For all the newly hatched virtue-signaling “climate change warriors”, starting with Greta Thunberg of course, we have just one message: please take your complaints to Beijing (if you dare).
As Goldman’s Chinese economists write, to date, over 120 countries have announced targets to cut greenhouse gas (GHG) emissions and China’s recent commitment “may be one of the most ambitious”, if not most ridiculous. At the United Nations General Assembly last September, President Xi Jingping pledged that China is targeting peak CO2 emissions by 2030 and carbon neutrality by 2060. At the Fifth Plenum of the 19th Party Congress last October, discussions around the 14th Five-Year Plan and China’s long-term goals outlined stabilizing and falling carbon emissions by 2035. Last December, the government issued a white paper titled “China’s energy development in the new era”, and in February 2021, the State Council released the guidance for building a green low-carbon economic system.
While it is clear that China has – at least in theory – begun to lay the ground for achieving net zero emissions over the next four decades, the question is how much of this is just a virtuous smokescreen to shut up critics. In response, Goldman analysts have done extensive work on this topic, modeling the technological paths to net zero sector by sector, from renewable power to electric mobility, and from hydrogen to carbon capture, to we provide a macro perspective and look at the economics of China de-carbonization given the unique challenges it faces and the advantages it has.
As Goldman summarizes, “there is little doubt that “Carbon Neutral 2060” will be an enormous undertaking given China’s natural endowment of coal, China’s economic structure of being an industrial powerhouse and its current stage of economic development.” That said, features of its political and economic system also suggest that China may be better positioned to take on the challenge than other countries. In the case of China, Goldman expects a two-step multi-speed approach where most of the emission-cutting takes place after 2035 and different sectors and regions proceed at different paces.- READ MORE
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