BROWN TO GREEN - Climate Transparency

1 1 CHINA Country Facts 2017 BROWN TO GREEN : THE G20 TRANSITION TO A LOW-CARBON ECONOMY | 2017 CLIMATEACTIONTRACKERG20 averageG20 average18,373 NOTRE DAME GLOBAL ADAPTATION INITIATIVE (ND-GAIN) INDEX SubindexAIR POLLUTION INDEX5 (PM )10 g/m WHObenchmark 57 g/m CHINAGDP PER CAPITA2 ($ (const. 2011, international))13,584 ChinaSource: WB databank, DEVELOPMENT INDEX1 Source: UNDP, GDPSHARE OF GLOBAL GDP216 %Source: WB databank, 2017 ChinaGHG EMISSIONS PER CAPITA3 (tCO2 e/cap)G20 : PRIMAP-hist, 2017 SHARE OF GLOBAL GHG EMISSIONS3 China25%Source: PRIMAP-hist, 2017 Source: WB databank, 2017 Source: ND-GAIN, 2015 This Country Profile assesses China spast, present - and indications offuture - performance towards alow-carbon economy by evaluatingemissions, Climate policy performance, Climate finance and profile summarises the findingsof several studies by country profile is part of the BROWN to GREEN 2017 report.

2 The full report and other G20 country profiles can be downloaded at: g20- Climate -performance/g20report2017 BROWN TO GREENThe G20 transition to a low-carbon economy | 2017 BROWN TO GREEN : THE G20 TRANSITION TO A LOW-CARBON ECONOMY | 2017 CHINA Country Facts 20172 CHINACCPI PERFORMANCE RATING OF GHG EMISSIONS PER CAPITA720,00016,00012,0009,0006,0003,000 0 Total emissions across sectors (MtCO2e/year)199019952000200520102015202 020252030 WasteOther emissionsAgricultureIndustrial processesEnergy Projected emissions(excl. LULUCF*)LULUCF*Recent developments (2009-2014) Current level (2014) Current level compared to a well below 2 C pathwayvery low lowmediumhighvery highGREENHOUSE GAS (GHG) EMISSIONS DEVELOPMENTThe massive growth in China s overall GHG emissions throughout the past decade has significantly slowed down since 2011, although still increasing at an average rate of 2% between 2012 and : CCPI 2017 G20 EditionCONTENT n GREENHOUSE GAS (GHG) EMISSIONS DEVELOPMENT.

3 2n Climate POLICY PERFORMANCE ..3 POLICY EVALUATION ..3 CCPI EXPERTS POLICY EVALUATION ..3 REGULATORY INDICATORS FOR SUSTAINABLE ENERGY (RISE) INDEX ..3 COMPATIBILITY OF Climate TARGETS WITH A 2 C SCENARIO ..4n FINANCING THE TRANSITION ..4 INVESTMENTS ..4 Investment attractiveness ..4 GREEN Bonds ..5 Emissions of new investments in the power sector ..5 FISCAL POLICIES ..5 Fossil fuel subsidies (for production and consumption) ..5 Effective carbon rate ..5 PROVISION OF INTERNATIONAL PUBLIC SUPPORT ..6 Pledge to the GREEN Climate Fund (GCF) ..6 Contributions through the major multilateral Climate funds ..6 Bilateral Climate finance contributions ..6 Climate finance contributions through.

4 6 Multilateral Development Banks (MDBs) ..6 Future Climate finance commitments ..6n DECARBONISATION ..7 SECTOR-SPECIFIC INDICATORS ..7 ENERGY MIX ..8 SHARE OF COAL IN ENERGY SUPPLY ..8 SHARE OF RENEWABLES IN ENERGY SUPPLY ..8 ENERGY USE PER CAPITA ..9 ENERGY INTENSITY OF THE ECONOMY ..9 CARBON INTENSITY OF THE ENERGY SECTOR ..10 Annex ..11*Land Use, Land Use Change and Forestry emissions according to the Climate Action TrackerSource: PRIMAP, 2017; CAT, 2017 BROWN TO GREEN : THE G20 TRANSITION TO A LOW-CARBON ECONOMY | 2017 CHINA Country Facts 20173 CHINACLIMATE POLICY PERFORMANCE lowmediumhighLong term low emissions development strategyaGHG emissions target for 2050 Renewable energy in power sectorbCoal phase-outcEfficient light duty vehicles Efficient residential buildingsEnergy efficiency in industry sectorReducing deforestationdPOLICY EVALUATION8a) China has recently developed a long-term strategy.

5 However, it has not yet made it publicly available and/or submitted it to the UNFCCC. b) Share of renewables in the power sector (2014): 23% c) Share of coal in total primary energy supply (2014): 67%d) Forest area compared to 1990 levels (2014): 132% Source: own evaluationSource: CCPI 2017 G20 EditionCCPI EXPERTS POLICY EVALUATION9very highhighmediumlowvery lowCCPI 2008 CCPI 2009 CCPI 2010 CCPI 2011 CCPI 2012 CCPI 2013 CCPI 2014 CCPI 2015 CCPI 2016 CCPI 2017 CCPI EVALUATION OF Climate POLICY (2017)Evaluation of international Climate policy Evaluation of national Climate policyvery lowlowmediumhighvery highClimate Transparency evaluates sectoral policies and rates them whether they are in line with the Paris Agreement temperature goal.

