Clearing the Air in China
Rocky Mountain Institute works with China to peak carbon emissions early and low, and to follow a clean energy pathway for its large and growing economy.
On a fall day in 2015, RMI’s Beijing staff woke up to off-the-chart pollution levels. The city issued its first ever “red alert,” warning residents to stay indoors and take precautionary measures. Days like these — when air pollution levels exceed 200 parts per million (ppm), way over the World Health Organization’s recommendation of less than 10 ppm — are far too common.
Air pollution is just one of the many physical manifestations of an energy system built on fossil fuels, but China faces challenges larger than smog. Some thirty years ago, China’s skylines were mostly buildings of five stories or fewer and the country was a net exporter of oil. On a global scale, the country’s contributions to carbon emissions and energy use were negligible. Today China is the world’s largest carbon emitter, the world’s largest net importer of oil, and the world’s factory. Four of mainland China’s cities — Shanghai, Chongqing, Guangzhou, and Shenzhen — rank in the top ten for cities with the most skyscrapers in the world.
The changing skyline of China’s biggest, and its smallest, cities alludes to a larger development picture. China is urbanizing faster than any other major nation in the world, and it’s doing so at crucial point in history — when the world is collectively facing the challenges and dangers of climate change. Now China is being asked to grow without polluting and at the same time to be the world’s factory at rock-bottom prices.
The outlook could be dire, but a combination of domestic initiatives (China is already a world leader in renewable energy) and pan-Pacific partnerships is changing the equation. In June 2014, after decades of rapid economic growth fueled primarily by fossil fuels, China’s President Xi Jinping called for “a revolution in the production and consumption of energy.” Subsequent actions and public commitments by the government indicate a strong desire to fulfill this vision.
At RMI, we imagine a China that not only runs on renewable energy, but is a global leader in the movement toward clean fuels. We imagine a China that blazes a path for all developing countries, proving that clean energy can be a powerful instrument of economic growth. And we imagine a China where access to energy is equitable and affordable. From conducting groundbreaking research, to convening influential players in China’s industry, to assisting cities to peak carbon emissions sooner, we are working tirelessly to make this vision a reality.
But this vision cannot be accomplished alone. Problems in China come in one size: bigger. Efforts to tackle those problems must be ambitious and incorporate the top thinking from governments, companies, and nongovernmental organizations (NGOs). At RMI, we are dedicated to helping solve China’s greatest energy problems by partnering with leading organizations to effect change.
CHARTING A CLEAN ENERGY PATH
In 2011, RMI published Reinventing Fire, a clean energy roadmap for the United States. It outlined a bold economic strategy to transition the U.S. off coal and oil by 2050 by aggressively deploying energy efficiency and renewables. A key to achieving the economic success in Reinventing Fire — a $5 trillion cost savings compared to the current trajectory — is the integrated transformation of the buildings, electricity, transportation, and industry sectors.
Because of the power of Reinventing Fire in the U.S., forward-thinking RMI supporters asked whether a similar approach might be applied to China. The rationale was simple: If the U.S. was dependent on coal, China was downright addicted. In fact, China uses almost as much coal as the rest of the world combined. But like any addiction, coal use has a dangerous side: It contributes to climate change and pollution. Moreover, RMI recognized that without China, any efforts to combat climate change would inherently fall short.
In 2013, with donor support, RMI launched Reinventing Fire: China to develop an energy plan for China that integrates the largest sectors of the country’s economy to generate massive economic and energy savings.
Reinventing Fire: China is a partnership between RMI and three organizations that have decades of leadership in China. Our Chinese partner, Energy Research Institute (ERI), is a government think tank that helps set national policy on energy issues. This gave us an inside look at the challenges China faces, as well as the opportunities to shape the future. Our U.S. partner is the China Energy Group at Lawrence Berkeley National Laboratory (LBNL), an organization that has been active in China since 1988 and has an impeccable reputation for pushing energy efficiency forward and driving low-carbon solutions in China. And finally, Energy Foundation China (part of the San Francisco-based Energy Foundation), an established advisor to the Chinese government and a grant-making charity organization, has helped fund and shape the clean energy and environmental revolution, advocating the adoption of supportive policies that deliver the Reinventing Fire vision.
“We imagine a China that blazes a path for all developing countries, proving that clean energy can be a powerful instrument of economic growth.”
“When we initially thought about how to transform the Chinese energy economy, we knew we had to partner with the best minds already working in the space,” says Jon Creyts, a managing director at RMI and director of its China Program. “Our partnership with complementary expert teams led by Dai Yande from ERI and Lynn Price from LBNL has resulted in extraordinary fact-based insights. Together, we are now using those findings to drive real change.”
For the past three years, over 40 scientists on both sides of the Pacific have been developing one of the most comprehensive and sophisticated models on China’s energy use yet, and plotting a revolutionary yet practical pathway toward a sustainable, clean energy system for China. The project shows how different stakeholders with a similar vision for the future, each with their own strengths, can effectively work across borders, languages, and cultures to accelerate progress together.
In the forthcoming publication Reinventing Fire: China, we show how China can grow its economy while making an aggressive transition to a low-carbon society. The high-level conclusions are inspiring and exciting, showing how China can:
- Cut the use of coal: In 2050, China could use 60 percent less coal than it did in 2010.
- Dramatically increase the use of nonfossil energy: In 2050, non-emitting electricity sources could generate 82 percent of China’s electricity needs.
- Limit 2050 energy use to 2010 levels: By 2050, China could use approximately the same amount of energy it did in 2010 (but with significantly more renewable power) and still grow its economy 600 percent over that timeframe, providing a better standard of living for its people.
