ChinaFAQs: China's Energy and Carbon Emissions Outlook to 2050

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ChinaFAQs_China's_Energy_and_Carbon_Emissions_Outlook_2050.pdf

Key Points

• A new study by Lawrence Berkeley National Laboratory finds that, with a continuation of current policies, China’s energy consumption will reach a plateau before 2040 (95% of plateau level by 2030 or 2035) and its CO2 emissions will peak around 2030.
• Many sectors will “saturate” as China reaches its maximum amounts of residential and commercial floor area, roadways, railways, appliances per household, and associated energy-intensive structural materials (iron and steel; cement) in the time period between 2030 and 2035. The result will be the slowing of energy demand growth as it becomes driven by replacement needs instead of new demand in the market.
• The report suggests that, by continuing to strengthen the implementation of its energy efficiency policies and programs, to provide incentives to switch to less energy-intensive industries and less carbon-intensive energy supply technologies, and to innovate to improve and expand financial incentive mechanisms, China will be able to meet its goal of reducing CO2 emissions intensity by 40% to 45% below 2005 levels by 2020 as announced in the Copenhagen Accords.

China’s emissions of greenhouse gases will likely peak by 2030 – and its energy use will approach a plateau by 2030 to 2035 (95% of plateau level) if the country continues its current efforts to improve economic and energy efficiency and increase deployment of non-fossil energy technologies, according to a comprehensive new analysis.* The results challenge the “common belief that China’s CO2 emissions will continue to grow throughout this century,” write the authors of the study at the U.S. Department of Energy’s Lawrence Berkeley National Laboratory (LBNL) China Energy Group.

“We believe indefinite growth of energy demand in China is very unlikely to happen,” LBNL China Energy Group Director and study co-author Mark Levine, says, “for the following reasons: appliances, residential and commercial floor area, roadways, railways, iron and steel production, cement production, fertilizer use and other key energy drivers will saturate in the 2030 time frame; urban growth will begin to slow down after 2030 or 2035; exports from energy intensive industries will decline; and total population will peak before 2030 and then slowly decline.” The analysis also demonstrates that it is possible for China to meet its goal of reducing its “carbon intensity” – the amount of carbon released per unit of economic output – by 40% to 45% below 2005 levels by 2020, as outlined in the 2009 Copenhagen Accord and 2010 Cancun Agreements. However, this will require China to continue to strengthen the implementation of its energy efficiency policies and programs, to provide incentives to switch to less energy-intensive industries and less carbon-intensive energy supply technologies, and to innovate to improve and expand financial incentive mechanisms.

Background

Most past forecasts of China’s energy use and emissions “have relied on aggregate data and regression analyses to develop long-term scenarios,” the authors note. But the long-term scenarios typically haven’t accounted for technological trends and market dynamics that can vastly reshape how people and institutions (including enterprises) purchase energy-using equipment, manufacture energy-intensive products, import and export such products, and use energy. For example, at some point, the sales of new energy-consuming cars and appliances to China’s increasingly affluent consumers will reach a plateau, as the market becomes “saturated,” and demand increasingly becomes driven by replacement needs rather than new users. At the same time, new technologies and policies are expected to shift how China produces and uses energy. In a bid to better account for these complex “drivers,” the LBNL team turned to its “China End-Use Energy Model”– a sophisticated computer model of China’s energy system that reflects years of work by the team. Using this model, the team created two scenarios for China’s energy use and greenhouse emissions through 2050:

1. A “baseline” Continued Improvement Scenario (CIS) assumed that current technologies will continue to become more energy efficient, that increase in deployment of non-fossil energy sources will continue, and that the Chinese economy will continue to lower its energy intensity (using less energy to produce one unit of economic output).
2. An Accelerated Improvement Scenario (AIS) assumed that China takes “a much more aggressive” approach to improving energy efficiency and reducing emissions – for instance by ramping up alternative energy sources and requiring energy users to adopt the “best currently available products and processes in the short- to medium-term.” The AIS also has a place for a modest evolution to low-energy lifestyles.

