LONDON, Oct. 1, 2020 /PRNewswire/ -- On 22 September, in a statement to the United Nations General Assembly, President Xi Jinping announced to world leaders that China "aims to have CO2 emissions peak before 2030 and achieve carbon neutrality before 2060"1. The part of this statement concerning CO2 was brief and included no further details about the means by which China would pursue these goals.
This Insight explains why CRU believes that this announcement is extremely important and which industries are likely to be impacted most significantly. In a series of CRU Insights that will follow over the next several months, CRU will write about the strategies that are being used to meet these CO2 targets as more details supporting this announcement unfold. We will focus on the impact of these policies on the mining, metals and fertilizer industries. CRU's China offices are uniquely placed to follow this topic and to help clients evaluate the implications of these policies.
Why is this important?
In total volume, China is the biggest emitter of CO2, producing around 27% of global CO2 emissions. China has already embarked on a carbon emission reduction program and signed up to the Paris Agreement on Climate Change. However, this unexpected announcement is likely to prove very significant since it represents a unilateral announcement to the whole world that China intends to "take decisive steps to honor the Paris Agreement".
Previous experience suggests that China has the capability and track record to carry through what it plans to do, especially concerning environmental goals. Previous targets announced for the 13th Five-Year Plan (2016-2020) have largely been met. In fact, China is well on its way to meeting its first challenge for carbon emissions to peak before 2030. However, the second challenge to reverse and offset CO2 emissions to obtain carbon neutrality before 2060 is a gargantuan challenge.
This is not just because China is the largest producer of CO2 emissions but also because of where China is in its development trajectory. China is still in the "catch-up" growth phase of its development, navigating additional infrastructure and urbanization, which will make carbon neutrality a "bigger ask" relative to other advanced economies who have comfortably passed that phase of peak energy demand. Some radical changes to energy and industrial policy are likely to be required which will impact all aspects of economic life in China.
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