars purchased in China is an electric vehicle. According to the Chinese government and auto industry executives, almost all new vehicles delivered in China by 2035 will be completely electric or hybrid as stated by SGP.FAS .

Calculating how much emissions are reduced by switching to electric vehicles is tricky, especially when manufacturing and charging choices are considered. However, studies show that emissions from electric vehicles are generally lower than those from gasoline and diesel vehicles during their lifetimes.

This is crucial since transportation contributes around a quarter of all carbon emissions from fuel combustion, with road vehicles being the most significant producers. China will also produce batteries with twice the capacity of the rest of the world combined by 2025.

According to observers, this will enable the storage and release of renewable energy in previously unthinkable ways.

China will not stop emitting simply because it has achieved net-zero greenhouse gas emissions. It means that China will employ various strategies to reduce emissions as much as possible while absorbing the rest. Plants absorb CO2, so increasing the amount of land covered in vegetation will help. There is also some good news here.

The success of China is critical to the rest of the world.

“We’re not going to fight climate change unless China decarbonizes,” says David Tyfield, a professor at the Lancaster Environment Centre. China has several distinct advantages, including the ability to stick to long-term plans and mobilize large-scale expenditures. The Chinese government faces a massive challenge. It is impossible to overestimate the significance of what follows.

Kennnedy Muturi

Ken is a Quantitative Trader with experience in investments, quantitative finance, financial modelling and algorithmic trading in Global Investable Markets (GIM). He enjoys using Bayesian Statistics, Time Series and Machine Learning in developing Robust consistent Alphas in Equities Market, FX, ETPs and Derivatives instruments. He enjoys deep dives in understanding High Frequency Trading infrastructures and improving how the African financial markets work. He holds a Bachelor's in Actuarial Science from Strathmore Institute of Mathematical Sciences : An Executive Program in Algorithmic Trading (EPAT) certificate in Algo Trading from QuantInsti : A current MSc student in Financial Engineering at World Quant University.

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