Results

Overall, the scenarios suggest that a variety of factors – saturation of products composed of energy-intensive materials, reduced export of energy-intensive materials, declining growth of cities, and peaking population – can be expected to cause China’s energy use and emissions to level off within the next few decades. For example:

• Primary Energy Consumption: Under the CIS and AIS scenarios, primary energy consumption will approach a plateau between 2030 and 2035 (see Figure 1). Under CIS, energy demand grows from 2,250 million tonnes of coal equivalent (Mtce) to 5,500 Mtce in 2050. Under AIS, that figure drops by 900 Mtce to 4600 Mtce in 2050, a savings of 26 billion tonnes of coal equivalent from 2005 to 2050.
• Emissions: CO2 emissions reach a peak of 12 billion tonnes in 2033 under CIS. Under AIS, emissions reach a peak of 9.7 billion tonnes in 2027 (see Figure 2).
• Carbon Intensity: Both the CIS and AIS scenarios suggest that a 40% to 45% carbon intensity reduction by 2020 announced at Copenhagen in 2009 is a reasonable goal. Achieving this goal will, however, require strengthening or expanding energy efficiency policies in industry, buildings, appliances, and motor vehicles, as well as further expanding renewable and nuclear power capacity. Other significant findings include:
• The potential for reducing future energy demand is greatest in China’s industry sector in the shorter term, and in the buildings sector in the longer run.
• The share of China’s power that comes from burning coal will decline from 74% in 2005 to about 47% by 2050 under CIS, and to 30% under AIS. Coal demand under CIS reaches a peak in a time frame near 2030 at a level of 3,000 Mtce, much lower than many other analyses using different types of models have suggested.
• Most of a forecast increase in crude oil demand is driven by a burgeoning transport sector, which will account for 66% of China’s oil demand in 2050 under CIS. This is comparable to the current U.S. transport share of 69%.
• Saturation effects are very important. The saturation of commercial space per employee will reduce construction of commercial space. This in turn will have a very significant effect on the demand for steel and cement. Similarly, the already achieved saturation of fertilizer use per hectare of land (at 150% of current levels in Japan) combined with the lack of new arable land in China results in stagnating chemical fertilizer production. The anticipated future use of natural gas instead of coal for ammonia production will further reduce energy use because of higher efficiency of production processes.
• With a decline in exports of the products of heavy industry, energy use of this industrial sector will approach a peak in the time period 2015 to 2020 for both CIS and AIS; overall, industrial energy use will gradually decline as a proportion of total energy demand as demand from transportation and buildings grows through 2050.
• Residential primary energy demand will grow rapidly until 2025 or 2030. In CIS, demand rises between 2005 and 2030 at an average annual rate of 2.8%. After 2030, it increases by only 0.6% per year. This slowing of growth is largely due to achievement of house floor areas that are broadly satisfactory to the Chinese population – based on comparison with other countries. In addition, most households will possess all major appliances by 2030, and efficiency improvements in heat distribution will have reduced heating energy requirements.
• Urban private car ownership is expected to increase to over 356 million units by 2050 (half the per capita car ownership in the United States today in a very densely populated country), with 30% of these being electric cars under CIS. Increasing this proportion to 70% in the AIS scenario reduces gasoline demand by 82 million tonnes in 2050. This produces the result that China becomes a gasoline exporter, as demand for other oil products is not reduced commensurately.
• In all scenarios, China remains a net importer of oil and natural gas and becomes highly dependent on imports by 2050 (over 97%) in CIS. Even with substantial expansion of proven reserves, China’s import dependency would remain over 75% in 2050.
• China’s remaining extractable coal reserves appear to accommodate extraction levels up to over 4 billion tonnes per year, meeting CIS demand, but only for a relatively short period after 2050; unless China’s reserves turn out to be larger than current estimates, China will be increasingly dependent on coal imports not long after 2050. At lower levels of extraction such as under the AIS scenario, domestic reserves could last considerably longer. “These results,” the authors conclude, “emphasize the significant role that energy efficiency policies (which play a major role in the magnitude of energy demand at the plateau) and subsequent improvements will continue to play in decreasing the growth of energy demand and leading China on a lower carbon development pathway.”

Figure 1: Primary Energy Consumption for CIS and AIS Scenarios source: Lawrence Berkeley National Laboratory


Figure 2: Carbon Emissions Outlook for CIS and AIS Scenarios

*This fact sheet is based on: Zhou, Nan and David Fridley, Michael McNeil, Nina Zheng, Jing Ke, and Mark Levine. “China’s Energy and Carbon Emissions Outlook to 2050.” Lawrence Berkeley National Laboratory. April 2011

Contact an Expert:
Mark Levine
Group Leader, China Energy Group
Lawrence Berkeley National Lab
MDLevine@lbl.gov
(510) 486-5238