President Xi has made clear his intention to protect China’s environment from further degradation and make China an “ecological civilization” by 2049. His surprise pledge in September to achieve carbon neutrality, or net-zero carbon dioxide emissions, by 2060 and peak emissions by 2030 fits this narrative. In a speech before the UN, President Xi emphasized public health and global environmental stewardship as the driving forces behind China’s increasingly ambitious climate goals. However, the motivating factors for China’s carbon neutral pledge are actually much broader.
Reducing reliance on foreign energy
China satisfies roughly 25% of its energy needs with petroleum and natural gas, much of which travels through maritime chokepoints controlled by the US Navy. In the event of a conflict, the US could trigger an economic standstill in China and reduce the Chinese military to a paper tiger by simply blockading Chinese energy imports. Given the latent dangers posed by the current global energy order as well as rising tensions with the US, Chinese strategists have made energy security a top priority.
Premier Li Keqiang, who heads the national energy committee, told party leaders last month that “guaranteeing the nation’s energy supply is a long-term strategic task.” Like its counterparts in Europe and the US, China distrusts the current energy order and actively seeks energy independence. Although the current US administration supports growing liquified natural gas (LNG) exports to China, officials in Beijing are wary of a policy reversal given the administration’s history of erratic behavior. However, achieving energy security will require long-term planning on Beijing’s part as well as require it to address both demand-side and supply-side factors.
Just under 60% of China’s petroleum supply is consumed by the transportation sector. Were China to reduce the transportation sector’s total oil consumption to zero by 2060, it would more than halve its dependence on oil. To successfully complete this transition, China must draw the age of the combustion engine to a close and build the world’s largest EV market. Although it lacks hydrocarbon deposits on the scale of the US or neighboring Russia, China possesses an enormous potential for electricity generation. In other words, the asymmetrical distribution of energy resources necessitates technological leadership – particularly EV adoption on a massive scale – as well as a corresponding increase in power generation capacity to reduce China’s reliance on foreign energy.
Ultimately, the most important reforms that must occur for China to achieve energy security in line with its vision for an “ecological civilization” will be supply-side. Premier Li best expressed Beijing’s security-oriented pragmatism when he told party leaders last month that China must “strengthen domestic oil and gas exploration, deepen international oil and gas cooperation, as well as foster the development of renewable energy such as hydropower and wind power in order to further diversify the energy supply.” To this end, the construction of land-based oil pipelines connecting China with Russia and Iran offer the dual benefits of allowing Beijing to circumvent the US navy while diversifying its supply base. In a similar vein, the ongoing rapid expansion of China’s renewable power generation capacity offers China a secure alternative to the global energy order.
Only one piece of the puzzle
Geopolitical factors only offer a partial explanation of the forces driving China’s emerging energy strategy and its commitment to carbon neutrality by 2060. While it offers a compelling explanation for China’s transition to electrical power generation, it has little to say about the place of coal in the national energy mix, which is highly polluting but found in abundant quantities domestically. In such cases, other factors, such as public health concerns caused by dangerous levels of particulate matter, offer better explanations.
However, China’s top leaders have made clear in no uncertain terms that China’s energy strategy will incorporate high-level national security considerations that will sometimes conflict with its environmental agenda. As international competition between rising powers and established ones intensifies, these considerations will weigh heavily on China’s long march to sustainable energy generation.