6 For more detail, see experts accept that China s renewable energy policies would meet its goal of a 20% share of renewables in total primary energy supply. They are positive at the prospect of CO2 emissions peaking before 2030, earlier than planned, and in line with China s mitigation targets, but some argue the targets could be more ambitious. They also recognise China s constructive role in global Climate diplomacy. Overall policy performance Source: RISE index, 2017 REGULATORY INDICATORS FOR SUSTAINABLE ENERGY (RISE) INDEX0-33 34-66 67-100 RISE scores reflect a snapshot of a country s policies and regulations in the energy sector. Here Climate Transparency shows the RISE eva-luation for Renewable Energy and Energy EFFICIENCY 69 RENEWABLE ENERGY 74 BROWN TO GREEN : THE G20 TRANSITION TO A LOW-CARBON ECONOMY | 2017 CHINA Country Facts 20174 CHINACHINACOMPATIBILITY OF Climate TARGETS WITH A 2 C SCENARIO10 Climate ACTION TRACKER EVALUATION OF NATIONAL PLEDGES, TARGETS AND NDC10inadequatemedium sufficientrole modelThe latest Climate Action Tracker (CAT ) assessment shows that China s CO2 emissions may have already peaked, more than a decade ahead of its Paris Agreement pledge to peak CO2 emissions before 2030.

7 The reduction in coal use for the third consecutive year has had a major impact. In general, China s policies and actions are set to overachieve the CO2 goal in its Nationally Determined Contribution (NDC), and its national targets. The NDC itself is not enough to limit warming to below 2 C, let alone the Paris Agreement s C limit, unless other countries make much deeper reductions and comparably greater effort than China, which is why the CAT rates it medium .16,00014,00012,00010,0008,0006,0004,000 2,00001990199520002005201020152020202520 30 Historical emissions (excl. LULUCF*)Max. emissions level undermitigation targetsMin. emissions level undermitigation targetsEmissions projections (excl.)

8 LULUCF*)MtCO2e/yearClimate Action Tracker's mediumto sufficient 2 C emissions range* Land Use, Land Use Change and ForestryCLIMATE POLICY PERFORMANCE Source: CAT, 2017 Source: CAT, 2017 FINANCING THE TRANSITION INVESTMENTSn INVESTMENT ATTRACTIVENESS China ranks 1st and 4th in the latest RECAI and Allianz Monitor editions for investments attractiveness, respectively. China has ambitious plans to scale up renewables and has achieved record-high installations rates in recent years. RENEWABLE ENERGY COUNTRY ATTRACTIVENESS INDEX (RECAI) 12 low medium high ALLIANZ Climate AND ENERGY MONITOR11 very low low medium high very highTREND Source : Allianz, 2017; EY, 2017 Source : Climate Bonds Initiative, 2017G20 average: BROWN TO GREEN : THE G20 TRANSITION TO A LOW-CARBON ECONOMY | 2017 CHINA Country Facts 20175n 17 CHINAFINANCING THE TRANSITION FISCAL POLICIESn EMISSIONS OF NEW INVESTMENTS IN THE POWER SECTOR This indicator shows the emissions per MWh coming from newly-installed capacity in 2016.

9 The smaller the value, the more decarbonised the new installed FOSSIL FUEL SUBSIDIES (FOR PRODUCTION AND CONSUMPTION)14 State-owned coal dominates energy production, receiving tax exemptions for production, direct budgetary spending, R&D to enhance fossil fuel production, and import duty waivers for equipment. In 2014, budgetary support production and consumption of fossil fuels neared US$ 31 billion, while tax breaks neared US$ 4 billion. Policies to cap coal use, peak emissions and increase the non-fossil fuel share, have emerged from air pollution concerns. 35 billion US$2014 Source: Calculations done by ODI based on OECD inventory, 2017G20 total: 230 billion US$2014 Source: calculations done by IDDRI for Climate Transparency , tCO2/MWh n GREEN BONDS GREEN bonds are bonds that earmark proceeds for Climate or environmental projects and have been labelled as GREEN by the : calculations done by Climate Bonds Initiative for Climate Transparency , 2017 TOTAL VALUE OF GREEN BONDS billion US$2017 GREEN BONDS AS SHARE OF OVERALL DEBT average: n EFFECTIVE CARBON RATE16 Specific taxes on energy use dominate carbon rates, but five municipalities and two provinces have emissions trading systems.

10 In 2012, 18% of carbon emissions from energy use were priced and 8% priced above 30/tCO2 (~US$ 37). Most priced emissions came from the road sector, while industry, the residential and commercial and electricity sectors accounted for most unpriced emissions. China plans to implement a national Emissions Trading System in 2017, in addition to pilot ETSs put in place in several regions in recent US$/tCO2 Source: OECD, 2016 EFFECTIVE CARBON RATE IN 201217for non-road energy,excluding biomassemissions BROWN TO GREEN : THE G20 TRANSITION TO A LOW-CARBON ECONOMY | 2017 CHINA Country Facts 20176 CHINAPROVISION OF INTERNATIONAL PUBLIC SUPPORT China is not listed in Annex II of the UNFCCC, and it is therefore not formally obliged to provide Climate finance.