CECP - Exploring regional impacts of climate policy in China

Energy mix

Coal use falls substantially in all policy scenarios, delivering the bulk of reductions in CO₂ emissions. Much of these reductions occur in the electric power and industrial sectors. The transportation sector, which relies on refined oil, also contributes to CO₂ reductions, but to a lesser extent because fewer cost-effective clean energy substitutes are available and refined oil is less carbon intensive than coal on an energy basis. The 4% and 5% Policy scenarios meet or exceed China’s non-fossil energy target. Main sources contributing the rising non-fossil energy share are in the power generation sector: wind, solar, biomass, hydro, and nuclear.

3% / year scenario

Primary energy by source, Mtce

4% / year scenario

Primary energy by source, Mtce

5% / year scenario

Primary energy by source, Mtce

Target comparison

Share of non-fossil sources in primary energy, % *
Non-fossil energy increases in all scenarios

China’s non-fossil energy target is met in the 4% and 5% Policy scenarios. Both a feed-in tariff for renewable energy plus the CO₂ price make low carbon energy deployment a relatively stable feature of all scenarios, while the coal demand is highly sensitive to the level of policy stringency. Natural gas and oil demand are far less sensitive, given their lower CO₂ content and lack of substitutes in some uses. However, this study focused on the least-cost path to reach CO₂ intensity reduction goals, and did not model the full range of policies and initiatives in place to increase the contribution of non-fossil energy in China.