Hello again, Global Impact readers,
China’s goal of becoming carbon neutral by 2060 already seemed ambitious when President Xi Jinping told the United Nations General Assembly in September 2020 that China would scale up its voluntary emissions targets, hit peak emissions before 2030, and achieve carbon neutrality before 2060.
Fast forward a year, and China is plagued by its worst electricity curbs in its history.
The cuts also came at the same time as the topic of World News Day this week was, yes you guessed it, “The Climate Crisis”.
Eugene Tang, the SCMP’s business editor, looks at how the shortages are impacting China, and what caused them.
Production Editor, Political Economy
The power of climate change
Tuesday marked the fourth annual World News Day, a global campaign to support journalists and highlight the value of fact-based journalism in making the world a better place.
This year, World News Day focused on journalism’s critical role in providing trustworthy information about an urgent issue that will define our lifetime – climate change.
At the same time, the true impact of the extent of the power crisis in China was emerging, with Beijing’s push to be carbon neutral by 2060 partly blamed for nationwide power cuts across businesses and homes.
While China is used to seeing power supply cuts in parts of the country each year, their frequency has increased sharply since the second half of last year and has spread from only usually targeting the industrial sector to now also affecting households.
China’s aim to be carbon neutral by 2060 is an ambitious target, and this seems to have contributed to some 20 of the 31 mainland provincial-level jurisdictions having to introduce electricity-rationing measures since mid-September.
Provinces are seemingly trying to scramble to meet hard end-of-year emissions targets, having seemingly paid little attention to the softer midyear goals, and in some cases have switched off traffic lights, while manufacturers have been forced to upend their working hours and force staff to work overnight when high-energy consumption including air conditioning is not needed.
Production has been heavily impacted with factories forced to turn off machines, with some even frantically replacing their machines with new ones that consume less power. Early signs of this were seen in Chinese economic data released on Thursday, although the true impact will not be seen until later this month when knock on effects are felt.
The price of the heavily polluting coal that has created much of the pollution issues also shoulder some of the blame, with the power stations that need to burn the fossil fuel facing significant losses as they have their hands tied when it comes to pricing.
Power plants are only officially allowed to raise electricity prices by 10 per cent, but in most cases this would conflict with Beijing's state-controlled electricity network. Even if they did, coal is costing as much as 40 per cent more than it was early this year, so businesses who are in the power game to turn a profit, simply see its model as unprofitable with no financial support from the government to make up the difference.
How about using solar power instead? Sorry, no, China dominates global solar production. The solar panel supply chain was already under pressure after the US blocked some imports from China over alleged links to forced labour in Xinjiang.
Taiwan has already put its hand up ready to take up any slack the China manufacturing machine cannot meet, according to comments from the island’s central bank governor which could be read as a genuine offer to firms seeking to find a new source for their export orders, but also a chance to fire a verbal shot across Beijing’s bow.
But it's also not just China that’s having problems. Europe’s going through an energy crunch of its own with electricity prices at record highs and fears across the continent that they also may have to shut factories to keep the heating on in people’s homes. The cost of coal across the world has soared, and as long as power is still coal-driven, the entire power game remains on tenterhooks.
There is also the fuel shortage in Britain, which will host the global climate summit COP26 in Scotland at the start of November. The European Union is also beginning to put its Green Deal into action.
In just over a week, global leaders will virtually attend a UN environmental conference in the Chinese city of Kunming, and all eyes will be on host China and Xi’s government to show it is sticking to emissions and energy efficiency targets.