Global greenhouse pollution hit a new record and increased 1.1% last year, the International Energy Agency reported last week. That was almost entirely a China story.
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The data on carbon emissions in 2023 is only just in, but we can already predict where things will go this year. Global greenhouse pollution hit a new record and increased 1.1% last year, the International Energy Agency reported last week. That was almost entirely a China story. Had the country held its carbon budget steady — or reduced it, in the manner of fellow high-income countries whose pollution is now at a 50-year low — then the world’s climate footprint would have shrunk by about 155 million metric tons, instead of growing by 410 million tons. If you want to know how this year is shaping up, Beijing’s National People’s Congress provided a sneak peek. Its 5% growth target announced Tuesday doesn’t absolutely guarantee that global emissions will rise again in 2024. But it makes the path to avoiding that fate extraordinarily narrow. That’s because a country’s greenhouse footprint can be boiled down to three factors: its economic growth, the energy intensity of that growth, and the carbon intensity of that energy. On all three, China performs dismally outside the norm — and the dirigiste policymaking typified by the NPC is the major culprit. Bloomberg One way of looking at the nexus between pollution and economic growth is to ask how many tons of greenhouse gases it takes to produce a million dollars of economic output. Despite decades of gradual improvement, that figure is about 462 tons in China — close to double the 246 tons in the US and almost four times the 137 tons in the European Union. Some of that is just a matter of development. Though China is on the brink of rich-country levels of gross domestic product per person, it was a low-income nation just over a generation ago. Climbing the development ladder — with all the steel mills, cement plants, factories, roads, cars and airplanes it requires — consumes a lot of carbon. Even so, China’s figure is 60% more than the 284 tons in India, which is roughly the global average. It’s a clear outlier. Put those numbers together with the GDP growth target, and we can already see that a pollution peak won’t come this year unless China’s economy gets far more efficient at turning carbon into growth. Bloomberg Such a path seems unlikely. China doesn’t target its carbon intensity directly, but the closely related measure for energy intensity just got downgraded below what many analysts were expecting. After missing the government’s objective of a 2% improvement last year, the ambition for 2024 announced Tuesday is just 2.5% — significantly weaker than the 4% tightening that ANZ Group Holdings Ltd. had predicted. Some investors with memories of the 8.8% average GDP growth achieved since 1990 might regard Tuesday’s 5% GDP goal as a letdown. In truth, though, the government will have to press hard on the accelerator to grow so fast. The World Bank and Asian Development Bank had both forecast 4.5% for this year, while the International Monetary Fund expects an average 4% in the five years through 2027. Michael Pettis, a professor of finance at Peking University’s Guanghua School of Management, argues the rate should be between 2% and 3%. Those lower levels would be sufficient to bring China’s emissions to a peak, but it’s not going to happen at this year’s mandated pace of GDP growth. To achieve a decline, carbon efficiency would need to improve close to its fastest rate since President Xi Jinping came to power. Bloomberg Such a downbeat picture might seem surprising when set against the fact that China installed about three-fifths of all wind power and roughly the same share of solar globally last year. The clean energy generated by that equipment is a formidable brake on the country’s emissions — but it’s not strong enough to overcome the pull of the GDP growth target, especially not when the manufacture of metals and glass for all that new clean technology is a major contributor to China’s growing carbon footprint. The fundamental problem is one of economic structure. In most countries, especially relatively affluent ones like China, GDP growth precedes increased energy consumption. The government and central bank set the basic rules of supply and demand, economic activity responds organically, and energy consumption and a GDP number are the result. China appears to do things in the opposite fashion: The NPC sets a GDP and energy consumption goal, and provincial officials shape activity to produce the desired outcome. Polluting heavy industry is easy to control, so it’s relied on as a tool of demand management in the same way that other countries rely on central bank interest rates. Beijing’s most senior officials have set great store by their plans to make their country not just wealthy, but clean and sustainable — “building a Beautiful China” and encouraging “harmony between human and nature,” to quote official media’s characterization of Xi’s remarks at an internal conference last year. It looks increasingly likely it will fall well short of those ambitions, as the Centre for Research on Energy and Clean Air, a climate think tank, argued last month. Beijing’s insistence that it’s focused on achieving results around climate, while other governments make do with meaningless talk, looks more hollow with each passing year. A nation that can’t rein in its addiction to carbon can’t be trusted as a climate leader.