During the 75th United Nations General Assembly held on September 22, 2020, President Xi Jinping announced that China will peak carbon emissions by 2030 and strive to realize carbon neutrality by 2060. These ambitious goals, which go beyond China’s existing commitments under the Paris Agreement, demonstrate China’s willingness to lead the world in a green and low-carbon transformation.

“This is an historic milestone with rich and profound meaning.” said ZOU Ji, CEO and President of Energy Foundation China. “Among the major emitters, China is the first developing country to set a deadline for realizing carbon neutrality. Over time, it will trigger a series of historical changes and redefine China’s role on the global stage.”

China’s latest climate action targets represent a fundamental step toward achieving the objectives of the Paris Agreement. Reaching these goals will bring profound impacts on China and even the world from the aspects of economy, energy, and environment.

First of all, advancing toward the targets will offer new momentum for China’s economic development and further promote the adjustment of China’s economic structure. This will transform the structure and whole picture of various industries, drive new investments, and create new job opportunities. However, it is important to recognize that there will be struggles from time-to-time in this process, so the transition needs to be conducted in an orderly fashion step-by-step and in a just and fair way.

Second, the goals will further drive China’s energy revolution. Currently, China’s non-fossil energy share is about 15%. Energy Foundation China estimates that, to achieve its climate action goals, China’s proportion of non-fossil energy needs to increase to 25% by 2030 and to over 80% by 2050. To realize deep decarbonization of the energy economy, China must speed up decreasing the share of coal in the energy mix over the next 10 to 30 years, significantly enhance the energy efficiency of all industries, and improve the electrification level across the board.

In addition, because a high proportion of China’s emissions of greenhouse gases and air pollution come from fossil energy, China’s air quality will be further improved as carbon is reduced. According to Energy Foundation China, together with deep decarbonization, China’s air quality can reach global best practice by 2050, namely annual average PM2.5 level lower than the WHO guideline value of 10 µg/m³, and ozone level lower than the WHO guideline value of 100 µg/m³.

The first step on the roadmap to realizing China’s long-term climate vision is the 14th Five-Year Plan (2021-2025). At the beginning of its new journey of modernization, China should set up ambitious goals for the 14th Five-Year Plan, so as to lay a solid foundation for the goal of peaking carbon emissions by 2030 and achieving carbon neutrality before 2060. It is necessary to speed up the formulation of detailed national and local plans for peaking emissions; in particular, a number of developed provinces and cities should be encouraged to take the lead in peaking carbon emissions during the 14th Five-Year Plan period, creating conditions for the national achievement of peaking before 2030. At the same time, the developed provinces and cities should also establish long-term visions and roadmaps for carbon neutrality, paving the way for the national achievement of carbon neutrality before 2060.

As President Xi said at the United Nations General Assembly, each country should seize the historic opportunity brought by a new round of technological revolution and industrial transformation to promote “green recovery” of the world economy after the Covid-19 pandemic. Energy Foundation China recommends China to fully realize low carbon in such key investment fields as digital economy, energy infrastructure, and new urbanization during the 14th Five-Year Plan period, and vigorously promote low-carbon consumption. At the same time, the construction of the carbon market should be continuously promoted, with carbon reduction goal decomposed directly to the main market players, including enterprises, residents, and local governments. In parallel, the carbon market should be combined closely with green finance to establish synergistic ties among China’s technology, carbon, and capital markets.

As the world’s second largest economic entity, the largest exporter, and the largest energy consumer, China plays an important role in the global green and low-carbon transformation. Led by the new climate action targets, the success of China’s low-carbon economy transition will not only make outstanding contributions to the goal of limiting the global temperature rise to less than 2 °C, or even better within 1.5 °C, but also become a powerful force for sustainable development globally due to the size of China’s market and China’s practical experience and wisdom. Energy Foundation China will, as always, do everything it can to support China’s ambitious and far-sighted actions of low-carbon transition, and to advance this great and formidable task both in China and around the world.