Emerging data suggest that Chinese coal consumption may have fallen in 2014, for the first time since 1998, as the country invested in renewable energy, GDP growth slowed, and air quality topped the political agenda.
Coal is the main source of China’s carbon emissions, followed by the cement sector. If the country’s coal use fell, then carbon emissions probably also fell, in the energy sector at least, since the two are so closely correlated.
That would be great news in the fight against climate change, given that China is the world’s biggest emitter, and its emissions have recently been growing by more than 5% per year.
But it would also be a Herculean feat. For China’s emissions to stand still, never mind fall, the carbon intensity of the economy (carbon emissions per unit of GDP growth) would have to fall by the same amount as the economy grew in 2014, i.e. by 7.4 percent.
The alternative is that something has gone wrong somewhere with the country’s coal consumption or GDP data.
I decided to investigate. I calculated historical changes in carbon intensity, using annual carbon emissions data from the energy company BP, and annual GDP from the World Bank. The World Bank GDP data were in constant international dollars, to control for exchange rates and inflation.
The findings were quite surprising.
In fact, China has achieved this before, according to these data, in 1998, when carbon intensity fell by 9.2%. It also fell by 8.8% in 1992, 7.4% in 1997 and 7.3% in 2007.
In an interesting parallel, 1998 was the last time that China embarked on a major effort to combat the environmental costs of rampant growth in coal output, including water and air pollution. Today, the main concern is air quality in the country’s cities from burning coal, and a big target has been less efficient coal-fired power plants; in 1998, it was the closure of inefficient coal mines.
Analysts reported the following in 2002, publishing in the journal Resources Policy. “Recognising the serious environmental impacts, the Chinese government enacted a guiding policy of ‘support, transform, rectify, unify and improve’ the small coal mines (SCMs) in 1994. Further rectification of the SCMs was carried out in 1997. By the closure policy in 1998, 14,700 illegal wells had been closed.”
Given this precedent, it seems possible that China’s carbon emissions did fall last year, in the country’s latest environmental crackdown.
If so, one question is whether this time we are seeing a long-term, structural decline, which it certainly was not in 1998. Massive investment in low-carbon renewable energy, plus a maturing economy away from heavy industry towards the service sectors suggests that we are indeed seeing such a structural shift.
Another question is over the quality of the data, and a word of caution.
Research by the Oslo-based Centre for International Climate and Environmental Research (CICERO) shows that BP has repeatedly revised its 1998 data for Chinese coal consumption (see chart below). Originally, there was a much bigger dip, perhaps because of initial mis-reporting by provinces anxious to show that they were meeting targets to shut coal mines. Over time, BP has revised upwards actual coal consumption in 1998, as more accurate data emerged.
Perhaps we should wait, therefore, before believing that China’s coal consumption fell last year, under the government’s efforts to improve air quality. As CICERO’s Glen Peters suggested to me earlier today, statistics like wine are best consumed when mature.
Estimates that China’s coal consumption fell in 2014 are based on preliminary calculations, using data which suggest that domestic production fell, along with imports, while stocks rose. Official coal consumption figures have not yet been published. The China National Coal Association last month estimated that coal output fell and stocks rose, while, Chinese customs data show that imports fell.