Two Sessions: China’s Latest Climate Directives
By Li Shuo and Taylah Bland
On March 5, Chinese Premier Li Qiang presented the 2024 Government Work Report (the GWR) to the National People's Congress (NPC), one of China’s most important political moments of the year. The GWR outlined plans for the Chinese state in the year ahead, providing the most comprehensive overview of upcoming political priorities. The GWR is expected to be reviewed by NPC delegates over the coming days and adopted at the end of the ongoing NPC session on March 11, but major changes to the GWR are not expected.
Environmental and climate topics have been placed on the back burner in light of China's economic challenges. Despite there being reference to environmental and climate topics, compared to previous years, there is a notable lack of quantitative references to both targets set for the year ahead and progress made over the past year. This underlines the difficulties in fulfilling previously made promises and the uncertainties around future action. The lack of quantifiable goals on air pollution and forestry coverage, for example, could hinder continued progress.
The only quantified environmental targets the 2024 GWR provided was the energy intensity reduction target of 2.5% and the carrying out of 10 major initiatives for peaking carbon emissions.
China has been off track when it comes to delivering the 13.5% of energy intensity reduction outlined in the 14th Five Year Plan (2021-2025). Getting back on track would require a far greater effort than the currently proposed 2.5% target.
Additionally, there has also been a lack of consistency in how the energy intensity target is reflected in recent government work reports. As demonstrated by the chart, the forward-looking target was missing in 2022, while the backward-looking review of the delivery of the 2023 target was vague in this year’s report — the government only made a passing reference of “falling short of expectations” and this was buried in the lower profile NDRC Report without specifying the actual rate of achieved reduction.
Headwind against the climate agenda is further reflected in how the dual carbon targets were addressed in the GWR. The government, citing a phrase used in 2022, called to “actively and prudently” implement these climate targets. This somewhat conflicting signal has been interpreted conservatively by Chinese bureaucrats. In an increasingly cautious bureaucratic culture, the natural instinct of local officials is to lean towards prudence. This will result in de facto de-prioritization of climate action.
On the positive side, the GWR reinforced recent pro-growth rhetoric on China’s globally competitive “new three” (xin san yang) industries - solar PV, lithium battery, and electric vehicles. These sectors have contributed notably to an otherwise sluggish economy worsened by ongoing instability in the real estate sector. As a result, a new narrative has emerged since early 2023 which highlights the increasing positive alignment between China’s economic and environmental interests. As confirmed by Premier Li Qiang’s Work Report and President Xi Jinping’s recent comment on “new productive forces”, this narrative is gaining further buy-in from Chinese political elites, a dynamic that could propel the country’s climate actions despite its economic difficulties.
Lastly, when it comes to the energy sector, the phrase “energy revolution”, an arguably stronger reference than “energy transition” made its way back to the GWR. But at the same time, the boldness was conditioned by the reference of coal and coal plants serving the “critical role” in ensuring energy supply. The GWR also called for the broadening of sectoral coverage of China’s emission trading system, which could represent long-awaited progress, although no clear timeline was specified.
Overall, the 2024 GWR captured the zeitgeist of China’s climate momentum. As documented in an earlier briefing, domestic challenges and contentious geopolitics will continue to inject downward pressure on China’s climate action. New drivers for ambition are emerging, such as the growth of low carbon industries and China’s vulnerability to climate impacts, are emerging, but these trends have to combat significant resistance from China’s coal and heavy industries.