In 2020, China’s government announced the country’s environmental goals of achieving peak carbon by 2030 and carbon neutrality by 2060.
Last year, a team led by Professor Chen Wenying from Tsinghua University developed an energy-environmental economic model, China TIMES, which identified the impact of achieving peak carbon and carbon neutrality over various timeframes.
The model demonstrated that China’s energy sector needs to act faster if the country is to become carbon neutral on schedule.
China’s carbon dioxide emissions are expected to peak between 2025 and 2030, at a level of 10.3 billion to 10.4 billion tons. By 2030, China’s carbon emission intensity will be reduced by about three-quarters compared with 2005.
However, from 2005 to 2020, China’s average annual carbon emissions decreased by about 4.4 percent, meaning that it is not yet on track to meet the target.
The energy sector has huge potential to reduce emissions, but it will need to act faster.
Take the power sector as an example. It is currently the largest source of emissions, but with the development of renewable energy, decarbonization of the power sector will play a key role in the near future, achieving negative emissions by 2040.
The industrial sector is currently at the stage of upgrading and reducing capacity. With the reduction of energy-intensive industries, the sector’s carbon emissions are also expected to decline.
Both the transportation and infrastructure sectors will reach their peak around 2030, with their emissions then expected to see huge reductions.
Coal will be rapidly replaced by large-scale deployment of renewables such as wind, solar, and biomass by 2040. The proportion of renewable energy will reach 60 percent by 2050, and 90 percent of electricity will be provided by renewables by that time.
As the rate of emission reduction increases, the marginal carbon dioxide emission reduction cost (MAC) also increases year by year. It is predicted that the carbon emission reduction trading price may exceed $100 per ton by 2035, and further exceed $200 per ton by 2050. This is likely to further encourage the capital market to support the energy transformation of relevant sectors.