- Decouple economic growth from carbon emissions: Carbon emissions could peak in 2025 — far more quickly than a business-as-usual scenario — and carbon intensity (carbon emissions per unit of GDP) could drop 93 percent by 2050, compared with 2005 levels.
- Achieve these results and realize a net savings: China could save $3.3 trillion by following the path laid out in Reinventing Fire: China.
What’s more, the research has already informed the bilateral agreements announced by President Xi Jinping and President Barack Obama in November 2014 and March 2015; contributed to China’s planning process in the lead up to the Paris Agreement; and provided key insights to the energy authors of China’s 13th Five-Year Plan, which guides the country’s social and economic development.
Our partnership with ERI, LBNL, and Energy Foundation China will continue after we publish Reinventing Fire: China. All four organizations are already taking the findings beyond the pages and helping to realize them through national, provincial, city-level, and pilot projects. RMI now has our sights set on driving deeper and faster impact, continuing our existing partnership and forging new ones.
One way we’re expanding our involvement in China beyond the Reinventing Fire project is through our work with the Alliance of Peaking Pioneer Cities (APPC), which we’ve supported since its founding at the 2015 U.S.–China Climate Leaders Summit. The APPC is a group of Chinese cities and provinces committed to peak carbon emissions earlier than the national goal of 2030. “Chinese cities are where many of the policies and strategies need to be implemented to peak carbon emissions and transition to renewable energy,” says Li Ting, a principal with RMI and head of the Beijing office. “Successfully achieving China’s national goals requires urgent city leadership.”
Indeed, China is rapidly urbanizing. Less than a decade ago, more than half of the population was rural. By 2030, more than 70 percent of the population will live in cities. With support from the national government, the APPC is shepherding 23 cities to peak carbon emissions early and low by providing technical support and resources. Under the leadership of China’s National Development and Reform Commission, the APPC expects its membership to reach 100 cities in the near future.
“RMI is excited to support the APPC in finding ways to peak its member cities’ carbon emissions faster and lower, and in finding ways to scale what is learned rapidly to other cities,” says Li. This spring, RMI teamed with the APPC to share the progress that pioneering cities have already made on peaking plans and how other cities can replicate successful programs. The results of that work were published at the second U.S.–China Climate Leaders Summit held in Beijing in June.
But understanding what cities have done is not enough — cities need help developing and implementing emission peaking plans. That is why RMI brought together more than 20 other nonprofits, government bodies, universities, think tanks, and institutions to organize the best work already done on this topic. RMI is now working with the APPC to draft a comprehensive emissions peaking handbook that any Chinese city can use. The handbook will be released late this fall, but the collaborative team is already working closely with cities to ensure that it meets their needs. These efforts are all aimed at one goal: help the APPC orchestrate activity to ensure cities curb emissions faster and more aggressively than otherwise possible. RMI will continue to work with the APPC to establish standard interventions and tools, help share and institutionalize successes from both sides of the Pacific, and help cities track progress.
In another city-focused project, earlier this year RMI teamed with LBNL and Energy Foundation to conduct a peaking analysis for Wuhan, an industrial city of 8.3 million people 500 miles west of Shanghai. With LBNL’s modeling expertise, RMI’s focus on economics, Energy Foundation’s policy experience, and other local expertise, the team helped identify targets and program priorities to shift Wuhan toward a cleaner energy profile. By continuing to develop progressive pilot projects such as this one, and working closely with private sector partners, RMI is helping to demonstrate clear cases for how China can leverage business to tackle climate change. This is just the first step in an ongoing collaboration with Wuhan and other cities.
TRANSFORMING POWER, TRUCKING
Cities are an important catalyst for change, but some problems are best tackled at the national or sector level. One of the biggest challenges China faces is decarbonizing its power supply. In fact, China’s power sector accounts for 10 percent of global emissions and 25 percent of global coal consumption. Entrenched interests and old dispatch models make incorporating renewable energy and utilizing innovative programs difficult.
RMI is working on bringing new models to China, including green dispatch, to shift the energy supply. Initial estimates show that even simple reforms in how China utilizes its generating fleet can save 10 percent of emissions today, resulting in almost 1 percent reduction in global emissions.
“RMI’s work to reform China’s power dispatch is one of the best opportunities to cut carbon emissions globally,” says Cyril Yee, an RMI principal. “By prioritizing its most efficient generating units and renewables, China can reduce global carbon emissions while saving billions of dollars. This does not require expensive capital investments, just regulatory and operational reforms.” But the government needs good counsel and support to realize its ambitions. RMI’s years of electricity reform experience can inform, align, and accelerate the actions that will capture the opportunity.
At the sector level, RMI has been working to improve efficiency in Chinese trucking and logistics. In April 2016, RMI held a two-day charrette in Shenzhen, which brought together more than 50 industry and government leaders from the sector to better understand and capture opportunities for reducing pollution and carbon emissions while saving money. From the solutions identified at the workshop, RMI is working with partners to develop a regional pilot freight program in Guangdong province with hopes to scale it nationally. This and other ideas from the charrette can help improve the efficiency of Chinese logistics markets and ultimately reduce costs, reduce carbon emissions, support sustainable economic growth, and improve public health and urban quality of life.
“Our Shenzhen transportation charrette brought together some of the most influential players from the transportation field in a way rarely done in China,” says Wang Zhe, an RMI associate. “Having such frank conversations about what is going right and wrong helps lay a foundation for building successful programs and strong partnerships.”
All of these cooperative efforts between the U.S. and China are just the beginning of the journey toward rewriting the global energy story. Reinventing Fire: China maps a path for one nation, yet Beijing’s work moving forward should help blaze the path for other developing economies, proving that clean energy can be a powerful instrument of economic growth. Together with our partners, RMI is proud to be a leader in the pursuit of this future reality.
For more information on this topic visit: rmi.org/reinventing_fire_ china