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China may be entering “post-coal growth.” But don’t get too excited.

A coal barge along the Huangpu River.
A coal barge along the Huangpu River.
(Shutterstock)

Climate change is a wickedly complex problem. But if you had to isolate one factor as the key, the linchpin upon which any credible global solution must turn, it is this: coal in China.

Coal use has exploded in China over the last 30 years, especially the last 15. For any chance of success in avoiding the worst effects of climate change, the country must reverse that trend — peak and then rapidly reduce coal use, hitting zero as soon as practically possible, preferably some time around 2035 to 2050.

For that reason, China’s relationship to coal is a subject of great fascination and debate. A provocative contribution to that debate was published in the journal Nature Geoscience recently: "China’s Post-Coal Growth," by Ye Qi and Tong Wu of Beijing’s Tsinghua University and Nicholas Stern and Fergus Green of London’s Grantham Research Institute.

The paper makes a straightforward argument: Whereas expert consensus predicts that China’s coal use will peak between 2020 and 2040, it has in fact already peaked. In China, "economic growth has decoupled from growth in coal consumption."

This is not a new argument — see Joe Romm for an earlier version and Brad Plumer for an overview of the debate — but they sum it up with bracing clarity.

Let’s quickly walk through the argument.

The two big reasons China is turning away from coal for good

Since the turn of the century, China’s economy has expanded at an absolutely insane pace, often exceeding double-digit growth. It’s an economic miracle that has lifted untold millions of people out of poverty.

coking
Making steel in China.
Shutterstock

But China fueled its miracle with coal, just as developed countries did before it. Coal provided about 75 percent of the total energy China consumed as it grew over the last 35 years. Between 2000 and 2013, annual coal consumption went from 1.36 billion tons to over 4.24 billion — an average annual growth rate of 12 percent. Bonkers.

But things are changing, Qi and his colleagues write: "China’s coal use dropped to 4.12 billion tons, a decrease of 2.9%, in 2014, with another 3.6% decrease in 2015, all while gross domestic product (GDP) continued to grow by 7.3% and 6.9% respectively."

At least for now, coal use seems to be edging down, even as GDP is still rising, albeit more slowly. That is significant. (Note: it is always best to approach official Chinese energy statistics with some caution and skepticism; see here.)

The question is whether it will last, whether it’s a temporary state of affairs or a turning point in China’s long-term trajectory. Qi and colleagues offer two reasons to think it is the latter.

1) China’s economy is shifting from heavy industry to services.

China has grown by building stuff. Between 1991 and 2010, manufacturing and construction in China grew at an average rate of 12.6 percent and "formed the engine of China’s economic ascendency," the authors write.

But manufacturing and construction are taking a beating right now. Some of it traces to the financial crisis, but most, the authors argue, reflects a longer term trend in the Chinese economy.

For years, China was known for cheap labor. But as more people join the middle class, labor is getting more expensive. The heated pace of building is slowing. A service sector is rising, devoted to the quality of life of the newly affluent.

A shopping mall in Chnegdu, China.
A shopping mall in Chnegdu, China.
(Shutterstock)

This has manifested in slower growth — the overall growth rate is down to 6.9 percent, the lowest since 1991 — and less coal use, since manufacturing and construction account for the lion’s share of coal consumption in China. The service sector is only about a quarter as energy-intensive.

There’s no sign that this trend will slow or reverse. Moreover, it reflects the explicit intentions of Chinese policymakers. Which bring us to…

2) Chinese leaders are deliberately engineering a shift to cleaner energy.

Another reason Qi and colleagues say the decline in coal is likely to continue is that the Chinese government wants it to. It needs to address the horrible air pollution in China’s cities and the poisoning of the country’s rivers; it needs to show that it can meet its international climate commitments. Both are matters of political legitimacy.

So the government has set limits on a range of local pollutants like SO2 and NOx and set targets for reductions in energy intensity and carbon intensity. It has also put a hard cap on total coal consumption in 10 eastern provinces.

"The government’s recent Energy Development Strategic Action Plan," Qi and colleagues write, "explicitly outlines the progressive substitution of coal with clean energy: by 2020 coal’s share of the energy mix will decrease from 66% to less than 62%, and non-fossil fuels will rise from 11% to a minimum of 15%."

While renewable energy investment plateaus or declines in other countries, it is rising in China, which is now responsible for a third of all global clean energy investment.

renewable energy investment around the world (REN21)

Whether or not China’s coal peak has passed, there’s no question that reducing coal is part of an intentional, multifaceted government effort.

China may be over the coal hump, but the world isn’t

The authors emphasize that China driving its development with coal is not unique. Developed countries largely did the same. The arc is similar: Coal drives early development but eventually begins declining, even as GDP continues rising. Coal and GDP decouple.

The UK and the US, for instance, have both seen coal peak and begin declining, even as GDP continues to rise. For the UK it happened in 1956, for the US, 2007. (That’s per-capita GDP on the horizontal axis, coal consumption on the vertical.)

coal + development (Nature Geoscience)

China, they say, has now reached this same inflection point.

Notably, China has done it at a much lower absolute level of development than the UK or the US did it. If China truly reached peak coal in 2013, it did so at a level of per capita GDP 10 percent less than the UK’s at peak coal, and a quarter less than the US’s at peak coal.

"These are admittedly rough indicators," Qi and colleagues write, "but taking into account the intensity of China’s catch-up industrialization, its much larger demographic scale, and the vast share of its energy endowment taken up by coal (especially compared with the United States, where large, accessible stocks of natural gas are being utilized), the speed of its peaking and the shift towards non-fossil fuel energy, is noteworthy."

Noteworthy indeed. "It also," they write, "suggests the efficacy of China’s policymaking."

Where the UK and the US decoupled economic growth from coal gradually over time, China is doing it intentionally, and quickly. While China will be a major coal consumer for many years to come (it still represents almost 50 percent of global demand), it has, if Qi and his colleagues are correct, passed a fateful historical inflection point.

Nonetheless, in their conclusion, they get out a little over their skis:

As the world’s largest emitter of greenhouse gases, a peak in China’s coal consumption is not only a necessary condition for a global peak, but may well be an important milestone in the Anthropocene and a turning point in international efforts to mitigate the emissions of climate-altering greenhouse gases.

Eh, maybe. But let's keep two important caveats in mind:

First, hitting the world’s climate target — no more than 2 degrees rise in average global temperature — doesn’t just require a peak in coal, it requires the elimination of coal. China has only just begun. (See here for a grim take on whether the 2 degree target is still achievable.)

PWC 2 degrees (PriceWaterhouseCoopers)

Second, as Brad Plumer has written, there are hundreds of coal plants planned across the world, more than enough to push us past 2 degrees. Many are planned in China, which is building cleaner plants to replace dirty plants and … well, no one’s quite sure why they’re building so many, since they are already over capacity. (See Brad’s story for details.)

Many more are planned for India, Vietnam, and other Southeast Asian countries that are not as far along the development arc as China. It won’t do much good if coal follows heavy industry to new cheap labor markets and goes right on burning.

In short, coal use around the world remains an enormous threat our global future. China’s progress offers a glimmer of hope, but it will prove a turning point only if the scale of global ambition rises rapidly and steadily from here on out.

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