Sino-German Cooperation
on Biodiversity, Climate and Environment
On behalf of International Climate Initiative (IKI)

The impact of COVID-19 on emissions in China

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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CAO Yun

Advisor
Sino-German Cooperation on Climate Change (SGCCC)
yun.cao@giz.de
Ms. Cao facilitates policy exchange between German and Chinese governments and coordinates work streams on south-south-north cooperation, climate legislation and finance to support China in strengthening its climate governance system. Besides, she supports the development of new projects. She studied at Humboldt University of Berlin, Free University of Berlin and Technical University of Munich, having extensive research experiences on climate and energy policies in China and Germany. Before joining GIZ, she worked at the German Institute for Economic Research (DIW Berlin) for many years.