Does China deserve its reputation as a supply chain super polluter?

18 February 2022

Deciding to invest in new coal projects has cemented China’s reputation as a super polluter but as the source of many global supply chains, does it deserve to carry all of the blame?

Climate activist Greta Thunberg was mocked by the Chinese state media last year and labelled an “environmental princess” by numerous critics. Her crime? The young activist had tweeted: “We can’t solve the climate crisis unless China drastically changes course.” China, she said, was “ruining future and present living conditions”. 

It is undeniable that China’s emissions are extreme. In 2020, global CO2 emissions reached 36.7bn metric tonnes and China was responsible for almost one third, emitting 10.49bn metric tonnes. One report by research and data analyst the Rhodium Group even found that the country’s annual emissions in 2019 exceeded those of all the developed nations combined.

But China’s emissions could be seen as relatively low when viewed against the size of its population. According to Our World in Data, the US emitted double the amount of CO2 per person than China in 2020, producing 14.2 tonnes of CO2 per person compared with China’s 7.4 tonnes. And Qatar produced four times as much as China, totalling 37 tonnes per individual in 2020.

Importance of the energy mix

Coal production ramped up in China last year, making it the largest contributor to the human-made increase in CO2 in Earth’s atmosphere, according to the International Energy Agency. In fact, as campaigners called for an end to coal, China commissioned 38.4GW of new coal plants in 2020, representing 76% of the world’s total commissioned plants and a net increase of 29.8GW.

The figures paint a poor picture but droughts significantly reduced hydroelectric production and wind generation was down, which, coupled with increased demand for goods post-pandemic and global rises in energy costs, created a massive energy gap for China. The country increased its reliance on coal to keep itself, and the world, in business.

In response, more than 100 mines received approval to expand production, with estimates that this would lead to an additional 55 million tonnes of coal to be mined in the fourth quarter of 2021.

However, it’s not all bad news. Philip Andrews‑Speed​, senior research fellow at the Oxford Institute for Energy Studies, says the energy problem is “stabilising”.

He tells SM that the country’s policy to temporarily shut down high-intensive industries (including steel and cement), while having a large impact on global supply chains, has helped ease energy shortages. In fact, he argues the higher coal output should not increase the country’s emissions drastically. “In the short term, emissions will rise but many manufacturing plants will remain closed throughout the winter, which will dampen the effect,” he says.

What are the alternatives to coal?

China is simultaneously the world leader in carbon emissions and renewable energy, says the Centre for Strategic and International Studies. The country possesses more than 500TW of wind and solar energy, which it plans to more than double to 1,200TW by 2030. That’s a solar capacity greater than that of Europe and the US combined, and double the wind power of the US.

Funds are equally sizeable, with $83.6bn poured into renewable capacity in 2020. However, Swithin Lui, a climate policy analyst at NewClimate Institute, warns that while it is “positive” to see China’s incredible investments in renewables, it will not be enough to offset its emissions without further action.

He tells SM: “The heavy investment and development of renewables is a positive trend but, due to the sheer scale of Chinese emissions and its continued – yet slowly diminishing – reliance on fossil fuels for power, it is not yet sufficient for the Paris Agreement’s temperature goals.” Lui argues this is because a “substantial share” of Chinese emissions comes from its heavy industry subsectors, where “renewables alone will not be able to completely decarbonise”.

Fuelling the world's factory

China is often considered to be the world’s factory. In 2019, it accounted for 28.7% of global manufacturing output, equating to an estimated $4tn of goods. Under the Paris Climate Agreement, countries are held responsible for emissions produced within their own borders, but not those outsourced to other countries in their supply chains – something a Global Efficiency Intelligence and KGM & Associates report describes as “carbon loopholes”.

The report found that between 1995 and 2015, while wealthy countries (including Japan and Germany) cut their own carbon emissions, they simultaneously doubled or tripled the amount of carbon they outsourced to China. And in the UK, Prime Minister Boris Johnson was keen to stress at the COP26 climate summit in November that Britain cut its domestic emissions by a third between 1990 and 2015. However, the report found that if you include the carbon from the UK’s supply chains, such as those for the materials used to build cars and London’s skyscrapers, then Britain’s carbon footprint actually increased over that given period.

Dr Stephen Cornelius, chief adviser on climate change at WWF, argues countries that rely on others for manufacturing need to take greater responsibility for their outsourced emissions and total supply chain footprints.

He said in a press release: “We need to be honest about our emissions – that means tackling those in the goods and services we buy in, not just the ones we make here. As an influential nation which has shown it can act as a global leader on climate change before, we have the ability to take responsibility for emissions that are down to UK demand alone.”

A global supply chain challenge

So has China become a scapegoat for the global emissions problem? “Scapegoat is a strong word because virtually all countries are in the hot seat,” Lui says. “If global mitigation efforts are to limit warming below 1.5C as agreed in the Paris Agreement, it is simply the case that China needs to reduce its emissions.”

But despite his criticisms of the country, Lui says there is hope. “In recent years, we have seen a strong resolve from China to achieve and improve on its climate commitments at the highest level, as well as to transition the future economy towards less carbon-intensive, high-tech and service-based activities,” he says.

Furthermore, Lui stresses the focus should not be on China alone. “It is vitally important for China – but also for all countries – to not only reduce its emissions and meet its promised NDC [nationally determined contribution] targets but to enhance those targets as well,” he says. “All countries need to scale up mitigation efforts and target ambition. China can play a leadership role given it is the largest global emitter. The call from COP26 – for all countries to revisit and strengthen their NDCs in 2022 in line with the 1.5C goal – needs to be taken seriously by all.”

China’s emissions are certainly at odds with targets in the 2015 Paris Agreement to keep global warming to below a 1.5C rise on pre-Industrial levels. But critics who are quick to point the finger should take a closer look at how much of their supply chains, and responsibility, can be traced back to the East.

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