A new report from Grantham Research Institute, part of the London School of Economics, has found that China may reach peak greenhouse gas emissions by 2025 – or even earlier - rather than the upper limit of 2030 committed to by President Xi Jinping in November 2014. This greatly increases global chances of keeping warming within the agreed 2°C limit.

The report states that China has entered a ‘new normal’, wherein it is focused on better quality growth, including explicit policies on efficiency, air pollution and clean energy. Analysing trends in the key emitting sectors, the report suggests that post-peak, emissions could fall rapidly, based on a comprehensive approach to reform. The ‘new normal’ approach still allows for significant economic growth – put at 7% pa over the next five years – but shifts the balance of growth away from heavy industrial investment and towards domestic consumption, particularly of services. It also includes focus on innovation, reducing inequalities and minimising environmental damage.

Coal consumption fell in 2014 and fell further in 1Q15. The report concludes that China’s coal use has reached a structural maximum and is likely to plateau over the next five years, in part due to the contraction in the overcapacity steel and cement industries. Though coal use could increase over this time, the report believes it more likely that it will continue to decline, while use of natural gas will increase rapidly.

The report states: ‘Were China’s emissions indeed to peak around 2020–2025, it would be reasonable to expect a peak emissions level for China of around 12.5 – 14 billion tonnes of carbon dioxide equivalent. This could hold open the possibility that global GHG emissions could be brought onto a pathway consistent with the international goal of limiting global warming to no more than 2°C. Whether the world can get onto that pathway in the decade or more after 2020 depends in significant part on China’s ability to reduce its emissions at a rapid rate, post-peak (as opposed to emissions plateauing for a long time), on the actions of other countries in the next two decades, and on global actions over the subsequent decades.’

Adapted from GRI report by Katherine Guenioui