China’s not-so-ambitious ‘carbon intensity’ goal

It made headlines around the world last week when China purportedly announced a historic commitment to reduce its “carbon intensity” – the greenhouse gases it emits per unit of GDP. “China unveiled firm targets,” The Guardian said, “for controlling the world’s biggest carbon footprint for the first time.” Al Jazeera news network called China’s announcement “ambitious” and described it as a precedent-setting breakthrough in which the country “set specific targets for cutting carbon emissions.”

China did, in fact, make an announcement last week: It said it will seek to reduce its carbon intensity by 40 per cent by 2020. It did not say that it will seek to reduce carbon emissions – a different thing altogether. The commitment it did make was not a “first” for the world’s largest emitter of carbon. It extended the goal that China first set in 2005 – when it said that it would reduce carbon intensity by 20 per cent by 2010. Last week, China extended this goal for another 10 years.

The earlier commitment required an average reduction in carbon intensity of 4 per cent a year. In 2006, China posted a reduction of 1.2 per cent; in 2007, a reduction of 3 per cent. With a fast-expanding economy, in other words, China failed to meet its goal, achieving an average reduction of 2.1 per cent – or half of the reduction needed to meet its objective. For 2008 and 2009, with market meltdown and global recession, China easily exceeded its goal. Recessions do impose restraint.

Thus China, no matter how inadvertently, “made” its 2010 goal. How much of a stretch will it take for China to meet its 2020 goal? Not much more. The first half of the goal will be more or less effortless – the result of the usual increase in energy efficiency that takes place, without much government assistance, in industries that invest in advanced technologies. In the United States, for example, carbon intensity declined (on average) by 1.9 per cent a year from 1990 through 2008 – almost precisely the rate by which China’s carbon density fell in the first two years of its 2005 objective.

Declines in carbon intensity are alternatively expressed as increases in efficiency. It is this increase in efficiency, for example, that explains away the mythology that the United States emits a disproportionately large amount of the world’s GHG emissions.

In 2008, as calculated by the San Francisco-based Pacific Research Institute, the U.S. accounted for 30 per cent of the goods and services produced in the entire world – yet emitted only 19 per cent of the world’s GHG emissions. Based on the production of things – which is what economies are all about – the United States emits less than its fair share.

China is a long way behind in economic efficiency. In 2005, when it adopted its first carbon-intensity goal, China needed 35,766 British thermal units to produce one (U.S.) dollar of GDP. In the same year, the United States needed 9,113 BTUs, Britain needed 6,145 BTUs and Japan needed 4,519 BTUs. You can’t directly compare energy efficiency, country to country, with these GDP-based measurements. Each country has its own eccentricities. By the formula commonly used, Italy and Bangladesh are two of the most energy-efficient countries on Earth – Italy because its high gasoline prices encourage frugal use of fossil fuels and Bangladesh because it doesn’t have as many motors to run as other economies. But these measurements can track relative progress.

The more serious error in the global reporting of China’s revised carbon-intensity goal was the apparently contagious insistence that China had promised to reduce emissions in absolute terms. Al Jazeera, for instance, cited China’s target “for cutting carbon emissions.” Even the Paris-based International Energy Agency (IEA), an authoritative source, made the same error – perhaps (so egregious the mistake) consciously.

“The IEA welcomes the announcements by the U.S. and Chinese governments,” the agency said, “to cut greenhouse gas emissions.” The agency repeats this error when it discusses emission cutbacks that it expects countries to make. Using its “most probable” scenario, the IEA said that the OECD would reduce carbon dioxide emissions by 1.6 GtC (gigatonnes of carbon) by 2020; China, by 1 GtC. (A gigatonne is a billion tonnes.) In fact, of course, China will merely reduce the rate of increase of its emissions.

Elsewhere, the IEA is more candid. In its World Energy Outlook 2009, for example, it calculates that China’s carbon-dioxide emissions could reach 9.6 GtC by 2020, up from 6.1 GtC in 2007. China’s GDP could rise by a higher percentage (to $18.8-trillion from $7.6-trillion). This means that China’s carbon intensity would decline even as it emitted an additional three billion tonnes of carbon dioxide emissions by 2020 – but, among friends, they won’t necessarily count.

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Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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