Big numbers are a hallmark of China’s economy and now its energy transition: they thrill, they mystify, and at times they contradict, at least on the surface.
China’s solar capacity is now 228 gigawatts (GW), more than the rest of the world combined, according to Global Energy Monitor. And wind capacity, at a whopping 310GW, also leads the world. With another 750GW of new wind and solar projects in the pipeline, China will hit its 2030 target of 1,200GW – an unimaginable number when proposed just a few years ago – five years early.
Scratching through the big numbers, two issues deserve the world’s deeper understanding. The first is that China’s successful clean technology campaign has more to do with its economic strategy than its climate commitments. The second is that, alongside its impressive achievements in renewable energy, China is also one of the world’s biggest polluters. Neither is likely to change imminently.
The ability to manufacture at scale and quality, and deploy funds competitively, underpins China’s impressive growth of wind and solar, as well as electric vehicles. This is the outcome of an industrial policy that features consistent state support, highly integrated supply chains, cut-throat competition, indigenous innovation and entrepreneurship, and the economies of scale that only a country the size of China can offer. China’s EV manufacturers, for example, have been supplying millions of cars in a fiercely competitive domestic market for years, and have been boosted by government support. In contrast, their western counterparts are only beginning to enjoy a similar market scale at home. They also face stronger resistance from conventional vehicle producers.
This is not to say that the rest of the world is hopeless in the face of an established clean technology giant. But other countries need to do much better in translating cutting-edge technologies into actual manufacturing. Western countries have prided themselves on innovations in the lab for so long. Failing to bring them to the factory floor or to realise that many innovations take place along the assembly line would be a grave mistake.
For China, the good news is that the economic conditions that propelled its rapid clean technology growth are here to stay. Astronomical numbers are the forecast for the foreseeable future. If anything, Chinese solar and electric vehicle manufacturers will become more efficient and supply ever cheaper solutions to reduce carbon emissions nationally and globally.
These opportunities are key points of leverage as the international community tries to appeal for greater climate ambition from China. Climate diplomats coming to Beijing need to help Chinese leaders realise the alignment between their economic agenda and the climate agenda. Global climate conversations in places such as the G20 and Cops will be better served if they incentivise Chinese action based on its strengths.
China’s current and future domination of clean technology also raises important questions for other countries. Can they become more cost-efficient than China? Are they prepared, economically and politically, to risk the bankruptcy and failure suffered by their Chinese counterparts before many of them emerged as industry leaders? What does deglobalisation in the clean energy supply chain mean for the effort of combating climate crisis? For sound policies and a liveable planet, these questions require serious thought by world leaders, but they have so far been overshadowed by geopolitical zeal.
Meanwhile, China’s rapid clean energy expansion needs to be read together with its continued expansion of new coal power. More than half of all coal the world consumed over the past decade was consumed in China, and the country’s coal fever shows no sign of waning. Just in the first quarter of 2023, provincial governments in China have already approved at least 20.45GW of new coal projects. Coal combustion is currently projected to increase at a “reasonable speed” into 2030.
While the pro-growth and pro-infrastructure development mentality has boosted China’s clean energy sector, it is exactly the same logic that fuels coal development. Beijing is simultaneously becoming the biggest solution provider and the biggest troublemaker.
But in the current climate crisis, the world cannot afford this trend of renewable energy and coal going head to head with one another. Currently, the percentage of China’s electricity that is generated by wind and solar is expected to grow by less than 1% a year between 2023 and 2030. At this rate, the country may achieve peak CO2 emissions before 2030, but is less likely to reach carbon neutrality by 2060, as President Xi Jinping pledged in 2020.
The challenge for China is to maintain its record on clean technology but to shut off the coal pipeline. That will require decisive reforms in its power sector, where many of the rules still favour coal over clean energy sources. Technological solutions such as energy storage could also help the transition in the interim. But ultimately, the country needs to gather the political courage to stop building coal plants and start phasing them out.
As for the rest of the world, global persuasion for China to shift its course on coal is critical. Climate diplomacy won’t be pain free, but it is the only way to tackle the defining global crisis of our times. Countries in the west also need to learn from China, even if there is no simple cut-and-paste solution for them. It is a blessing that a template for success exists. Refusing to learn from each other, in a world where countries are more interested in fighting one another than climate change, would be futile.