The impact of COVID-19 on emissions in China

climate
Jun 10, 2020

Every year, the Chinese New Year holiday has a significant short-term impact on energy demand, industrial output and emissions in China, as most shops and industries wind down and the country comes to a temporary standstill. This year, however, this standstill was prolonged by the outbreak of COVID-19, with a virtually unprecedented impact on economic activity – and corresponding emissions.

According to calculations by the Centre for Research on Energy and Clean Air, China’s CO2 emissions fell by as much as 25%, the equivalent of 200 Mt of CO2, in the four weeks after Chinese New Year. Extended over a seven-week period after Chinese New Year, emissions remained at 18% below normal levels as demand slowly resumed.

By the fourth week of March, coal consumption at power plants and oil-refinery utilisation had returned to normal, as had nitrogen dioxide pollution levels. Taken together, these indicators reflect a rebound in emissions close to pre-crisis levels in urban areas as well as industrial centres: apparently, the drop in CO2 emissions was as dramatic as it was short-lived. Thus, to gauge the long-term impact of COVID-19 on emissions in China, what matters is not what happens during the crisis as much as what happens afterwards.

With China’s National Bureau of Statistics having reported a 6.8% year-on-year GDP contraction during the first quarter of 2020, a comprehensive stimulus package to kick off economic recovery is highly anticipated. China’s last substantial economic stimulus, a 4tn RMB programme administered in response to the global financial crisis of 2008, was heavily focused on large-scale infrastructure projects. The subsequent years saw a notable increase in emissions primarily linked to construction.

There is some indication that the Chinese government is looking to move away from conventional infrastructure investments in its next stimulus. Both at the first meeting of the Standing Committee of the State Council and the conference of the Politburo Standing Committee in 2020, officials invoked investments in ‘new infrastructure’ as a strategy for economic recovery. New infrastructure comprises investments in seven sectors, namely 5G base stations, ultra-high voltage power transmission, high-speed railways, charging stations for electric vehicles, big data centres, artificial intelligence (AI) and industrial internet.

The relationship between these sectors and overall emissions is complex: while high-speed railways and electric vehicle charging stations constitute a fairly straightforward green stimulus, the digital sectors may often lead to increasing energy consumption and, depending on the power source, increasing emissions. In the absence of precise policy proposals, it remains to be seen to what extent this year’s stimulus programme will be aligned with China’s broader goals for sustainable development.

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Sino-German Climate Partnership III

Project country
China
Political Partners
German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety (BMU); Ministry of Ecology and Environment of the People's Republic of China (MEE); National Energy Administration of the People's Republic of China (NEA)
Implementation Partners
Energy Research Institute of the National Development and Reform Commission of the People's Republic of China
Duration
09/2017 – 09/2020

Germany and China signed the Memorandum of Understanding on Cooperation in Combatting Climate Change and initiated this bilateral dialogue as "Sino-German Climate Partnership". The project has been established to support the cooperation between the German Ministry of Environment, Nature Conservation and Nuclear Safety (BMU) and the Chinese Ministry of Ecology and Environment (MEE). The new phase of the project starts in 2018 with close alignment to the restructuring at the Chinese government. In this phase, the project aims to advance the policy dialogue and cooperation with the Chinese partners domestically as well as within the international context of climate change. Part of the work will be supporting the development and implementation of China's medium- and long-term low-carbon development strategies, hence by supporting the Chinese government in strengthening the climate governance system. Domestically the SGCP project supports the policy dialogue on climate change (Sino-German Working Group on Climate Change) and enhances the exchange of German experiences and best practices, this includes strengthening capacities for the development of integrated climate and energy action plans as well as adaptation concepts for cities. On international level the SGCP project enhances the knowledge of both patterns about best practices in regard of climate policies and their implementation. For new cooperation topics identified by the Working Group on Climate Change, the project acts as an incubator for IKI development. As interface for information management, it serves a as a hub for exchange between partners of the IKI within and outside China, especially within the UNFCCC process.