China’s rapid growth in green energy and electric vehicles (EVs) has raised hopes that the country’s carbon dioxide emissions, the highest in the world, may peak by 2025. However, experts remain divided on whether Beijing’s progress is sufficient to meet global climate targets. While China has made significant strides, challenges such as carbon intensity reduction and economic reliance on high-tech manufacturing pose ongoing hurdles with implications for global markets and climate initiatives.

1. Progress in Green Energy and Electric Vehicles

China’s renewable energy and EV sectors have expanded at an unprecedented rate:

• Explosive Growth: Over 50% of new cars sold in China were electric for three consecutive months in 2024.
• Renewable Energy Gains: Hydropower has recovered following droughts, while solar and wind energy continue to grow.

These developments have stabilised emissions in 2024, marking a turning point in the country’s decarbonisation efforts.

2. Challenges to Emissions Reduction

Despite progress, China faces significant barriers to achieving its climate goals:

• Carbon Intensity: Beijing aims to reduce carbon intensity by 18% between 2020 and 2025 but is currently off track. Achieving this target would require a dramatic 9.7% emissions cut in 2025 alone.
• Economic Growth: The shift toward high-tech manufacturing, which is more carbon-intensive than services or household consumption, complicates efforts to lower emissions.

Lauri Myllyvirta, an analyst at the Centre for Research on Energy and Clean Air (Crea), highlighted the need for faster renewable energy deployment or a shift to less carbon-intensive economic models.

3. Impact of Global Politics

The return of Donald Trump to the US presidency has created uncertainty in international climate efforts:

• US Withdrawal from Paris Agreement: Trump’s expected withdrawal from the Paris Accord has left China as a key player in global climate negotiations.
• UN Climate Summit: China’s delegation was heavily courted for leadership at COP29 in Baku, where its special envoy, Liu Zhenmin, called for collective international action on climate change.

China’s next steps, including its emissions trajectory for 2030–2035 under the Paris Agreement, will be critical in defining global climate action.

4. Economic and Market Implications

China’s green transition and its broader climate policies have significant implications for global markets:

• Renewable Energy and EV Industries: Continued growth in solar, wind, and electric vehicle sectors will strengthen China’s position as a global leader in green technology, influencing supply chains and investments worldwide.
• Trade Impact: A slower reduction in emissions could exacerbate trade tensions, particularly with Western nations emphasising climate-friendly policies.
• Global Climate Targets: If China fails to meet its emissions goals, it could make achieving international climate commitments nearly impossible, with cascading effects on global markets and sustainability efforts.

5. Future Outlook

China’s dual goals of peaking emissions by 2030 and achieving net zero by 2060 remain central to its climate strategy. While flat emissions in 2024 indicate progress, achieving long-term targets will require:

• Accelerated deployment of renewables and EVs.
• A clearer strategy for reducing carbon intensity.
• Enhanced global cooperation to mitigate political and economic pressures.

Conclusion: Cautious Optimism with Global Stakes

China’s progress in green energy and electric vehicles provides a promising outlook for emissions stabilisation, but significant challenges remain. As the world’s largest emitter, China’s actions will have profound implications for global markets, climate policy, and international cooperation. While optimism builds, the path ahead requires bold commitments and transformative economic changes to ensure a sustainable future.

Source: (FT.com)